The accompanying notes are an integral part
of the condensed financial statements.
The accompanying notes are an integral part
of the condensed financial statements.
The accompanying notes are an integral part
of the condensed financial statements.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2017
(Unaudited)
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
GP Investments Acquisition Corp. (the “Company”)
is a blank check company incorporated in the Cayman Islands on January 28, 2015. The Company was formed for the purpose of effecting
a merger, share exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses
(“Business Combination”).
At June 30, 2017, the Company had not yet commenced
operations. All activity through June 30, 2017 related to the Company’s formation, its Initial Public Offering (as defined
below), which is described below, and identifying and evaluating a target company for a Business Combination and activities in
connection with the announced and subsequently terminated proposed acquisition of WKI Holding Company, Inc. (“WKI”)
described below and the proposed acquisition of Rimini Street, Inc. (“Rimini Street”), as described in Note 6.
On April 19, 2016, the Company entered into an Agreement and Plan of Merger (as amended on July 28, 2016, the “Merger
Agreement”), by and among the Company, Let’s Go Acquisition Corp., a Delaware corporation and a wholly owned subsidiary
of the Company (“Let’s Go”), WKI, and, solely in its capacity as the initial Holder Representative thereunder,
WKI Group, LLC, a Delaware limited liability company. Pursuant to the Merger Agreement, the Company agreed to acquire all
of the outstanding capital stock of WKI, the parent company of World Kitchen, LLC, a leading multinational manufacturer and
marketer of houseware products. On November 11, 2016, the parties entered into a letter agreement terminating the Merger Agreement,
effective November 11, 2016.
On May 16, 2017,
the Company entered into an Agreement and Plan of Merger, as amended by Amendment No. 1 thereto on June 30, 2017 (the
“Rimini Merger Agreement”), by and among the Company, Let’s Go, Rimini Street and the Rimini
Holder Representative (as defined in the Rimini Merger Agreement). Pursuant to the Rimini Merger Agreement, the Company
agreed to acquire all of the outstanding capital stock of Rimini Street, a global provider of enterprise software products
and services, and the leading independent support provider for Oracle and SAP products, based on the number of clients
supported.
The registration statement for the Company’s
initial public offering (the “Initial Public Offering”) was declared effective on May 19, 2015. On May 26, 2015, the
Company consummated the Initial Public Offering of 17,250,000 units (“Units”), which included the exercise by the underwriters
of their entire overallotment option in the amount of 2,250,000 Units, at $10.00 per Unit, generating gross proceeds of $172,500,000.
The Initial Public Offering is further described in Note 3.
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the sale of 6,062,500 warrants (the “Private Placement Warrants”) at a price
of $1.00 per warrant in a private placement to the Company’s sponsor, GPIC Ltd, a Bermuda company (“Sponsor”),
generating gross proceeds of $6,062,500. The sale of Private Placement Warrants is further described in Note 4.
Transaction costs amounted to $10,960,590,
consisting of $4,312,500 of underwriting fees, $6,037,500 of deferred underwriting fees (which are held in the Trust Account (defined
below)) and $610,590 of Initial Public Offering costs. In addition, at June 30, 2017, $1,551 of cash was held outside of the Trust
Account and was available for working capital purposes.
Following the closing of the Initial Public
Offering, an amount of $172,500,000 ($10.00 per share) from the net proceeds of the sale of the Units in the Initial Public Offering
and the Private Placement Warrants was placed in a trust account (“Trust Account”) and invested in U.S. government
securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “1940
Act”), with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market
fund selected by the Company meeting the conditions of paragraphs (c)(2), (c)(3) and (c)(4) of Rule 2a-7 of the 1940 Act, as determined
by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the Trust Account
as described below.
On May 23, 2017, the Company held an extraordinary
general meeting of its shareholders whereby the shareholders approved an amendment to the Company’s Memorandum and Articles
of Association to extend the date by which the Company must consummate a Business Combination from May 26, 2017 to November 27,
2017 (“Extension Amendment”). The number of ordinary shares redeemed in connection with the Extension Amendment was
1,552,724. The Company distributed $15,608,196, or approximately, $10.05 per share, to redeeming shareholders. As of May 23, 2017,
the balance in the Company’s Trust Account, after deduction of the amount required to redeem the ordinary shares, was $157,779,604.
