The accompanying notes are an integral part
of these unaudited condensed financial statements.
The accompanying notes are an integral part
of these unaudited condensed financial statements.
The accompanying notes are an integral part
of these unaudited condensed financial statement
Notes to Unaudited Condensed Financial
Statements
May 31, 2017
Note 1 - Organization, Plan of Business Operations
Origo Acquisition
Corporation, formerly known as CB Pharma Acquisition Corp. (the “Company”), was incorporated in the Cayman Islands
on August 26, 2014 as a blank check company whose objective is to acquire, through a merger, share exchange, asset acquisition,
share purchase, recapitalization, reorganization or other similar business combination, one or more businesses or entities (a “Business
Combination”). The Company’s effort to identify a prospective target business is not limited to a particular industry
or geographic region of the world.
All activity through
May 31, 2017 relates to the Company’s formation, the initial public offering (“Initial Public Offering”) and
a search for a Business Combination candidate. The Company is an early stage and emerging growth company and, as such, the Company
is subject to all of the risks associated with early stage and emerging growth companies.
The registration statement
for the Company’s Initial Public Offering was declared effective on December 12, 2014. The Company consummated the Initial
Public Offering of 4,000,000 units (“Units”) at $10.00 per Unit on December 17, 2014, generating gross proceeds of
$40 million (Note 3). On December 24, 2014, the Company consummated the closing of the sale of 200,000 additional Units upon receiving
notice of EarlyBirdCapital, Inc.’s (“EBC”), the representative of the underwriters in the Initial Public Offering
election to exercise its over-allotment option, generating an additional gross proceeds of $2 million (“Over-allotment”).
Simultaneously with
the closing of the Initial Public Offering and the Over-allotment, the Company consummated the private placement (“Private
Placement”) selling 286,000 units (“Private Placement Units”) at a price of $10.00 per Unit, to Fortress Biotech,
Inc. (“Fortress”), formerly known as Coronado Biosciences, Inc., an affiliate of the Company’s former executive
officers and the holder of a majority of the Company’s Ordinary Shares prior to the Initial Public Offering, and EBC, generating
an aggregate of $2.86 million in gross proceeds (Note 4).
An aggregate
amount of approximately $42.85 million (approximately $10.20 per Unit) from the net proceeds of the sale of the Units in the
Initial Public Offering, the Over-Allotment, and the Private Placement Units, net of fees of approximately $1.84 million
associated with the Initial Public Offering, inclusive of approximately $1.37 million of underwriting fees, was placed in a
trust account (“Trust Account”) immediately after the sales and invested in U.S. government treasury bills. In
connection with the Initial Extension, Second Extension and Third Extension as discussed below, an aggregate of approximately
$10.76 million, $380,600 and $11.8 million was removed from the Trust Account in June 2016, December 2016 and March 2017,
respectively, to fund conversions of ordinary shares. In addition, the Company’s management deposited an aggregate of
approximately $460,000 in the Trust Account to increase the conversion amount per share in any subsequent Business Combination or
liquidation out of loans from the new management and EBC during the six months ended May 31, 2017. Subsequent to May 31, 2017, the Company
deposited an addition of approximately $100,000 to the Trust Account.
The Company’s
management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and
the Private Placement, although substantially all of the net proceeds are intended to be applied to consummating a Business Combination.
On June 10, 2016,
the Company held an extraordinary general meeting of shareholders (the “June Meeting”). At the June Meeting, the shareholders
approved each of the following items: (i) an amendment to the Company’s Amended and Restated Memorandum and Articles of Association
(the “Charter”) to extend the date by which the Company has to consummate a business combination (“Liquidation
Date”) from June 12, 2016 to December 12, 2016 (the “Initial Extension”), (ii) an amendment to the Charter to
allow the holders of the Company’s ordinary shares issued in the Company’s Initial Public Offering to elect to convert
their Public Shares (as defined below) into their pro rata portion of the funds held in the Trust Account, and (iii) to change
the Company’s name from “CB Pharma Acquisition Corp.” to “Origo Acquisition Corporation”.
Origo Acquisition Corporation
Notes to Unaudited Condensed Financial
Statements
May 31, 2017
In connection with
the Initial Extension, effective as of June 10, 2016, (i) each of Lindsay A. Rosenwald, Michael Weiss, George Avgerinos, Adam J.
