Jamba Juice 2006 Annual Report Download - page 6

or a combination of these in effecting a business combination — the acquisition by us, whether by merger, share exchange, asset or stock acquisition or other
similar type of transaction or a combination of the foregoing, of an unidentified operating business (a “target business”). Although substantially all of the net
proceeds of our initial public offering are intended to be generally applied toward effecting a business combination as described in this report, the proceeds
have not otherwise been designated for any more specific purposes. A business combination may involve the acquisition of, or merger with, a company which
does not need substantial additional capital but which desires to establish a public trading market for its shares, while avoiding what it may deem to be
adverse consequences to undertaking a public offering itself. While we may seek to effect business combinations with more than one target business, we will
probably have the ability, as a result of our limited resources, to effect only a single business combination.
We have not identified a target business or target industry
We have conducted discussions with target businesses regarding potential business combinations. Subject to the limitations that a target business has
a fair market value of at least 80% of our net assets at the time of the acquisition, as described below in more detail, we will have virtually unrestricted
flexibility in identifying and selecting a prospective acquisition candidate. Accordingly, there is no basis for investors to evaluate the possible merits or risks of
the target business with which we may ultimately complete a business combination. We expect to seek service businesses that have recurring revenue and/or
stable cash flow, although neither criteria is a prerequisite for any target business we ultimately pursue. To the extent we effect a business combination with a
financially unstable company or an entity in its early stage of development or growth, including entities without established records of sales or earnings, we
may be affected by numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies.
Although our management will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or
assess all significant risk factors.
Sources of target businesses
Target business candidates have and will be brought to our attention from various unaffiliated sources, including investment bankers, venture
capital funds, private equity funds, leveraged buyout funds, management buyout funds and other members of the financial community who are aware that we
are seeking a business combination partner. Our officers and directors as well as their affiliates have also brought to our attention potential target business
candidates. We have entered into four agreements with finders that would compensate such finder in the event such finder was the source of a business
combination partner that was ultimately approved by our shareholders; the Company is not liable for any fees or expenses to any such finders unless a
business combination is consummated, and then the company is only liable to the finder that introduced us to such deal. While we may pay fees or
compensation to third parties for their efforts in introducing us to potential target business, in no event, however, will we pay any of our existing officers,
directors or stockholders or any entity with which they are affiliated any finder’s fee or other compensation for services rendered to us prior to or in connection
with the consummation of a business combination. In addition, none of our officers, directors, special advisors or initial stockholders will receive any finder’s
fee, consulting fees or any similar fees from any person or entity in connection with any business combination involving us other than any compensation or
fees that may be received for any services provided following such business combination.
Selection of a target business and structuring of a business combination
Subject to the requirement that our initial business combination must be with a target business with a fair market value that is at least 80% of our net
assets at the time of such acquisition, our management will have virtually unrestricted flexibility in identifying and selecting a prospective target business. In
evaluating a prospective target business, our management will consider, among other factors, the following:
• financial condition and results of operation;
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• growth potential;
• experience and skill of management and availability of additional personnel;
• capital requirements;
• competitive position;
• barriers to entry into other industries;
• stage of development of the products, processes or services;
• degree of current or potential market acceptance of the products, processes or services;
• proprietary features and degree of intellectual property or other protection of the products, processes or services;
• regulatory environment of the industry; and
• costs associated with effecting the business combination.
These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular business combination will be based, to the extent