The Company’s management has broad discretion
with respect to the specific application of the net proceeds of its Initial Public Offering and Private Placement Warrants, although
substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The Company’s
Units are listed on the Nasdaq Capital Market (“NASDAQ”). Pursuant to the NASDAQ listing rules, the Company’s
Business Combination must be with a target business or businesses whose collective fair market value is equal to at least 80% of
the balance in the Trust Account at the time of the execution of a definitive agreement for such Business Combination. There is
no assurance that the Company will be able to successfully effect a Business Combination.
GP INVESTMENTS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2017
(Unaudited)
The Company will provide its shareholders with
the opportunity to redeem all or a portion of their shares included in the Units sold in the Initial Public Offering (the “Public
Shares”) upon the completion of a Business Combination either (i) in connection with a shareholder meeting called to approve
the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval
of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The per-share price
of the Public Shares to be redeemed (initially $10.00 per share), payable in cash, will be equal to the aggregate amount then on
deposit in the Trust Account as of two business days prior to the consummation of a Business Combination, including interest earned
on the funds held in the Trust Account and not previously released to the Company to pay its income tax obligations, divided by
the number of then outstanding Public Shares. The per-share amount to be distributed to shareholders who redeem their shares will
not be reduced by the deferred underwriting commissions the Company will pay to the underwriter (as discussed in Note 6). There
will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. However,
in no event will the Company redeem its Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001.
The Company’s initial shareholders have agreed to waive their redemption rights with respect to the founder shares (as defined
in Note 5) and Public Shares in connection with the completion of a Business Combination. If a shareholder vote is not required
by law and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant
to its Amended and Restated Memorandum and Articles of Association, conduct the redemptions pursuant to the tender offer rules
of the Securities and Exchange Commission (“SEC”), and file tender offer documents with the SEC prior to completing
a Business Combination.
If, however, a shareholder approval of the
transaction is required by law, or the Company decides to obtain shareholder approval for business or other legal reasons, the
Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the
tender offer rules. If the Company seeks shareholder approval, it will complete a Business Combination only if a majority of the
outstanding ordinary shares voted are voted in favor of the Business Combination. If the Company seeks shareholder approval in
connection with a Business Combination, the initial shareholders have agreed to vote their founder shares and any Public Shares
purchased during or after the Initial Public Offering in favor of a Business Combination. Additionally, each shareholder may elect
to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction.
If the Company seeks shareholder approval of
a Business Combination and it does not conduct redemptions in connection with a Business Combination pursuant to the tender offer
rules, the Company’s Amended and Restated Memorandum and Articles of Association provides that a public shareholder, together
with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group”
(as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted
from redeeming its shares with respect to more than an aggregate of 20% of the shares sold in the Initial Public Offering (“Excess
Shares”). However, the Company would not be restricting the shareholders’ ability to vote all of their shares (including
Excess Shares) for or against a Business Combination.
In connection with the Extension Amendment
approved by the Company’s shareholders on May 23, 2017, the Company has until November 27, 2017 to complete a Business Combination
(the “Combination Period”). If the Company is unable to complete a Business Combination within the Combination Period,
the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no
more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously
released to the Company to pay its income tax obligations (less up to $100,000 of interest to pay dissolution expenses), divided
by the number of then outstanding Public Shares, which redemption will completely extinguish public shareholders’ rights
as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii)
as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the Company’s
board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution of the Company, subject in each
case to its obligations to provide for claims of creditors and the requirements of the laws of the Cayman Islands and other applicable
law. There will be no redemption rights or liquidating distributions with respect to the Company’s Warrants, which will expire
worthless if the Company fails to complete a Business Combination within the Combination Period.
