ECAC E-Compass Acquisition Corp. - Ordinary Shares

RISK FACTORS

You should consider carefully the following risk factors, as well as the other information set forth in this proxy statement/prospectus, before making a decision on the Acquisition.

Risks Related to NYM’s Business

The following risk factors apply to the business and operations of NYM, as well as to the business and operations of NYM following the completion of the Business Combination. Any of the risk factors described below could significantly and adversely affect NYM’s business, prospects, sales, revenues, gross profit, cash flows, financial condition, and results of operations.

NYM’s continued growth depends on new store acquisitions and openings and on increasing same store sales, and NYM’s failure to achieve these goals could negatively impact its results of operations and financial condition.

NYM’s growth strategy depends, in large part, on acquiring and opening new stores in existing and new areas and operating those stores successfully. Successful implementation of this strategy is dependent on sufficient capital support from financing, finding suitable stores to acquire, identifying suitable locations and negotiating acceptable lease terms for store sites, as it faces competition from other retailers for such sites. There can be no assurance that NYM will continue to grow through new store acquisitions and openings. NYM may not be able to obtain sufficient capital support for the expansion plan, or successfully implement the plan to acquire or open new stores timely or within budget or operate them successfully, and there can be no assurance that store acquisition or opening costs for, net sales of, contribution margin of and average payback period on initial investment for new stores will conform to NYM’s operating model discussed elsewhere in this Registration Statement. Lower contribution margins from new stores, along with the impact of related store acquisition, opening and store management relocation costs, may have an adverse effect on NYM’s financial condition and operating results. In addition, if NYM acquires stores in the future, it may not be able to successfully integrate those stores into its existing store base and those stores may not be as profitable as its existing stores. 

Also, NYM may not be able to successfully hire, train and retain new store employees or integrate those employees into the programs, policies and culture of NYM. NYM or its third party vendors may not be able to adapt its distribution, management and other operating systems to adequately supply products to new stores at competitive prices so that it can operate the stores in a successful and profitable manner. NYM may not have the level of cash flow or financing necessary to support its growth strategy. 

Additionally, NYM’s acquisition and opening of new stores will place increased demands on its operational, managerial and administrative resources. These increased demands could cause NYM to operate its existing business less effectively, which in turn could cause a deterioration in the financial performance of NYM’s existing stores. If NYM experiences a decline in performance, it may slow or discontinue store openings, or may decide to close stores that it is unable to operate in a profitable manner.

Additionally, some of NYM’s new stores may be located in areas where it has little experience or a lack of brand recognition. Those markets may have different competitive conditions, market conditions, consumer tastes and discretionary spending patterns than NYM’s existing markets, which may cause these new stores to be less successful than stores in NYM’s existing markets.

NYM’s operating results and stock price will be adversely affected if it fails to implement its growth strategy or if it invests resources in a growth strategy that ultimately proves unsuccessful.

NYM’s newly opened stores may negatively impact its financial results in the short-term and may not achieve sales and operating levels consistent with NYM’s mature store base on a timely basis or at all.

NYM has actively pursued new store growth and plans to continue doing so in the future. NYM cannot assure you that its new store acquisitions or openings will be successful or result in greater sales and profitability. New store openings may negatively impact NYM’s financial results in the short-term due to the effect of store opening costs and lower sales and contribution margin during the initial period following opening. New stores build their sales volume and their customer base over time and, as a result, generally have lower margins and higher operating expenses, as a percentage of net sales, than NYM’s more mature stores. A new store can take more than a year to achieve a level of operating performance comparable to NYM’s similarly existing stores. Further, NYM has experienced in the past, and expects to experience in the future, some sales volume transfer from its existing stores to its new stores as some of NYM’s existing customers switch to new, closer locations. As a result, part of the increase of the overall sales to NYM arising from a new store opening or a store acquisition may be offset by the “sales volume transfer” phenomena. 

The competition from competitors may increase intensively in the future.

Food retail is a large and highly competitive industry. However, NYM believes that the market participants in the Chinese supermarket industry are highly fragmented and immature. Currently, NYM faces competition from smaller or dispersed competitors focusing on the niche market of Chinese consumers. However, with the rapid growth of the Chinese and other Asian population and their consumption power, other competitors may also begin operating in this niche market in the future. Those competitors include: (i) national conventional supermarkets, (ii) regional supermarkets, (iii) national superstores, (iv) alternative food retailers, (v) local foods stores, (vi) small specialty stores, and (vii) farmers’ markets.

The national and regional supermarket chains are experienced in operating multiple stores locations, expanding management and they have greater marketing or financial resources than NYM does. Even though they currently offer only a limited selection of Chinese and Asian specialty foods, they may be able to devote greater resources to sourcing, promoting and selling their products if they choose to do so. On the contrary, the local food stores and markets are small in size with a deep understanding of local preferences, but their lack of scale results in high risk and limited growth potential.

If more and more competitors devote into this market segment aiming to serve Chinese and other Asian customers in the future, the competition will increase. NYM’s operating results may be negatively impacted through a loss of sales, reduction in margin from competitive price changes and/or greater operating costs such as marketing, due to the increase of competition.

NYM relies on a combination of product offerings, customer service, store format, location and pricing to compete.

NYM competes with other food retailers on a combination of factors, primarily product selection and quality, customer service, store layout and decoration, location and price. NYM’s success depends on its ability to offer products that appeal to its customers' preferences. Failure to offer such products, or to accurately forecast changing customer preferences, could lead to a decrease in the number of customer transactions at NYM’s stores and in the amount customers spend at NYM’s stores.