Chill, Arthur A. Kornbluth and Neil Herskowitz resigned from his position as an officer and/or director of the Company and (ii)
Edward J. Fred and Jose M. Aldeanueva were appointed as Chief Executive Officer and President and Chief Financial Officer, Secretary
and Treasurer, respectively, of the Company and Edward J. Fred, Jose M. Aldeanueva, Stephen Pudles, Jeffrey J. Gutovich and Barry
Rodgers became directors of the Company. On May 20, 2016, the Initial Shares (as defined below) were transferred to the new management
in connection with the resignation of the then-officers and directors of the Company upon the consummation of the Initial Extension.
At the June Meeting,
shareholders holding 1,054,401 Public Shares exercised their right to convert such Public Shares into a pro rata portion of the
funds in the Trust Account. As a result, an aggregate of approximately $10.76 million (or approximately $10.20 per share) was removed
from the Trust Account to pay such holders. In connection with the Initial Extension, the new management of the Company provided
a loan to the Company of $0.20 for each Public Share that was not converted, for an aggregate amount of approximately $629,000,
which was deposited in the Trust Account.
On December 12, 2016,
the Company held its annual general meeting of shareholders (the “December Meeting”). At the December Meeting, the
shareholders approved for an amendment to extend the Liquidation Date from December 12, 2016 to March 12, 2017 (the “Second
Extension”). At the meeting, shareholders holding 36,594 Public Shares exercised their right to convert such shares into
a pro rata portion of the funds in the Trust Account. As a result, an aggregate of approximately $380,600 (or approximately $10.40
per share) was removed from the Trust Account in December 2016 to pay such shareholders. In connection with the Second Extension,
the Company’s management provided a loan to the Company for an aggregate amount of $320,000, of which an aggregate of approximately
$311,000, or $0.10 for each Public Share that was not converted, was deposited in the Trust Account to increase the conversion
amount per share in any subsequent Business Combination or liquidation to approximately $10.50 per share.
On March 10, 2017, the Company held another
extraordinary general meeting of shareholders (the “March Meeting”) and requested shareholders’ approval to extend
the Liquidation Date from March 12, 2017 to September 12, 2017 (the “Third Extension”). Under Cayman Islands law, the
amendments to the Charter took effect upon their approval. Accordingly, the Company has until September 12, 2017 to consummate
an initial Business Combination. At the March Meeting, shareholders holding 1,123,568 Public Shares exercised their right to convert
such shares into a pro rata portion of the funds in the Trust Account. As a result, an aggregate of approximately $11.8 million
(or approximately $10.50 per share) was removed from the Trust Account in March 2017 to pay such shareholders. In connection with
the Third Extension, the Company’s management agreed to provide a loan to the Company for $0.025 for each Public Share that
was not converted, or approximately $50,000, for each calendar month (commencing on March 12, 2017 and on the 12th day of each
subsequent month), or portion thereof, to be deposited in the Company’s Trust Account. If the Company takes the full time
through September 12, 2017 to complete the initial business combination, the conversion amount per share at the meeting for such
business combination or the Company’s subsequent liquidation will be approximately $10.65 per share. The loan will not bear
interest and will be repayable by the Company to the lenders upon consummation of an initial Business Combination. During the three
months ended May 31, 2017, the Company issued promissory notes to the new management and EBC for an aggregate of $130,000 and $75,000,
respectively, and deposited approximately $149,000 to the Trust Account. The loans are unsecured and non-interest bearing and are
due upon consummation of a Business Combination.
The Company’s
current Chief Executive Officer has agreed that he will be personally liable under certain circumstances to ensure that the proceeds
in the Trust Account are not reduced by the claims of target businesses or vendors or other entities that are owed money by the
Company for service rendered, contracted for or products sold to the Company. However, such officer may not be able to satisfy
those obligations should they arise. The remaining net proceeds (not held in the Trust Account) may be used to pay for business,
legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses. In addition,
interest income earned on the funds in the Trust Account may be released to the Company to pay its income or other tax obligations,
and working capital requirements. With these exceptions, expenses incurred by the Company may be paid prior to a Business Combination
only from the net proceeds of the Initial Public Offering not held in the Trust Account; provided, however, that in order to meet
its working capital needs following the consummation of the Initial Public Offering, the Company’s shareholders prior to
the Initial Public Offering, including their subsequent transferees (collectively the “Initial Shareholders”), officers
and directors or their affiliates (including Fortress) may, but are not obligated to, loan the Company funds, from time to time
or at any time, in whatever amount they deem reasonable in their sole discretion. Each loan would be evidenced by a promissory
note. The notes would either be paid upon consummation of the Company’s initial Business Combination, without interest, unless
otherwise provided, or, at the lender’s discretion, converted upon consummation of the Company’s Business Combination
into additional Private Placement Units at a price of $10.00 per Unit. If the Company does not complete a Business Combination,
the loans would not be repaid.