The initial shareholders have agreed to waive
their rights to liquidating distributions from the Trust Account with respect to the founder shares if the Company fails to complete
a Business Combination during the Combination Period. However, if the initial shareholders acquire Public Shares in or after the
Initial Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public
Shares if the Company fails to complete a Business Combination within the Combination Period. The underwriter has agreed to waive
its rights to the deferred underwriting commission held in the Trust Account in the event the Company does not complete a Business
Combination within the Combination Period and, in such event, such amounts will be included with the funds held in the Trust Account
that will be available to fund the redemption of the Company’s Public Shares. In the event of such distribution, it is possible
that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less
than the $10.00 per share initially held in the Trust Account. In order to protect the amounts held in the Trust Account, the Sponsor
has agreed to be liable to the Company if and to the extent any claims by a vendor for services rendered or products sold to the
Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the
amount of funds in the Trust Account. This liability will not apply with respect to any claims by a third party who executed a
waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or to any claims under
the Company’s indemnity of the underwriter of the Initial Public Offering against certain liabilities, including liabilities
under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver
is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such
third party claims.
GP INVESTMENTS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2017
(Unaudited)
The Company has principally financed its operations
from inception using proceeds from the sale of its equity securities to its initial shareholders and such amount of proceeds from
the Initial Public Offering that were placed in an account outside of the Trust Account for working capital purposes. As of June
30, 2017, the Company had $1,551 held outside of the Trust Account. Interest earned on the Trust Account balance through June 30,
2017 available to be released to the Company for the payment of income tax obligations amounted to approximately $1,006,000. As
of June 30, 2017, the Sponsor has committed to provide loans to the Company up to a total aggregate amount of $3,400,000, of which
$2,980,631 was outstanding as of June 30, 2017 (see Note 5). Based on the foregoing, the Company believes it will have sufficient
cash to meet its needs through the earlier of consummation of a Business Combination or the end of the Combination Period, the
date that the Company will be required to cease all operations except for the purpose of winding up, if a Business Combination
is not consummated.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of presentation
The accompanying unaudited condensed financial
statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”)
for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X of the
SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have
been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting.
Accordingly, they do not include all the information
and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion
of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring
nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods
presented.
The accompanying unaudited condensed financial
statements should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2016 as
filed with the SEC, which contains the audited financial statements and notes thereto. The financial information as of December
31, 2016 is derived from the audited financial statements presented in the Company's Annual Report on Form 10-K for the year ended
December 31, 2016. The interim results for the six months ended June 30, 2017 are not necessarily indicative of the results to
be expected for the year ending December 31, 2017 or for any future interim periods.
Emerging growth company
The Company is an “emerging growth company,”
as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, (the “JOBS
Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public
companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation
requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic
reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation
and shareholder approval of any golden parachute payments not previously approved.
Further, 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 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 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. This may make comparison of the Company’s financial statements with another public company
which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition
period difficult or impossible because of the potential differences in accounting standards used.
GP INVESTMENTS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2017
(Unaudited)
Use of estimates
The preparation of financial statements in
conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period.
Making estimates requires management to exercise
significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances
that existed at the date of the financial statements, which management considered in formulating its estimate, could change in
the near term due to one or more future events. Accordingly, the actual results could differ significantly from those estimates.
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. The Company did not have any cash equivalents
as of June 30, 2017 and December 31, 2016.
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 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 June 30, 2017, cash and marketable
securities held in the Trust Account consisted of $157,897,989 in United States Treasury Bills with a maturity date of 180 days
or less.
Ordinary shares subject to possible redemption
The Company accounts for its ordinary shares
subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480
“Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption (if any) are classified as
a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that
feature redemption rights that are either within the control of the holder or subject to redemption 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 feature certain redemption rights that are considered
to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at June 30, 2017
and December 31, 2016, the ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders’
equity section of the Company’s balance sheet.
Income taxes
The Company complies with the accounting and
reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial
accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the
financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on
enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation
allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC Topic 740 prescribes a recognition threshold
and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken
in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination
by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s only major tax
jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense.
As of June 30, 2017, there were no amounts accrued for interest and penalties. There were no unrecognized tax benefits as of June
30, 2017. The Company is currently not aware of any issues under review that could result in significant payments, accruals or
material deviation from its position over the next twelve months.
The Company may be subject to potential examination
by U.S. federal, U.S. states or foreign taxing authorities in the areas of income taxes. These potential examinations may include
questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with U.S. federal,
U.S. state and foreign tax laws.