Pricing in particular is a significant driver of consumer choice in NYM’s industry and NYM expects competitors to continue to apply pricing and other competitive pressures. To the extent that NYM’s competitors lower prices, its ability to maintain gross profit margins and sales levels may be negatively impacted. Some of NYM’s competitors may have greater resources than it does. These competitors could use these advantages to take measures, including reducing prices, which could adversely affect NYM’s competitive position, financial condition and results of operations.

If NYM does not succeed in offering attractively priced products that consumers intend to purchase or are unable to provide a convenient and appealing shopping experience, NYM’s sales, operating margins and market share may decrease, resulting in reduced profitability. 

Economic conditions that impact consumer spending could materially affect NYM’s business.

Ongoing economic uncertainty continues to negatively affect consumer confidence and discretionary spending. NYM’s operating results may be materially affected by changes in economic conditions nationwide or in the regions in which NYM operates that impact consumer confidence and spending, including discretionary spending. This risk may be exacerbated if customers choose lower-cost alternatives to NYM’s product offerings in response to economic conditions. In particular, a decrease in discretionary spending could adversely impact sales of certain of NYM’s higher margin product offerings. Future economic conditions affecting disposable consumer income, such as employment levels, business conditions, changes in housing market conditions, the availability of consumer credit, interest rates, tax rates and fuel and energy costs, could reduce overall consumer spending or cause consumers to shift their spending to lower-priced competitors. In addition, inflation or deflation can impact NYM’s business. Food deflation could reduce sales growth and earnings, while food inflation, combined with reduced consumer spending, could reduce gross profit margins. As a result, NYM’s results of operations could be materially adversely affected.

NYM’s existing stores are mainly located in Northeastern American metropolitan areas. The geographic concentration of its stores creates an exposure to the economy of the Northeastern United States and any downturn in this region could materially adversely affect NYM’s financial condition and results of operations.

Perishable products make up a significant portion of NYM’s sales, and ordering errors or product supply disruptions may have an adverse effect on NYM’s profitability and operating results.

NYM has a significant focus on perishable products. Sales of perishable products accounted for approximately 60.2% of NYM’s net sales in fiscal year ended March 31, 2016. NYM has self-owned wholesale facilities and stable supply relationship with farm partners, which significantly reduces ordering errors and product disruption. However, NYM still relies on various suppliers and vendors to provide and deliver its product inventory on a continuous basis. NYM could suffer significant perishable product inventory losses in the event of the loss of a major supplier or vendor, disruption of its supply chain, extended power outages, natural disasters or other catastrophic occurrences. While NYM has implemented certain systems to ensure that its ordering is in line with demand, it cannot assure you that its ordering systems will always work efficiently, in particular in connection with the new additional stores, which have no, or a limited, ordering history. If NYM were to over-order, it could suffer inventory losses, which would negatively impact its operating results.

The operation of new stores and online sales may cannibalize sales in NYM’s stores and its financial results can be affected by economic and competitive conditions in this area .

All of NYM’s existing stores are located in the Northeastern United States and it intends to grow its store base in this area. New stores are expected to be opened in the Greater New York City and Boston metropolitan areas. As NYM opens new stores in closer proximity to its customers who currently travel longer distances to shop at NYM’s stores, NYM expects some of these customers to take advantage of the convenience of NYM’s new locations. Simultaneously, NYM will develop online sales to cover the customers living in a 2.5-hour drive radius, which may satisfy the demand from those Chinese customers living in the suburbs.

Some sales volume may transfer from NYM’s existing stores to its new stores as some of its existing customers switch to these new, closer locations, or convenient online shopping. Consequently, NYM’s new stores and online sales may adversely impact sales at NYM’s existing stores.

Disruption of relationships with vendors could negatively affect NYM’s business.

NYM Purchases vegetables and fruits directly from farms and other vendors and maintains stable relationships with the vendors to ensure reliable supplies of popular seasonal Chinese specialty of vegetables and fruits. NYM also depends on third-party suppliers for exclusive third-party brands. The cancellation of NYM’s supply arrangement with any of its suppliers or the disruption, delay or inability in supply from its suppliers could adversely affect NYM’s sales. If NYM’s suppliers fail to comply with food safety or other laws and regulations, or face allegations of non-compliance, their operations may be disrupted. NYM cannot assure you that it would be able to find replacement suppliers on commercially reasonable terms.

NYM may be unable to protect or maintain its intellectual property, which could result in customer confusion, a negative perception of its brand and adversely affect its business.

NYM believes that its intellectual property has substantial value and has contributed significantly to the success of NYM’s business. In particular, NYM’s trademarks, including New York Mart, are valuable assets that reinforce NYM’s customers' favorable perception of its stores.

From time to time, third parties have used names similar to NYM’s, have applied to register trademarks similar to NYM’s and, as NYM believes, have infringed or misappropriated NYM’s intellectual property rights. NYM responds to these actions on a case-by-case basis, including, where appropriate, by sending cease and desist letters and commencing opposition actions and litigation. The outcomes of these actions have included both negotiated out-of-court settlements as well as litigation. NYM cannot assure you that the steps it has taken to protect its intellectual property rights are adequate, that its intellectual property rights can be successfully defended and asserted in the future or that third parties will not infringe upon or misappropriate any such rights. In addition, NYM’s trademark rights and related registrations may be challenged in the future and could be canceled or narrowed. Failure to protect NYM’s trademark rights could prevent NYM in the future from challenging third parties who use names and logos similar to NYM’s trademarks, which may in turn cause consumer confusion or negatively affect consumers' perception of NYM’s brand and products, and eventually adversely affect NYM’s sales and profitability. Moreover, intellectual property disputes and proceedings and infringement claims may result in a significant distraction for management and significant expense, which may not be recoverable regardless of whether NYM is successful. Such proceedings may be protracted with no certainty of success, and an adverse outcome could subject NYM to liabilities, force NYM to cease use of certain trademarks or other intellectual property or force NYM to enter into licenses with others. Any one of these occurrences may have a material adverse effect on NYM’s business, results of operations and financial condition. 