Origo Acquisition Corporation
Notes to Unaudited Condensed Financial
Statements
May 31, 2017
The Company will either
seek shareholder approval of any Business Combination at a meeting called for such purpose at which holders of the outstanding
Ordinary Shares sold in the Initial Public Offering (“Public Shareholders”) may seek to convert such shares (“Public
Shares”) into their pro rata share of the aggregate amount then on deposit in the Trust Account, less any taxes then due
but not yet paid, or provide Public Shareholders with the opportunity to sell their Public Shares to the Company by means of a
tender offer for an amount equal to their pro rata share of the aggregate amount then on deposit in the Trust Account, less any
taxes then due but not yet paid. The Company will proceed with a Business Combination only if it will have net tangible assets
of at least $5,000,001 upon consummation of the Business Combination and, solely if shareholder approval is sought, a majority
of the outstanding Ordinary Shares of the Company voted, are voted in favor of the Business Combination. Notwithstanding the foregoing,
a Public Shareholder, together with any affiliate of his or any other person with whom he 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 30% or
more of the Ordinary Shares sold in the Initial Public Offering. Accordingly, all shares purchased by a holder in excess of 30%
of the shares sold in the Initial Public Offering will not be converted to cash. In connection with any shareholder vote required
to approve any Business Combination, the Initial Shareholders have agreed (i) to vote any of their respective shares, including
the 1,050,000 Ordinary Shares issued in connection with the organization of the Company (the “Initial Shares”), in
favor of the initial Business Combination and (ii) not to convert such respective shares into a pro rata portion of the Trust Account
or seek to sell their shares in connection with any tender offer the Company engages in.
If the Company has
not completed a Business Combination by September 12, 2017, pursuant to the amended Charter, it will trigger the automatic liquidation
of the Trust Account and the voluntary liquidation of the Company. If the Company is required to liquidate, Public Shareholders
are entitled to share ratably in the Trust Account, including any interest, and any net assets remaining available for distribution
to them after payment of liabilities. The Initial Shareholders have agreed to waive their rights to share in any distribution with
respect to their Initial Shares.
On December 19, 2016,
the Company entered into a merger agreement (“Merger Agreement”) with Aina Le’a Inc. (“Aina Le’a”),
a residential and commercial real estate developer of distinctive master-planned communities in Hawaii. On February 17, 2017, the
Company sent a letter (the “Termination Letter”), as supplemented on February 22, 2017, to Aina Le’a to terminate
the Merger Agreement.
Going Concern
The accompanying financial
statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the
realization of assets and satisfaction of liabilities in the normal course of business. As of May 31, 2017, the Company had approximately
$4,800 in cash and cash equivalents, approximately $21,000 in interest income available to the Company for working capital purposes
from the Company's investments in the Trust account, and a working capital deficit of approximately $2.2 million. Further, the
Company has incurred and expects to continue to incur significant costs in pursuit of its acquisition plans. Based on the foregoing,
the Company may have insufficient funds available to operate its business through the earlier of consummation of a Business Combination
or September 12, 2017. Following the initial Business Combination, if cash on hand is insufficient, the Company may need to obtain
additional financing in order to meet its obligations. The Company cannot be certain that additional funding will be available
on acceptable terms, or at all. The Company’s plans to raise capital or to consummate the initial Business Combination may
not be successful. These matters, among others, raise substantial doubt about the Company’s ability to continue as
a going concern.
The accompanying financial
statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Origo Acquisition Corporation
Notes to Unaudited Condensed Financial
Statements
May 31, 2017
Note 2 - Significant Accounting Policies
Basis of Presentation
The accompanying unaudited
condensed financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S.
GAAP”) for interim financial information and pursuant to rules and regulations of the Securities and Exchange Commission.
Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.
In the opinion of management, all adjustments (consisting of normal accruals) considered for a fair presentation have been included.
Operating results for the three and six months ended May 31, 2017 are not necessarily indicative of the results that may be expected
for the year ending November 30, 2017. For further information refer to the financial statements and footnotes thereto included
in the Company’s Annual Report on Form 10-K for the year ended November 30, 2016, filed with Securities and Exchange Commission
on January 18, 2017.