The Company’s tax provision is zero because
the Company is organized in the Cayman Islands with no connection to any other taxable jurisdiction. As such, the Company has no
deferred tax assets. The Company is considered to be an exempted Cayman Islands Company and is presently not subject to income
taxes or income tax filing requirements in the Cayman Islands or the United States.
GP INVESTMENTS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2017
(Unaudited)
Net loss per share
The Company complies with accounting and disclosure
requirements of ASC Topic 260, “Earnings Per Share.” Net loss per share is computed by dividing net loss by the weighted
average number of ordinary shares outstanding during the period. Ordinary shares subject to possible redemption at June 30, 2017
and 2016 have been excluded from the calculation of basic loss per share since such shares, if redeemed, only participate in their
pro rata share of the Trust Account earnings. The Company has not considered the effect of warrants to purchase 14,687,500 ordinary
shares in the calculation of diluted loss per share, since the exercise of the warrants is contingent upon the occurrence of future
events. As a result, diluted loss per share is the same as basic loss per share for the periods presented.
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 June 30, 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 sheets, primarily due to their short-term nature.
Recent Accounting Pronouncements
Management does not believe that any recently
issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s
financial statements.
NOTE 3. INITIAL PUBLIC OFFERING
On May 26, 2015, the Company sold 15,000,000
Units at a purchase price of $10.00 per Unit. In addition, as a result of the underwriters election to exercise their entire over-allotment
option, the Company sold an additional 2,250,000 Units to the underwriters at a purchase price of $10.00 per Unit. Each Unit consists
of one ordinary share and one-half of one warrant (“Public Warrant”). Each whole Public Warrant entitles the holder
to purchase one ordinary share at a price of $11.50 per share (see Note 8).
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the Initial Public Offering,
the Sponsor purchased an aggregate of 6,062,500 Private Placement Warrants at a purchase price of $1.00 per warrant in a private
placement. Each Private Placement Warrant is exercisable to purchase one ordinary share at $11.50 per share. The proceeds from
the Private Placement Warrants were added to the net proceeds from the Initial Public Offering held in the Trust Account. If the
Company does not complete a Business Combination within the Combination Period, the proceeds of the sale of the Private Placement
Warrants will be used to fund the redemption of the Company’s Public Shares (subject to the requirements of applicable law)
and the Private Placement Warrants will expire worthless. There will be no redemption rights or liquidating distributions with
respect to the Private Placement Warrants.
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
On March 2, 2015, the Company issued 4,312,500
ordinary shares to GPIAC, LLC, a company whose sole member is the Sponsor (the “founder shares”), for an aggregate
purchase price of $25,000. The 4,312,500 founder shares included an aggregate of up to 562,500 shares subject to forfeiture by
the initial shareholders (or their permitted transferees) on a pro rata basis depending on the extent to which the underwriter’s
over-allotment was exercised. As a result of the underwriter’s election to exercise its full over-allotment option to purchase
2,250,000 Units on May 26, 2015 (see Note 6), 562,500 founder shares were no longer subject to forfeiture. The founder shares are
identical to the Public Shares included in the Units sold in the Initial Public Offering, except that (1) the founder shares are
subject to certain transfer restrictions and (2) the initial shareholders have agreed (i) to waive their redemption rights with
respect to the founder shares and Public Shares purchased during or after the Initial Public Offering in connection with the completion
of a Business Combination and (ii) to waive their rights to liquidating distributions from the Trust Account with respect to the
founder shares if the Company fails to complete a Business Combination within the Combination Period.
GP INVESTMENTS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2017
(Unaudited)
Administrative Services Fee
Commencing on May 19, 2015, the Company has
agreed to pay an affiliate of the Sponsor a monthly fee of $10,000 for general and administrative services. For the three months
ended June 30, 2017 and 2016, the Company incurred $30,000
of administrative service fees. For
the six months ended June 30, 2017 and 2016, the Company incurred $60,000
of administrative service
fees, of which $120,000 and
$60,000, respectively, is payable and included in accounts payable
and accrued expenses in the accompanying condensed balance sheet as of June 30, 2017 and December 31, 2016, respectively.