If NYM experiences a data security breach and confidential customer information is disclosed, NYM may be subject to penalties and experience negative publicity, which could affect NYM’s customer relationships and have a material adverse effect on its business.

NYM and its customers could suffer harm if customer information was accessed by third parties due to a security failure in NYM’s systems. The collection of data and processing of transactions requires NYM to receive, transmit and store a large amount of personally identifiable and transaction related data. This type of data is subject to legislation and regulation in various jurisdictions. Recently, data security breaches suffered by well-known companies and institutions have attracted a substantial amount of media attention, prompting state and federal legislative proposals addressing data privacy and security. If some of the current proposals are adopted, NYM may be subject to more extensive requirements to protect the customer information that it processes in connection with the purchases of NYM’s products. NYM may become exposed to potential liability with respect to the data that it collects, manages and processes, and may incur legal costs if its information security policies and procedures are not effective or if it is required to defend its methods of collection, processing and storage of personal data. Future investigations, lawsuits or adverse publicity relating to NYM’s methods of handling personal data could adversely affect its business, results of operations, financial condition and cash flows due to the costs and negative market reaction relating to such developments. Additionally, if NYM suffers data breaches, one or more of the credit card processing companies that it relies on may refuse to allow it to continue to participate in their network, which would limit NYM’s ability to accept credit cards at its stores and could adversely affect its business, results of operations, financial condition and cash flows.

Data theft, information espionage or other criminal activity directed at the retail industry or computer or communications systems may materially adversely affect NYM’s business by causing NYM to implement costly security measures in recognition of actual or potential threats, by requiring NYM to expend significant time and expense developing, maintaining or upgrading its information technology systems and by causing it to incur significant costs to reimburse third parties for damages. Such activities may also materially adversely affect NYM’s financial condition, results of operations and cash flows by reducing consumer confidence in the marketplace and by modifying consumer spending habits.

If NYM is unable to renew or replace current store leases or if it is unable to enter into leases for additional stores on favorable terms, or if one or more of its current leases are terminated prior to expiration of their stated term, and it cannot find suitable alternate locations, NYM’s growth and profitability could be negatively impacted.

NYM currently leases all of its store locations. Many of NYM’s current leases provide unilateral option to renew for several additional rental periods at specific rental rates. NYM’s ability to re-negotiate favorable terms on an expiring lease or to negotiate favorable terms for a suitable alternate location, and NYM’s ability to negotiate favorable lease terms for additional store locations, could depend on conditions in the real estate market, competition for desirable properties, its relationships with current and prospective landlords, or other factors that are not within NYM’s control. Any or all of these factors and conditions could negatively impact NYM’s growth and profitability. 

NYM leases certain of its stores and related properties from related parties.

Long Deng, one of NYM’s directors and executive officers, owns 50% of Dragon Development LLC, which leases to NYM the premises at which Strong America, one of NYM’s wholesale subsidiaries, is located. During fiscal year ended March 31, 2016, rental payments (excluding maintenance and taxes that NYM is obligated to pay) under the leases from Dragon Development LLC were $588,000. The leases with Dragon Development LLC renewed on May 1, 2016, and their remaining terms are 10 years. NYM has no assurance that these related parties will renew the lease agreements with it after expiration. If NYM cannot renew the leases, it will have to move its stores and warehouses locations, which increases the uncertainty of finding suitable locations for those stores and the reputation recognition in new locations, which may adversely affect NYM’s sales, expenses, profit and financial position.

Failure to retain NYM’s senior management and other key personnel may adversely affect its operations.

NYM’s success is substantially dependent on the continued service of its senior management and other key personnel. These executives, and in particular Long Deng, NYM’s Executive Chairman and Chief Executive Officer and Chief Operating Officer, have been primarily responsible for determining the strategic direction of NYM’s business and for executing its growth strategy and are integral to its brand and culture, and the reputation NYM enjoys with suppliers and consumers. The loss of the services of any of these executives and other key personnel could have a material adverse effect on NYM’s business and prospects, as NYM may not be able to find suitable individuals to replace them on a timely basis, if at all. In addition, any such departure could be viewed in a negative light by investors and analysts, which may cause NYM’s stock price to decline. The loss of key employees could negatively affect NYM’s business.

If NYM is unable to attract, train and retain employees, it may not be able to grow or successfully operate its business.

The retail store industry is labor intensive, and NYM’s success depends in part upon its ability to attract, train and retain a sufficient number of employees who understand and appreciate NYM’s culture and are able to represent its brand effectively and establish credibility with its business partners and consumers. NYM’s ability to meet its labor needs, while controlling wage and labor-related costs, is subject to numerous external factors, including the availability of a sufficient number of qualified persons in the work force in the markets in which NYM is located, unemployment levels within those markets, prevailing wage rates, changing demographics, health and other insurance costs and changes in employment legislation. In the event of increasing wage rates, if NYM fails to increase its wages competitively, the quality of its workforce could decline, causing its customer service to suffer, while increasing its wages could cause its earnings to decrease. If NYM is unable to hire and retain employees capable of meeting its business needs and expectations, its business and brand image may be impaired. Any failure to meet NYM’s staffing needs or any material increase in turnover rates of NYM’s employees may adversely affect its business, results of operations and financial condition.

Changes in and enforcement of immigration laws could increase NYM’s costs and adversely affect NYM’s ability to attract and retain qualified store-level employees.