Emerging Growth Company
Section 102(b) (1)
of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards
until private companies (that is, those that have not had a Securities Act of 1933, as amended (“Securities Act”) registration
statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with
the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition
period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable.
The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised
and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the
new or revised standard at the time private companies adopt the new or revised standard.
Cash and Cash Equivalents
The Company considers
all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
Cash and Marketable Securities Held in Trust Account
The amounts held in
the Trust Account represent substantially all of the proceeds of the Initial Public Offering, net of amounts removed from the Trust
Account for conversions (see Note 1) and are classified as restricted assets since such amounts can only be used by the Company
in connection with the consummation of a Business Combination. As of May 31, 2017, cash and marketable securities, which are classified
as trading securities, held in the Trust Account consisted of approximately $21 million in U.S. Treasury Bills. At May 31, 2017,
there was approximately $21,000 of interest income held in the Trust Account available to be released to the Company.
Ordinary Shares Subject to Possible
Conversion
The Company accounts for
its Ordinary Shares subject to possible conversion in accordance with the guidance in Accounting Standards Codification (“ASC”)
Topic 480 “Distinguishing Liabilities from Equity.” Ordinary Shares subject to mandatory conversion (if any) are classified
as a liability instrument and are measured at fair value. Conditionally redeemable Ordinary Shares (including Ordinary Shares that
features conversion rights that are either within the control of the holder or subject to conversion upon the occurrence of uncertain
events not solely within the Company’s control) are classified as temporary equity. At all other times, Ordinary Shares are
classified as shareholders’ equity. The Company’s Ordinary Shares features certain conversion rights that are considered
to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, Ordinary Shares
subject to possible conversion at conversion value are presented as temporary equity, outside of the shareholders’ equity
section of the Company’s balance sheet.
Origo Acquisition Corporation
Notes to Unaudited Condensed Financial
Statements
May 31, 2017
Concentration of Credit Risk
Financial instruments
that potentially subject the Company to concentration of credit risk consist of cash accounts in a financial institution which,
at times may exceed the Federal depository insurance coverage of $250,000. At May 31, 2017, the Company had not experienced losses
on these accounts and management believes the Company is not exposed to significant risks on such accounts.
Fair Value of Financial Instruments
The fair value of
the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurements
and Disclosures,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their
short-term nature.
Net Loss per Share
Loss per share is
computed by dividing net loss by the weighted-average number of Ordinary Shares outstanding during the period. An aggregate of
1,301,659 and 3,677,350 Ordinary Shares subject to possible conversion at May 31, 2017 and 2016, respectively, have been excluded
from the calculation of basic loss per Ordinary Share since such Ordinary Shares, if redeemed, only participate in their pro rata
share of the earnings in the Trust Account. The Company has not considered the effect of (i) warrants sold in the Public Offering
and Private Placement to purchase 2,243,000 Ordinary Shares of the Company, (ii) rights to acquire 448,600 Ordinary Shares of the
Company and (iii) 400,000 Ordinary Shares, warrants to purchase 200,000 Ordinary Shares and rights to acquire 40,000 Ordinary Shares
included in the unit purchase option sold to the underwriter, in the calculation of diluted loss per share, since the exercise
of the unit purchase option and warrants as well as the conversion of rights is contingent on the occurrence of future events.
Use of Estimates
The preparation of
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 expenses during the reporting period. Actual results could differ from those estimates.
Recent Accounting Pronouncements
Management does not
believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material
effect on the accompanying financial statements.
Origo Acquisition Corporation
Notes to Unaudited Condensed Financial
Statements
May 31, 2017
Note 3 - Initial Public Offering
In December 2014,
the Company consummated the Initial Public Offering and the Over-allotment of 4,200,000 Units. Each Unit consists of one ordinary
share, $.0001 par value per share (“Ordinary Share”), one right (“Right”) to receive one-tenth of one Ordinary
Share upon consummation of the Company’s initial Business Combination and one warrant entitling the holder to purchase one-half
of one Ordinary Share (“Warrant”). The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds
of $42,000,000. Each Warrant entitles the holder to purchase one-half of one Ordinary Share at a price of $11.50 per full Ordinary
Share commencing upon the Company’s completion of its initial Business Combination, and expiring five years from the completion
of the Company’s initial Business Combination. The Company will not issue fractional shares. As a result, investors must
exercise Warrants in multiples of two Warrants in whole and not in part, at a price of $11.50 per full share, subject to adjustment,
to validly exercise the Warrants. The Company may redeem the Warrants at a price of $0.01 per Warrant upon 30 days’ notice,
only in the event that the last sale price of the Ordinary Shares is at least $24.00 per share for any 20 trading days within a
30-trading day period (“30-Day Trading Period”) ending on the third day prior to the date on which notice of redemption
is given, provided there is a current registration statement in effect with respect to the Ordinary Shares underlying such Warrants
commencing five business days prior to the 30-Day Trading Period and continuing each day thereafter until the date of redemption.