Related Party Advances
Through December 31, 2016, the Sponsor advanced
an aggregate of $635,681 in order to finance transaction costs in connection with the terminated Business Combination with WKI.
The advances were non-interest bearing, unsecured and payable only upon the completion of a Business Combination. As a result of
the amendment to the Sponsor’s commitment to provide loans to the Company of up to a total aggregate amount of $3,400,000
(see below), the outstanding advances of $635,681 were reclassified to related party promissory loans and are now included in the
outstanding amounts owed under such loans. Accordingly, as of June 30, 2017, there are no related party advances outstanding.
Related Party Loans
As of June 30, 2017, the Sponsor has
committed to provide loans to the Company up to an aggregate of $3,400,000 in order to finance transaction costs in
connection with a Business Combination. The loans are evidenced by a promissory note, are non-interest bearing, unsecured and
will only be repaid upon the completion of a Business Combination. As of June 30, 2017, $2,980,631 was outstanding under the
loans.
Other than as described above, the Sponsor
or an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to, loan the
Company additional funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination,
the Company would repay the Working Capital Loans out of the proceeds held in the Trust Account released to the Company. Otherwise,
the Working Capital Loans would be repaid only out of funds held outside the Trust Account.
In the event that a Business Combination does
not close, the Company may use a portion of the working capital held outside the Trust Account to repay the Working Capital Loans,
but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Up to $1,000,000 of Working Capital
Loans may be convertible into warrants of the post business combination entity at a price of $1.00 per warrant at the option of
the lender. Such warrants would be identical to the Private Placement Warrants. The terms of such Working Capital Loans, if any,
have not been determined and no written agreements exist with respect to the Working Capital Loans.
NOTE 6. COMMITMENTS AND CONTINGENCIES
Contingent Transaction Fee Arrangements
The Company has entered into fee arrangements
with certain service providers, advisors and the Sponsor pursuant to which certain fees incurred by the Company in connection with
a potential Business Combination will be deferred and become payable only if the Company consummates a Business Combination. If
a Business Combination does not occur, the Company will not be required to pay these contingent fees. As of June 30, 2017, the
amount of these contingent fees was approximately $3,993,000. To the extent a Business Combination is consummated, the Company
anticipates incurring a significant amount of additional costs. There can be no assurances that the Company will complete a Business
Combination.
Registration Rights
Pursuant to a registration rights agreement
entered into on May 19, 2015 with the holders of the founder shares, Private Placement Warrants and Warrants, the holders of the
majority of these securities are entitled to make up to three demands, excluding short form demands, that the Company register
such securities and shares that may be issued upon conversion of the Private Placement Warrants, Warrants and Working Capital Loans,
if any. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements
filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities
pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not permit
any registration statement filed under the Securities Act to become effective until termination of the applicable Lock-Up Period
(as defined in the registration rights agreement). The Company will bear the expenses incurred in connection with the filing of
any such registration statements.
Underwriting Agreement
The underwriters are entitled to an underwriting
discount of 6.0%, of which two and one-half percent (2.5%), or $4,312,500, was paid in cash at the closing of the Initial Public
Offering on May 26, 2015, and up to three and one-half percent (3.5%), or $6,037,500, has been deferred. The deferred fee will
be paid in cash upon the closing of a Business Combination from the amounts held in the Trust Account, subject to the terms of
the underwriting agreement.
GP INVESTMENTS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2017
(Unaudited)
NOTE 7. MERGER AGREEMENT
On May 16, 2017, the
Company, Let’s Go, Rimini Street and the Rimini Holder Representative entered into the Rimini Merger Agreement. Pursuant
to the Rimini Merger Agreement, among other things and in accordance with the terms and subject to the conditions of the Rimini
Merger Agreement, and following the domestication of the Company to Delaware, Let’s Go will merge with and into Rimini Street,
with Rimini Street surviving and becoming a wholly-owned subsidiary of the Company (the “first merger”). The surviving
corporation of the first merger will then merge with and into the Company, with the Company surviving the merger (the “second
merger” and, together with the first merger, the “Mergers”). The Company will be renamed Rimini Street, Inc.
immediately after consummation of the second merger (referred to, both upon the domestication of the Company to Delaware and subsequent
to such change of name, as “RMNI”).