Federal and state governments from time to time implement immigration laws, regulations or programs that regulate NYM’s ability to attract or retain qualified foreign employees. Some of these changes may increase NYM’s obligations for compliance and oversight, which could subject NYM to additional costs and make NYM’s hiring process more cumbersome, or reduce the availability of potential employees. Although NYM has implemented, and is in the process of enhancing, procedures to ensure its compliance with the employment eligibility verification requirements, there can be no assurance that these procedures are adequate and some of its employees may, without NYM’s knowledge, be unauthorized workers. The employment of unauthorized workers may subject NYM to fines or civil or criminal penalties, and if any of NYM’s workers are found to be unauthorized, NYM could experience adverse publicity that negatively impacts its brand and makes it more difficult to hire and keep qualified employees. NYM may be required to terminate the employment of certain of its employees who were determined to be unauthorized workers. The termination of a significant number of employees may disrupt NYM’s operations, cause temporary increases in NYM’s labor costs as it trains new employees and result in additional adverse publicity. NYM’s financial performance could be materially harmed as a result of any of these factors. 

Prolonged labor disputes with employees and increases in labor costs could adversely affect NYM’s business.

A considerable amount of NYM’s operating costs is attributable to labor costs and, therefore, its financial performance is greatly influenced by increases in wage and benefit costs, including pension and health care costs. As a result, NYM is exposed to risks associated with a competitive labor market. Rising health care and pension costs and the nature and structure of work rules will be important issues. Any work stoppages or labor disturbances as a result of employees’ dissatisfaction of their current employment terms could have a material adverse effect on NYM’s financial condition, results of operations and cash flows. NYM also expects that in the event of a work stoppage or labor disturbance, it could incur additional costs and face increased competition.

Various aspects of NYM’s business are subject to federal, state and local laws and regulations. NYM’s compliance with these regulations may require additional capital expenditures and could materially adversely affect its ability to conduct its business as planned.

NYM is subject to federal, state and local laws and regulations relating to zoning, land use, environmental protection, workplace safety, food safety, public health, community right-to-know and alcoholic beverage and tobacco sales. In particular, the states in which NYM operates and several local jurisdictions regulate the licensing of supermarkets and the sale of alcoholic beverages. In addition, certain local regulations may limit NYM’s ability to sell alcoholic beverages at certain times. NYM is also subject to laws governing its relationship with employees, including minimum wage requirements, overtime, working conditions, immigration, disabled access and work permit requirements. Compliance with new laws in these areas, or with new or stricter interpretations of existing requirements, could reduce the revenue and profitability of NYM’s stores and could otherwise materially adversely affect NYM’s business, financial condition or results of operations. NYM’s new store openings could be delayed or prevented or its existing stores could be impacted by difficulties or failures in NYM’s ability to obtain or maintain required approvals or licenses. NYM’s stores are subject to unscheduled inspections on a regular basis, which, if violations are found, could result in the assessment of fines, suspension of one or more needed licenses and, in the case of repeated "critical" violations, closure of the store until a re-inspection demonstrates that NYM has remediated the problem. Certain of NYM’s parking lots and warehouses either have only temporary certificates of occupancy or are awaiting a certificate of occupancy which, if not granted, would require NYM to stop using such property. Additionally, a number of federal, state and local laws impose requirements or restrictions on business owners with respect to access by disabled persons. NYM’s compliance with these laws may result in modifications to NYM’s properties, or prevent NYM from performing certain further renovations. NYM cannot predict the nature of future laws, regulations, interpretations or applications, or determine what effect either additional government regulations or administrative orders, when and if promulgated, or disparate federal, state and local regulatory schemes would have on NYM’s business in the future.

NYM’s plans to acquire and open new stores requires NYM to spend capital. Failure to use its capital efficiently could have an adverse effect on NYM’s profitability.

NYM’s growth strategy depends on its acquisition of and opening new stores, which will require NYM to use cash generated by its operations and a portion of the net proceeds of future equity or debt financing and borrowing under bank credit line. NYM cannot assure you that cash generated by its operations, the net proceeds of future equity or debt financing and borrowing under bank credit line will be sufficient to allow NYM to implement its growth strategy. If any of these initiatives prove to be unsuccessful, NYM may experience reduced profitability and it could be required to delay, significantly curtail or eliminate planned store openings, which could have a material adverse effect on its financial condition and future operating performance and the price of its common stock.

Litigation may materially adversely affect NYM’s business, financial condition and results of operations.

NYM’s operations are characterized by a high volume of customer traffic and by transactions involving a wide variety of product selections. These operations carry a higher exposure to consumer litigation risk when compared to the operations of companies operating in many other industries. Consequently, NYM may be a party to individual personal injury, product liability and other legal actions in the ordinary course of its business, including litigation arising from food-related illness. The outcome of litigation, particularly class action lawsuits and regulatory actions, is difficult to assess or quantify. Plaintiffs in these types of lawsuits may seek recovery of very large or indeterminate amounts, and the magnitude of the potential loss relating to such lawsuits may remain unknown for substantial periods of time. The cost to defend future litigation may be significant. There may also be adverse publicity associated with litigation that may decrease consumer confidence in NYM’s businesses, regardless of whether the allegations are valid or whether NYM is ultimately found liable. As a result, litigation may materially adversely affect NYM’s businesses, financial condition, results of operations and cash flows.

Increased commodity prices and availability may impact profitability.

Many of NYM’s products include ingredients such as wheat, corn, oils, milk, sugar, cocoa and other commodities. Commodity prices worldwide have been increasing. While commodity price inputs do not typically represent the substantial majority of NYM’s product costs, any increase in commodity prices may cause its vendors to seek price increases from NYM. Although NYM is typically able to mitigate vendor efforts to increase its costs, it may be unable to continue to do so, either in whole or in part. In the event NYM is unable to continue mitigating potential vendor price increases, it may in turn consider raising its prices, and its customers may be deterred by any such price increases. NYM’s profitability may be impacted through increased costs to it which may impact gross margins, or through reduced revenue as a result of a decline in the number and average size of customer transactions.