If the Company redeems the Warrants as described above, management will have the option to require all holders that wish to exercise
Warrants to do so on a “cashless basis.” In accordance with the warrant agreement relating to the Warrants issued in
the Initial Public Offering the Company is only required to use its best efforts to maintain the effectiveness of the registration
statement covering the Warrants. If a registration statement is not effective within 90 days following the consummation of a Business
Combination, Warrant holders may, until such time as there is an effective registration statement and during any period when the
Company shall have failed to maintain an effective registration statement, exercise Warrants on a cashless basis pursuant to an
available exemption from registration under the Securities Act of 1933, as amended. In the event that a registration statement
is not effective at the time of exercise or no exemption is available for a cashless exercise, the holder of such Warrant shall
not be entitled to exercise such Warrant for cash and in no event (whether in the case of a registration statement being effective
or otherwise) will the Company be required to net cash settle the Warrant exercise. Additionally, in no event will the Company
be required to net cash settle the Rights. If an initial Business Combination is not consummated, the Rights and Warrants will
expire and will be worthless.
Note 4 - Private Placement
Simultaneously with
the consummation of the Initial Public Offering and the Over-allotment, the Company consummated the Private Placement of 286,000
Private Placement Units at a price of $10.00 per Private Placement Unit, generating total proceeds of $2.86 million. Of the Private
Placement Units, 265,000 were purchased by an Initial Shareholder that was an affiliate of the Company’s former executive
officers and 21,000 were purchased by EBC, the representative of the underwriters of the Initial Public Offering. The Private Placement
Units are identical to the Units sold in the Initial Public Offering, except the warrants included in the Private Placement Units
will be non-redeemable, may be exercised on a cashless basis and may be exercisable for unregistered Ordinary Shares if the prospectus
relating to the Ordinary Shares issuable upon exercise of the Warrants is not current and effective, in each case so long as they
continue to be held by the initial purchasers or their permitted transferees. The holders of the Private Placement Units have agreed
(A) to vote the Ordinary Shares included in the Private Placement Units (“Private Shares”) in favor of any initial
Business Combination, (B) not to propose, or vote in favor of, an amendment to the Company’s amended and restated memorandum
and articles of association with respect to the Company’s pre-Business Combination activities prior to the consummation of
such a Business Combination unless the Company provides dissenting Public Shareholders with the opportunity to convert their Public
Shares into the right to receive cash from the Company’s Trust Account in connection with any such vote, (C) not to convert
any Private Shares into the right to receive cash from the Trust Account in connection with a shareholder vote to approve the Company’s
initial Business Combination or a vote to amend the provisions of the Company’s amended and restated memorandum and articles
of association relating to shareholders’ rights or pre-Business Combination activity and (D) that such Private Shares shall
not participate in any liquidating distribution upon winding up if a Business Combination is not consummated within the required
time period. Additionally, the purchasers have agreed not to transfer, assign or sell any of the Private Placement Units (except
to certain permitted transferees) until the completion of the Company’s initial Business Combination. The holders have agreed
not to sell their shares to the Company in any tender offer in connection with the initial Business Combination.
Note 5 - Related Party Transactions
Initial Shares
In August 2014, the
Company issued 1,150,000 Initial Shares to the Initial Shareholders for an aggregate purchase price of $25,000. The Initial Shares
included an aggregate of up to 150,000 shares subject to compulsory repurchase for an aggregate purchase price of $0.01 to the
extent that the underwriters’ over-allotment option was not exercised in full or in part, so that the Initial Shareholders
would collectively own 20.0% of issued and outstanding shares after the Initial Public Offering (excluding the sale of the Private
Placement Units). On December 18, 2014, EBC notified the Company that it had elected to exercise a portion of the over-allotment
option for 200,000 additional units at $10.00 per unit for an additional $2,000,000, The partial exercise resulted in a reduction
of 50,000 Ordinary Shares subject to compulsory repurchase resulting in a total of 100,000 Ordinary Shares being repurchased for
an aggregate amount of $0.01 on January 5, 2015. On May 20, 2016, the Initial Shares were transferred to the new management in
connection with the resignation of the then-officers and directors of the Company upon the consummation of the Initial Extension.