Pursuant to the Rimini Merger Agreement, the
aggregate purchase price is $775,000,000, as adjusted in accordance with the terms of the Rimini Merger Agreement (the “Merger
Consideration”). At the closing of the business combination, the Company will pay the Merger Consideration in newly issued
shares of RMNI common stock based on a per share issue price of $10.00 per share.
In accordance with
the terms and subject to the conditions of the Rimini Merger Agreement, at the effective time of the first merger (the “first
effective time”), each issued and outstanding share of Rimini Street’s Class A Common Stock, Class B Common Stock,
Series A Preferred Stock on an as-converted basis, Series B Preferred Stock on an as-converted basis and Series C Preferred Stock
on an as-converted basis (other than, in each case, such shares, if any, (i) held in the treasury of Rimini Street, which treasury
shares shall be canceled as part of the Mergers and (ii) shares that are held by stockholders who have perfected and not withdrawn
a demand for appraisal rights) will automatically be cancelled and converted into and become the right to receive the applicable
portion of the Merger Consideration in accordance with the Rimini Merger Agreement.
Each option to purchase
shares of Rimini Street’s common stock granted under an incentive plan that is outstanding at the first effective time will
be converted into an option relating to shares of RMNI upon the same terms and conditions as are in effect with respect to such
option immediately prior to the first effective time (except that the number of shares of RMNI subject to each RMNI option, and
the exercise price thereof, shall be adjusted as set forth in the merger agreement to provide the holder thereof with the same
economic value as the original option relating to shares of Rimini Street’s common stock). Rimini Street will take commercially
reasonable actions so that any vested option held by a former employee or former service provider to Rimini Street is exercised
or cancelled prior to the first effective time and, to the extent not exercised or cancelled, such option will be converted into
the right to receive a cash payment equal to the product of (a) the excess of $10 over the per share exercise price and (b) the
number of shares of the Rimini Street’s common stock subject to the vested portion of such option.
The Company has entered
into a warrant consent and conversion agreement, dated May 16, 2017, with Rimini Street and CB Agent Services LLC (the “Origination
Agent”) pursuant to which each Origination Agent warrant will be converted into a warrant relating to shares of RMNI. All
other warrants to purchase shares of Rimini Street’s capital stock, which have an exercise price less than the value of Merger
Consideration per fully diluted share, will be converted into shares of the applicable class of Rimini Street capital stock immediately
prior to the first merger, in each case pursuant to a conversion agreement to be agreed with the holders of such warrants and the
parties to the Rimini Merger Agreement.
In accordance with
the terms and subject to the conditions of the Rimini Merger Agreement and subject to certain adjustments set forth therein, the
aggregate purchase price for the business combination and related transactions is $775 million, which amount will be (i) reduced
by, among other things set forth in the Rimini Merger Agreement, the amount of the indebtedness of Rimini Street existing on the
Closing Date (as defined in the Rimini Merger Agreement), and (ii) increased by, among other things set forth in the Rimini Merger
Agreement, the cash and cash equivalents held by or on behalf of Rimini Street existing on the Closing Date (as adjusted in accordance
with the terms of the Rimini Merger Agreement) and (iii) reduced by the unpaid transaction fees and expenses associated with the
Business Combination incurred by Rimini Street and its subsidiaries.
The Merger Consideration
is also subject to an indemnification escrow of 5,500,000 RMNI shares of common stock for a period of one year following the consummation
of the Business Combination. These escrow shares will be deducted from the RMNI shares issuable as Merger Consideration to certain
Rimini Street stockholders, to secure any indemnification claims by the Company under the Rimini Merger Agreement. Any RMNI shares
remaining in the indemnification escrow after twelve months following the consummation of the Business Combination (subject to
any outstanding claims) will be distributed to those Rimini Street stockholders from whom the shares were withheld.