Severe weather, natural disasters and adverse climate changes may materially adversely affect NYM’s financial condition and results of operations.

Severe weather conditions and other natural disasters in areas where NYM has stores or from which NYM obtains the products it sells may materially adversely affect its retail operations or its product offerings and, therefore, its results of operations. Such conditions may result in physical damage to, or temporary or permanent closure of, one or more of NYM’s stores, an insufficient work force in NYM’s markets and/or temporary disruption in the supply of products, including delays in the delivery of goods to NYM’s stores or a reduction in the availability of products in its stores. In addition, adverse climate conditions and adverse weather patterns, such as drought or flood, that impact growing conditions and the quantity and quality of crops may materially adversely affect the availability or cost of certain products within its supply chain. Any of these factors may disrupt NYM’s businesses and materially adversely affect its financial condition, results of operations and cash flows.

The occurrence of a widespread health epidemic may materially adversely affect NYM’s financial condition and results of operations.

NYM’s business may be severely impacted by wartime activities, threats or acts of terror or a widespread regional, national or global health epidemic, such as pandemic flu. Such activities, threats or epidemics may materially adversely impact NYM’s business by disrupting production and delivery of products to NYM’s stores, by affecting NYM’s ability to appropriately staff its stores or by causing customers to avoid public gathering places or otherwise change their shopping behaviors.

The unaudited pro forma financial information included elsewhere in this proxy statement/prospectus may not be indicative of what the combined company’s actual financial position or results of operations would have been.

The unaudited pro forma financial information in this joint proxy statement/prospectus is presented for illustrative purposes only, has been prepared based on a number of assumptions and is not necessarily indicative of what the combined company’s actual financial position or results of operations would have been had the business combination been completed on the dates indicated. See “Unaudited Pro Forma Consolidated Combined Financial Information”.

NYM needs approximately $25 million and $50 million for the years ended March 31, 2017 and March 31, 2018, respectively, in order to achieve its planned growth for that year and if it cannot successfully obtain sufficient capital, the financial results and stock price of iFresh after the business combination will be adversely affected.

NYM believes that it needs approximately $25 million and $50 million for the years ended March 31, 2017 and March 31, 2018, respectively, in order to achieve its planned growth for that year. If it is not able to obtain financing on commercially reasonable terms in connection with the Business Combination, as is contemplated by the parties, it may not be able to implement its growth plan. If it is unable to effect its growth plan, NYM’s financial results will be significantly worse than anticipated and its stock price may decline as a result.

Risk Relating to E-compass

E-compass will be forced to liquidate the trust account if it cannot consummate a business combination by February 18, 2017. In the event of a liquidation, E-compass’s public shareholders will receive $10.40 per ordinary share and the E-compass rights will expire worthless.

If E-compass is unable to complete a business combination by February 18, 2017 and is forced to liquidate, the per-ordinary share liquidation distribution will be $10.40 (other than for E-compass’s lead investor, who will receive $10.00 per share). Furthermore, there will be no distribution with respect to the E-compass rights, which will expire worthless as a result of E-compass’s failure to complete a business combination.

You must tender your E-compass ordinary shares in order to validly seek redemption at the extraordinary general meeting of shareholders.

In connection with tendering your shares for redemption, you must elect either to physically tender your ordinary share certificates to E-compass’s transfer agent in each case by the business day prior to the consummation of the Business Combination, or to deliver your ordinary shares to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, which election would likely be determined based on the manner in which you hold your ordinary shares. The requirement for physical or electronic delivery by the business day prior to the consummation of the Business Combination ensures that a redeeming holder’s election to redeem is irrevocable once the Business Combination is consummated. Any failure to observe these procedures will result in your loss of redemption rights in connection with the vote on the Business Combination.

If third parties bring claims against E-compass, the proceeds held in trust could be reduced and the per-share liquidation price received by E-compass’s shareholders may be less than $10.40.

E-compass’s placing of funds in trust may not protect those funds from third party claims against E-compass. Although E-compass has received from many of the vendors, service providers (other than its independent accountants) and prospective target businesses with which it does business executed agreements waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of E-compass’s public shareholders, they may still seek recourse against the trust account. Additionally, a court may not uphold the validity of such agreements. Accordingly, the proceeds held in trust could be subject to claims which could take priority over those of E-compass’s public shareholders. If E-compass liquidates the trust account before the completion of a business combination and distributes the proceeds held therein to its public shareholders, Richard Xu and Chen Liu have agreed that they will be personally liable to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by E-compass for services rendered or contracted for or products sold to E-compass. However, E-compass cannot assure you that they will be able to meet such obligation. Therefore, the per-share distribution from the trust account for our shareholders other than our lead investor may be less than $10.40 due to such claims.

Additionally, if E-compass is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against it which is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in E-compass’s bankruptcy estate and subject to the claims of third parties with priority over the claims of its shareholders. To the extent any bankruptcy claims deplete the trust account, E-compass may not be able to return $10.40 to our public shareholders.

Any distributions received by E-compass shareholders could be viewed as an unlawful payment if it was proved that immediately following the date on which the distribution was made, E-compass was unable to pay its debts as they fell due in the ordinary course of business.

E-compass’s Amended and Restated Memorandum and Articles of Association provides that it will continue in existence only until February 18, 2017. If E-compass is unable to consummate a transaction within the required time periods, upon notice from E-compass, the trustee of the trust account will distribute the amount in its trust account to its public shareholders. Concurrently, E-compass shall pay, or reserve for payment, from funds not held in trust, its liabilities and obligations, although E-compass cannot assure you that there will be sufficient funds for such purpose. If there are insufficient funds held outside the trust account for such purpose, Richard Xu and Chen Liu have agreed that they will be liable to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by E-compass for services rendered or contracted for or products sold to E-compass.