Origo Acquisition Corporation
Notes to Unaudited Condensed Financial
Statements
May 31, 2017
The Initial Shares are identical to the Ordinary Shares included
in the Units sold in the Initial Public Offering. However, the holders of the Initial Shares have agreed (A) to vote their Initial
Shares (as well as any shares acquired after the Initial Public Offering) in favor of any proposed Business Combination, (B) not
to propose, or vote in favor of, an amendment to the amended and restated memorandum and articles of association with respect to
pre-Business Combination activities prior to the consummation of such a Business Combination unless the Company provides dissenting
Public Shareholders with the opportunity to convert their Public Shares into the right to receive cash from the Trust Account in
connection with any such vote, (C) not to convert any Initial Shares (as well as any other shares acquired after the Initial Public
Offering) into the right to receive cash from the Trust Account in connection with a shareholder vote to approve a proposed initial
Business Combination (or sell any shares they hold to the Company in a tender offer in connection with a proposed initial Business
Combination) or a vote to amend the provisions of the amended and restated memorandum and articles of association relating to shareholders’
rights or pre-Business Combination activity and (D) that the Initial Shares shall not participate in any liquidating distribution
upon winding up if a Business Combination is not consummated. Additionally, the Initial Shareholders have agreed not to transfer,
assign or sell any of the Initial Shares (except to certain permitted transferees) until (1) with respect to 50% of the Initial
Shares, the earlier of one year after the date of the consummation of initial Business Combination and the date on which the closing
price of Ordinary Shares equals or exceeds $12.50 per share (as adjusted for share splits, share dividends, reorganizations and
recapitalizations) for any 20 trading days within any 30-trading day period commencing after initial Business Combination and (2)
with respect to the remaining 50% of the Initial Shares, one year after the date of the consummation of initial Business Combination,
or earlier, in either case, if, subsequent to initial Business Combination, the Company consummates a liquidation, merger, stock
exchange or other similar transaction which results in all of shareholders having the right to exchange their Ordinary Shares for
cash, securities or other property.
Loans from Related Party
Convertible Notes
As of May 31, 2017
and November 30, 2016, the Company had an aggregate of $325,000 in convertible promissory notes to Fortress outstanding. The loans
are unsecured and non-interest bearing and are due upon consummation of a Business Combination. The holder has agreed to convert
the principal balance of $325,000 in convertible promissory notes into 32,500 Units at a price of $10.00 per Unit upon consummation
of a Business Combination. The terms of the units into which the convertible promissory note will convert will be identical to
the Private Placement Units.
As of November 30,
2016, the Company had an aggregate of $967,665 in convertible promissory notes to the new management outstanding. In December 2016
and January 2017, the new management loaned the Company an addition of $320,000 and $125,000, respectively, and amended the note
in December and January 2017, pursuant to which: (i) the principal balance of the note was increased to $1,412,665, and (ii) the
note will accrue interest, retroactively from its date of issuance in June 2016, at a rate of 13% per annum up to a maximum of
$87,335 in interest, which interest will be payable on the due date for payment of the principal of the Note. As of May 31, 2017,
the amount of accrued interest that was owed under the Note was $87,335.
The note was unsecured
and payable at the consummation of a Business Combination. Upon consummation of a Business Combination, up to $175,000 of the principal
balance of such note may be converted, at the holders’ option, into Units at a price of $10.00 per Unit. The terms of the
units into which the convertible promissory note will convert will be identical to the Private Placement Units. If new management
converts the entire $175,000 of the principal balance of the note, they would receive 17,500 Units.
Origo Acquisition Corporation
Notes to Unaudited Condensed Financial
Statements
May 31, 2017
Notes Payable
In April and
May 2017, the new management and EBC loaned the Company an aggregate of $130,000 and $75,000, respectively. The loans are
unsecured and non-interest bearing and are due upon consummation of a Business Combination.