GP INVESTMENTS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2017
(Unaudited)
The consummation of
the Business Combination is subject to, among other things, a closing condition requiring a minimum of $50,000,000 of available
cash, which is expected to be funded from cash available in the Company’s Trust Account (after satisfying any shareholder
redemptions, but including certain deferred underwriting commissions and other fees) and, as needed, backstop equity financing
from the Sponsor of up to $35,000,000 and other potential third party equity financing (the “GPIA available cash”).
Assuming such closing condition is satisfied (and the satisfaction or waiver of the other closing conditions described below),
the Company intends to use the GPIA available cash to fund unpaid transaction expenses incurred in connection with the Business
Combination and the other transactions contemplated by the Rimini Merger Agreement, to pay down certain of Rimini Street’s
indebtedness and to deposit any remaining GPIA available cash for the benefit of the combined company’s balance sheet.
On June 30, 2017,
the Company filed a registration statement on Form S-4 with the SEC containing a preliminary joint proxy statement/prospectus relating
to the Merger Agreement and the shareholder approvals required to be sought from the shareholders of the Company and Rimini Street.
Following effectiveness of such registration statement, the Company will mail to its shareholders the joint proxy statement/prospectus
forming part of such registration statement.
NOTE 8. SHAREHOLDERS’
EQUITY
Preferred
Shares
-
The Company is authorized to issue 20,000,000 preferred shares
with a par value of $0.0001 per share in one or more series. The Company’s board of directors will be authorized to fix the
voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any
qualifications, limitations and restrictions thereof, applicable to the shares of each series. At June 30, 2017, there are no preferred
shares designated, issued or outstanding.
Ordinary
Shares -
The Company is authorized to issue up to 400,000,000 ordinary shares, with a par value of $0.0001 per share. Holders
of the Company’s ordinary shares are entitled to one vote for each share. At June 30, 2017, there were
5,694,413
ordinary shares issued and outstanding (excluding
14,315,363
ordinary shares subject to possible
redemption).
Warrants -
Public Warrants may
only be exercised for a whole number of ordinary shares. No fractional shares will be issued upon exercise of the Public Warrants.
The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12
months from the closing of the Initial Public Offering; provided in each case that the Company has an effective registration statement
under the Securities Act covering the ordinary shares issuable upon exercise of the Public Warrants and a current prospectus relating
to them is available (or the Company permits holders to exercise their Public Warrants on a cashless basis and such cashless exercise
is exempt from registration under the Securities Act). The Public Warrants will expire five years after the completion of a Business
Combination or earlier upon redemption or liquidation.
The Private Placement Warrants are identical
to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and
the ordinary shares issuable upon exercise of the Private Placement Warrants will not be transferable, assignable or salable until
30 days after the completion of a Business Combination, subject to certain limited exceptions.
Additionally, the Private Placement Warrants
will be non-redeemable so long as they are held by the initial purchasers or such purchasers’ permitted transferees. If the
Private Placement Warrants are held by someone other than the initial purchasers or such purchasers’ permitted transferees,
the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public
Warrants.
The exercise price and number of ordinary shares
issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, or
recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of ordinary
shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants.
Accordingly, the warrants may expire worthless.
NOTE 9. FAIR VALUE MEASUREMENTS
The Company follows the guidance
in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and
non-financial assets and liabilities that are re-measured and reported at fair value at least annually.
GP INVESTMENTS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2017
(Unaudited)
The fair value of the Company’s
financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection
with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market
participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks
to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable
inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy
is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets
and liabilities:
|
Level 1:
|
Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
|
|
Level 2:
|
Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
|
|
Level 3:
|
Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.
|
The following table presents
information about the Company’s assets that are measured at fair value on a recurring basis at June 30, 2017 and December
31, 2016, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
Description
|
|
Level
|
|
|
June 30,
2017
|
|
|
December 31,
2016
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and marketable securities held in Trust Account
|
|
|
1
|
|
|
$
|
157,897,989
|
|
|
$
|
173,051,990
|
|
NOTE 10. SUBSEQUENT EVENTS
The Company evaluates subsequent
events and transactions that occur after the balance sheet date up to the date that the financial statements were issued for potential
recognition or disclosure. Based upon this review, the Company did not identify subsequent events that would have required adjustment
to or disclosure in the financial statements.