Thereafter, E-compass’s sole business purpose will be to dissolve through the voluntary liquidation procedure under the Companies Law. In such a situation under the Companies Law, a liquidator would be appointed and would give at least 21 days’ notice to creditors of his intention to make a distribution by notifying known creditors (if any) and by placing a public advertisement in the Cayman Islands Official Gazette, although in practice this notice requirement need not necessarily delay the distribution of assets as the liquidator may be satisfied that no creditors would be adversely affected as a consequence of a distribution before this time period has expired. As soon as the affairs of the company are fully wound-up, the liquidator must lay his final report and accounts before a final general meeting which must be called by a public notice at least one month before it takes place. After the final meeting, the liquidator must make a return to the Registrar confirming the date on which the meeting was held and three months after the date of such filing the company is dissolved. It is E-compass’s intention to liquidate the trust account to its public shareholders as soon as reasonably possible and E-compass’s insiders have agreed to take any such action necessary to liquidate the trust account and to dissolve the company as soon as reasonably practicable if E-compass does not complete a business combination within the required time period. Pursuant to E-compass’s Amended and Restated Memorandum and Articles of Association, failure to consummate a business combination by February 18, 2017, will trigger an automatic winding up of the company.

If E-compass is forced to enter into an insolvent liquidation, any distributions received by E-compass shareholders could be viewed as an unlawful payment if it was proved that immediately following the date on which the distribution was made, E-compass was unable to pay its debts as they fall due in the ordinary course of business. As a result, a liquidator could seek to recover all amounts received by E-compass’s shareholders. Furthermore, E-compass’s board may be viewed as having breached their fiduciary duties to its creditors and/or may have acted in bad faith, and thereby exposing itself and E-compass to claims of damages, by paying public shareholders from the trust account prior to addressing the claims of creditors. E-compass cannot assure you that claims will not be brought against it for these reasons. E-compass and any of E-compass’s insiders who knowingly and willfully authorized or permitted any distribution to be paid while E-compass was unable to pay its debts as they fall due in the ordinary course of business would be guilty of an offence and may be liable to a fine of KYD15,000 (approximately US$18,000) and to imprisonment for five years in the Cayman Islands.

If E-compass’s due diligence investigation of NYM was inadequate, then shareholders of E-compass following the Business Combination could lose some or all of their investment.

Even though E-compass conducted a due diligence investigation of NYM, it cannot be sure that this diligence uncovered all material issues that may be present inside NYM or its business, or that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of NYM and its business and outside of its control will not later arise.

All of E-compass’s officers and directors own E-compass ordinary shares and E-compass rights which will not participate in liquidation distributions and, therefore, they may have a conflict of interest in determining whether the business combination is appropriate.

All of E-compass’s officers and directors own an aggregate of 1,000,000 E-compass ordinary shares and 310,000 E-compass units. Such individuals have waived their right to redeem these shares, or to receive distributions with respect to these shares upon the liquidation of the trust account if E-compass is unable to consummate a business combination. Accordingly, the E-compass ordinary shares, as well as the E-compass units purchased by our officers or directors, will be worthless if E-compass does not consummate a business combination. Based on a market price of $10.20 per E-compass ordinary share on July 29, 2016 and $0.26 per right on July 29, 2016, the value of these shares and units was approximately $54.3 million. The E-compass ordinary shares acquired prior to the IPO, as well as the E-compass units will be worthless if E-compass does not consummate a business combination. Consequently, our directors’ and officers’ discretion in identifying and selecting NYM as a suitable target business may result in a conflict of interest when determining whether the terms, conditions and timing of the Business Combination are appropriate and in E-compass’s shareholders’ best interest.

E-compass’s public shareholders, together with any affiliates of theirs or any other person with whom they are acting in concert or as a “group”, are restricted from seeking redemption rights with respect to more than 20% of the E-compass ordinary shares sold in the IPO.

E-compass is offering each of its public shareholders (but not its Initial Shareholders) the right to have his, her, or its ordinary shares redeemed for cash. Notwithstanding the foregoing, an E-compass public shareholder, together with any affiliate of his or any other person with whom he is acting in concert or as a “group” will be restricted from seeking redemption rights with respect to more than 20% of the E-compass ordinary shares sold in the IPO. Accordingly, if you beneficially own more than 20% of the E-compass ordinary shares sold in the IPO and the Business Combination is approved, you will not be able to seek redemption rights with respect to the full amount of your E-compass ordinary shares and may be forced to hold such additional E-compass ordinary shares or sell them in the open market. E-compass cannot assure you that the value of such additional E-compass ordinary shares will appreciate over time following the Business Combination or that the market price of E-compass’s ordinary shares will exceed the redemption price.

E-compass’s public shareholders, together with any affiliates of theirs or any other person with whom they are acting in concert or as a “group”, will be restricted from exercising voting rights with respect to more than 20% of the shares sold in the IPO.

Pursuant to E-compass’s Amended and Restated Memorandum and Articles of Association, without E-compass’s prior written consent, none of E-compass’s public shareholders, whether acting singly or with any affiliate or other person acting in concert or as a “group,” shall be permitted to exercise voting rights on any proposal submitted for consideration at the extraordinary general meeting with respect to more than 20% of the E-compass ordinary shares sold in the IPO. Accordingly, if you hold more than 20% of the E-compass ordinary shares sold in the IPO (such shares are referred to herein as “Excess Shares”), you will be restricted from exercising voting rights with respect to any Excess Shares and such Excess Shares will remain outstanding following consummation of the Business Combination. We cannot assure you that the value of such Excess Shares will appreciate over time following the Business Combination or that the market price of E-compass’s ordinary shares will exceed the per-share redemption price.