If a Business Combination
is not consummated, the convertible notes and notes payable owed to Fortress, the new management and EBC will not be repaid by
the Company and all amounts owed thereunder by the Company will be forgiven, except to the extent that the Company had funds available
to it outside of the Trust Account.
Administrative Service Fee
Commencing on December
12, 2014, the Company had agreed to pay an Initial Shareholder a monthly fee of $10,000 for general and administrative services.
As of May 19, 2016, amount due to such Initial Shareholder was approximately $183,000; of which approximately $175,000 represents
the accrued service fee and $7,715 represents invoices of the Company paid by such Initial Shareholder. On May 20, 2016, this arrangement
was terminated, and such Initial Shareholder agreed to convert all amounts owed under such arrangement, or $175,000, to capital.
Note 6 - Commitments and Contingencies
Underwriting Agreement
On December 12, 2014,
the Company entered into an agreement with EBC (“Underwriting Agreement”). The Underwriting Agreement required the
Company to pay an underwriting discount of 3.25% of the gross proceeds of the Initial Public Offering as an underwriting discount.
The Company has further engaged EBC to assist the Company with its initial Business Combination. Pursuant to this arrangement,
the Company anticipates that the underwriter will assist the Company in holding meetings with shareholders to discuss the potential
Business Combination and the target business’ attributes, introduce the Company to potential investors that are interested
in purchasing the Company’s securities, assist the Company in obtaining shareholder approval for the Business Combination
and assist the Company with its press releases and public filings in connection with the Business Combination. The Company agreed
to pay EBC a cash fee of 4% of the gross proceeds of the Initial Public Offering (or $1.68 million) for such services upon the
consummation of its initial Business Combination (exclusive of any applicable finders’ fees which might become payable).
The Company is not obligated to pay the 4% fee if no business combination is consummated. The 4% fee is an unrecognized contingent
liability, as closing of a potential business combination was not considered probable as of May 31, 2017.
Other agreements
In August 2016, the
Company entered into an agreement with a legal firm to assist the Company with a potential business combination and related securities
and corporate work. The agreement called for a retainer of $37,500 and the Company has agreed to pay a portion of the invoices
and the remaining amount will be deferred until the consummation of the Business Combination.
In December 2016,
the Company entered into an agreement with a consultant for investor relations services. The agreement called for an initial payment
of $13,000, and a deferred monthly fee of $8,000 until the consummation of the Business Combination. The Company agreed to pay
the consultant all of the deferred fees plus a contingency fee of $20,000 upon consummation of the Business Combination.
Origo Acquisition Corporation
Notes to Unaudited Condensed Financial
Statements
May 31, 2017
As of May 31, 2017,
the aggregate amount deferred for the legal firm and the consultant was approximately $645,000. The deferred amount is an unrecognized
contingent liability, as closing of a potential business combination was not considered probable as of May 31, 2017.
Purchase Option
In December 2014,
the Company sold to EBC, for $100, a unit purchase option to purchase up to a total of 400,000 units exercisable at $11.00 per
unit (or an aggregate exercise price of $4,400,000) commencing on the consummation of a Business Combination. The unit purchase
option expires on December 12, 2019. The units issuable upon exercise of this option are identical to the Units being offered in
the Initial Public Offering. Accordingly, after the Business Combination, the purchase option will be to purchase 440,000 Ordinary
Shares (which include 40,000 Ordinary Shares to be issued for the rights included in the units) and 400,000 Warrants to purchase
200,000 Ordinary Shares. The Company has agreed to grant to the holders of the unit purchase option, demand and “piggy back”
registration rights for periods of five and seven years, respectively, from the effective date of the Initial Public Offering,
including securities directly and indirectly issuable upon exercise of the unit purchase option.
The Company accounted
for the fair value of the unit purchase option, inclusive of the receipt of a $100 cash payment, as an expense of the Initial Public
Offering resulting in a charge directly to shareholders’ equity. The Company estimated that the fair value of this unit purchase
option to be approximately $2.92 million (or $7.30 per unit) using the Black-Scholes option-pricing model. The fair value of the
unit purchase option granted to EBC was estimated as of the date of grant using the following assumptions: (1) expected volatility
of 99.10%, (2) risk-free interest rate of 1.53% and (3) expected life of five years. The unit purchase option may be exercised
for cash or on a “cashless” basis, at the holder’s option (except in the case of a forced cashless exercise upon
the Company’s redemption of the Warrants, as described in Note 3), such that the holder may use the appreciated value of
the unit purchase option (the difference between the exercise prices of the unit purchase option and the underlying Warrants and
the market price of the Units and underlying Ordinary Shares) to exercise the unit purchase option without the payment of any cash.