E-compass is requiring shareholders who wish to redeem their ordinary shares in connection with a proposed business combination to comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline for exercising their rights.

E-compass is requiring public shareholders who wish to redeem their ordinary shares to either tender their certificates to our transfer agent at any time prior to the business day immediately preceding the consummation of the proposed Business Combination or to deliver their shares to the transfer agent electronically using the Depository Trust Company’s, or DTC, DWAC (Deposit/Withdrawal At Custodian) System. In order to obtain a physical certificate, a shareholder’s broker and/or clearing broker, DTC and E-compass’s transfer agent will need to act to facilitate this request. It is E-compass’s understanding that shareholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. However, because we do not have any control over this process or over the brokers or DTC, it may take significantly longer than two weeks to obtain a physical stock certificate. While we have been advised that it takes a short time to deliver shares through the DWAC System, we cannot assure you of this fact. Accordingly, if it takes longer than E-compass anticipates for shareholders to deliver their ordinary shares, shareholders who wish to redeem may be unable to meet the deadline for exercising their redemption rights and thus may be unable to redeem their ordinary shares.

E-compass will require its public shareholders who wish to redeem their ordinary shares in connection with the Business Combination to comply with specific requirements for redemption described above, such redeeming shareholders may be unable to sell their securities when they wish to in the event that the Business Combination is not consummated.

If E-compass requires public shareholders who wish to redeem their ordinary shares in connection with the proposed Business Combination to comply with specific requirements for redemption as described above and the Business Combination is not consummated, E-compass will promptly return such certificates to its public shareholders. Accordingly, investors who attempted to redeem their ordinary shares in such a circumstance will be unable to sell their securities after the failed acquisition until E-compass has returned their securities to them. The market price for E-compass’s ordinary shares may decline during this time and you may not be able to sell your securities when you wish to, even while other shareholders that did not seek redemption may be able to sell their securities.

E-compass’s Initial Shareholders, including its officers and directors, control a substantial interest in E-compass and thus may influence certain actions requiring a shareholder vote.

E-compass’s Initial Shareholders, including all of its officers and directors, collectively own approximately 24.7% of its issued and outstanding ordinary shares. However, if a significant number of shareholders vote, or indicate an intention to vote, against the Business Combination, E-compass’s officers, directors, Initial Shareholders or their affiliates could make such purchases in the open market or in private transactions in order to influence the vote. E-compass’s Initial Shareholders have agreed to vote any shares they own in favor of the Business Combination. In addition, the lead investor from our initial public offering has agreed to vote 1,000,000 of the shares purchased by him in in the initial public offering, or approximately 18.8% of the outstanding shares in favor of the Business Combination Proposal.

If E-compass’s security holders exercise their registration rights with respect to their securities, it may have an adverse effect on the market price of E-compass’s securities.

E-compass’s initial shareholders are entitled to make a demand that it register the resale of their initial shares at any time commencing three months prior to the date on which their shares may be released from escrow. Additionally, the purchasers of E-compass units sold in an offering that was consummated simultaneously with the IPO or the E-compass unit offering, are entitled to demand that E-compass register the resale of their units and underlying ordinary shares at any time after E-compass consummates a business combination. If such persons exercise their registration rights with respect to all of their securities, then there will be an additional 1,341,000 E-compass ordinary shares eligible for trading in the public market. The presence of these additional ordinary shares trading in the public market may have an adverse effect on the market price of E-compass’s securities.

E-compass will not obtain an opinion from an unaffiliated third party as to the fairness of the Business Combination to its shareholders.

E-compass is not required to obtain an opinion from an unaffiliated third party that the price it is paying is fair to its public shareholders from a financial point of view. E-compass’s public shareholders therefore, must rely solely on the judgment of E-compass’s board of directors.

If the Business Combination’s benefits do not meet the expectations of financial or industry analysts, the market price of E-compass’s securities may decline.

The market price of E-compass’s securities may decline as a result of the Business Combination if:

Accordingly, investors may experience a loss as a result of decreasing stock prices.

E-compass’s directors and officers may have certain conflicts in determining to recommend the acquisition of NYM, since certain of their interests, and certain interests of their affiliates and associates, are different from, or in addition to, your interests as a shareholder.

E-compass’s management and directors have interests in and arising from the Business Combination that are different from, or in addition to, your interests as a shareholder, which could result in a real or perceived conflict of interest. These interests include the fact that certain of the E-compass ordinary shares owned by E-compass’s management and directors, or their affiliates and associates, would become worthless if the Redomestication and Business Combination Proposals are not approved and E-compass otherwise fails to consummate a business combination prior to its liquidation date.

E-compass will incur significant transaction costs in connection with transactions contemplated by the Acquisition Agreement.

E-compass will incur significant transaction costs in connection with the Business Combination. If the Business Combination is not consummated, E-compass may not have sufficient funds to seek an alternative business combination and may be forced to liquidate and dissolve.

Risk Factors Relating to the Redomestication and Business Combination

E-compass and NYM have incurred and expect to incur significant costs associated with the Business Combination. Whether or not the Business Combination is completed, the incurrence of these costs will reduce the amount of cash available to be used for other corporate purposes by iFresh if the Business Combination is completed or by E-compass if the Business Combination is not completed.

E-compass and NYM expect to incur significant costs associated with the Business Combination. Whether or not the Business Combination is completed, E-compass expects to incur approximately $[●] in expenses. These expenses will reduce the amount of cash available to be used for other corporate purposes by E-compass if the Business Combination is completed or by E-compass if the Business Combination is not completed.

In the event that a significant number of E-compass’s ordinary shares are redeemed, its stock may become less liquid following the Business Combination.

If a significant number of E-compass’s ordinary shares are redeemed, E-compass may be left with a significantly smaller number of shareholders. As a result, trading in the shares of the surviving company following the Business Combination may be limited and your ability to sell your shares in the market could be adversely affected.

Nasdaq may not list iFresh’s shares on its exchange, which could limit investors’ ability to make transactions in iFresh’s securities and subject iFresh to additional trading restrictions.

iFresh will be required to meet the initial listing requirements to be listed on the Nasdaq Stock Market. iFresh may not be able to meet those initial listing requirements. Even if iFresh’s securities are so listed, iFresh may be unable to maintain the listing of its securities in the future.

If iFresh fails to meet the initial listing requirements and Nasdaq does not list its securities on its exchange, iFresh could face significant material adverse consequences, including:

E-compass may waive one or more of the conditions to the Business Combination without resoliciting shareholder approval for the Business Combination.

E-compass may agree to waive, in whole or in part, some of the conditions to its obligations to complete the Business Combination, to the extent permitted by applicable laws. The board of directors of E-compass will evaluate the materiality of any waiver to determine whether amendment of this proxy statement/prospectus and resolicitation of proxies is warranted. In some instances, if the board of directors of E-compass determines that a waiver is not sufficiently material to warrant resolicitation of shareholders, E-compass has the discretion to complete the Business Combination without seeking further shareholder approval. For example, it is a condition to E-compass’s obligations to close the Business Combination that there be no restraining order, injunction or other order restricting NYM’s conduct of its business, however, if the board of directors of E-compass determines that any such order or injunction is not material to the business of NYM, then the board may elect to waive that condition and close the Business Combination.

There will be a substantial number of iFresh’s common stock available for sale in the future that may adversely affect the market price of iFresh’s common stock.

E-compass currently has authorized share capital of 101,000,000 shares consisting of 100,000,000 ordinary shares with a par value of $0.0001 per share and 1,000,000 shares of preferred stock with a par value of $0.0001 per share. iFresh currently is authorized to issue 100,000,000 shares of common stock with a par value of $0.0001 per share and 1,000,000 shares of preferred stock with a par value of $0.0001 per share.

The shares to be issued in the Business Combination to the post-Business Combination shareholders, will be subject to certain restrictions on sale and cannot be sold for six (6) months (or in certain cases, twelve (12) months) from the date of the Business Combination. In addition, the holders of the shares to be issued in the Business Combination are parties to a Registration Rights Agreement that would allow the sale of such shares to occur as early as 60 days from the date of the Business Combination. After the expiration of this restricted period, there will then be an additional 81,716,667 shares that are eligible for trading in the public market. The availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of iFresh’s shares.

Even if the Redomestication qualifies as a reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended, or the “Code,” a U.S. Holder generally may still recognize gain with respect to its E-compass securities at the effective time of the Redomestication.

Even if the Redomestication qualifies as a reorganization under Section 368(a) of the Code, a U.S. Holder (as that term is defined in the section entitled “Material U.S. Federal Income Tax Consequences — General”) of E-compass securities may still recognize gain (but not loss) upon the exchange of its E-compass securities solely for the securities of iFresh pursuant to the Redomestication under the “passive foreign investment company,” or “PFIC,” rules of the Code or under Section 367(b) of the Code, equal to the excess, if any, of the fair market value of the iFresh securities received in the Redomestication and the U.S. Holder’s adjusted tax basis in the corresponding E-compass securities surrendered in the Redomestication. In such event, the U.S. Holder’s aggregate tax basis in the iFresh securities received in connection with the Redomestication should be the same as the aggregate tax basis of the E-compass securities surrendered in the transaction, increased by any amount included in the income of such U.S. Holder under the PFIC rules or Section 367(b) of the Code, and such U.S. Holder’s holding period for the iFresh securities received in the Redomestication generally should include the holding period of the E-compass securities surrendered in the Redomestication. See the discussion in the sections entitled “Material U.S. Federal Income Tax Consequences — U.S. Holders — Tax Consequences of the Redomestication,” “— “PFIC Considerations” and “— Effect of Section 367(b).”

E-compass’s shareholders will experience immediate dilution as a consequence of the issuance of common stock as consideration in the Business Combination. Having a minority share position may reduce the influence that E-compass’ current shareholders have on the management of iFresh.

After the Business Combination, assuming no redemptions of ordinary shares for cash, E-compass’s current public shareholders will own approximately 22.6% of iFresh, E-compass’s current directors, officers and affiliates will own approximately 7.8% of iFresh, and the former shareholders of NYM will own approximately 69.6% of iFresh. Assuming redemption by holders of 3,000,000 E-compass’s outstanding ordinary shares, E-compass public shareholders will own approximately 6.3% of iFresh, E-compass’s current directors, officers and affiliates will own approximately 9.4% of iFresh, and the former shareholders of NYM will own approximately 84.3% of iFresh. The minority position of the former E-compass shareholders will give them limited influence over the management and operations of the post-Business Combination company.

iFresh is an “emerging growth company” and the reduced disclosure requirements applicable to emerging growth companies may make its securities less attractive to investors.

iFresh is an “emerging growth company,” as defined in the JOBS Act. It may remain an “emerging growth company” until the fiscal year ended December 31, 2020. However, if its non-convertible debt issued within a three-year period or revenues exceeds $1 billion, or the market value of its ordinary shares that are held by non-affiliates exceeds $700 million on the last day of the second fiscal quarter of any given fiscal year, iFresh would cease to be an emerging growth company as of the following fiscal year. As an emerging growth company, iFresh is not required to comply with the auditor attestation requirements of section 404 of the Sarbanes-Oxley Act, has reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and is exempt from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. Additionally, as an emerging growth company, iFresh has elected to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As such, iFresh’s financial statements may not be comparable to companies that comply with public company effective dates. As a result, potential investors may be less likely to invest in our securities.