The Company will have no obligation to net cash settle the exercise of the unit purchase option or the Warrants underlying the
unit purchase option. The holder of the unit purchase option will not be entitled to exercise the unit purchase option or the Warrants
underlying the unit purchase option unless a registration statement covering the securities underlying the unit purchase option
is effective or an exemption from registration is available. If the holder is unable to exercise the unit purchase option or underlying
Warrants, the unit purchase option or Warrants, as applicable, will expire worthless.
Registration Rights
The Initial Shareholders
are entitled to registration rights with respect to their initial shares (and any securities issued upon conversion of working
capital loans) and the purchasers of the Private Placement Units are entitled to registration rights with respect to the Private
Placement Units (and underlying securities), pursuant to an agreement dated December 12, 2014. The holders of the majority of the
initial shares are entitled to demand that the Company register these shares at any time commencing three months prior to the first
anniversary of the consummation of a Business Combination. The holders of the Private Placement Units (or underlying securities)
are entitled to demand that the Company register these securities at any time after the Company consummates a Business Combination.
In addition, the holders have certain “piggy-back” registration rights on registration statements filed after the Company’s
consummation of a Business Combination.
Origo Acquisition Corporation
Notes to Unaudited Condensed Financial
Statements
May 31, 2017
Nasdaq Listing Rules
On February 21,
2017, the Company received a written notice (the “Notice”) from the Listing Qualifications Department of The
Nasdaq Stock Market LLC (“Nasdaq”) indicating that we are not in compliance with Listing Rule 5550(a)(3) (the
“Minimum Public Holders Rule”), which requires the Company to have at least 300 public holders for continued
listing on the Nasdaq Capital Market. The Notice was only a notification of deficiency, not of imminent delisting, and had
no current effect on the listing or trading of the Company's securities on the Nasdaq Capital Market. The Notice states that
the Company is required to submit a plan to evidence compliance with the Minimum Public Holders Rule no later than April 7,
2017, which we submitted. On April 20, 2017, Nasdaq granted the Company an extension to regain compliance with the Minimum
Public Holders Rule to August 21, 2017. The Company cannot assure that its securities will continue to be listed on Nasdaq in
the future prior to an initial Business Combination. Additionally, in connection with the initial Business Combination, it is
likely that Nasdaq will require the Company to file a new initial listing application and meet its initial listing
requirements as opposed to its more lenient continued listing requirements. The Company cannot assure that it will be able to
meet those initial listing requirements at that time.
Note 7 - Shareholder Equity
Preferred Shares
The Company is authorized
to issue 1,000,000 preferred shares with a par value of $0.0001 per share with such designation, rights and preferences as may
be determined from time to time by the Company’s board of directors.
As of May 31, 2017,
there are no preferred shares issued or outstanding.
Ordinary Shares
The Company is authorized
to issue 100,000,000 Ordinary Shares with a par value of $0.0001 per share.
At the Meeting
on June 10, 2016, shareholders holding 1,054,401 Public Shares exercised their right to convert such Public Shares into a pro
rata portion of the Trust Account (see Note 1). As a result, the Company has an aggregate of 4,481,599 Ordinary Shares
outstanding as of November 30, 2016. Of these, an aggregate of 2,533,704 Ordinary Shares subject to possible conversion were
classified as temporary equity in the accompanying Balance Sheet.
At the December and
March Meeting, shareholders holding 36,594 and 1,123,568 Public Shares exercised their right to convert such Public Shares into
a pro rata portion of the Trust Account, respectively (see Note 1). As a result, the Company has an aggregate of 3,321,437 Ordinary
Shares outstanding as of May 31, 2017. Of these, an aggregate of 1,301,659 Ordinary Shares subject to possible conversion are
classified as temporary equity in the accompanying Balance Sheet.
Note 8 - Subsequent Events
Subsequent to May 31,
2017, the Company issued promissory notes in an aggregate amount of $82,000 and $75,000 to the new management and EBC, respectively,
of which $25,000 of proceeds were received as of May 31, 2017 from both new management and EBC. The notes are unsecured, non-interest
bearing and are due upon consummation of a Business Combination. An aggregate of approximately $100,000 was deposited to the Trust
Account subsequent to May 31, 2017.