Jamba Juice 2007 Annual Report Download - page 64

Table of Contents


Common Stock Subject to Possible Redemption —With respect to the first business combination, which was approved and consummated, any
Public Stockholder who voted against the business combination could demand that the Company redeem his or her shares. The per share redemption price
equaled the amount in the Trust Fund as of the record date for determination of stockholders entitled to vote on the business combination divided by the
number of shares of common stock held by Public Stockholders at the consummation of the Offering. Accordingly, Public Stockholders holding 19.99% of
the aggregate number of shares owned by all Public Stockholders could seek redemption of their shares in the event of a business combination. Such Public
Stockholders were entitled to receive their per share interest in the Trust Fund computed without regard to the shares held by Initial Stockholders. Accordingly,
the Company had set up a liability on the balance sheet for the possible redemption of 3,448,275 shares of common stock in the amount of $25.2 million as
of January 10, 2006 and December 31, 2005. No Public Stockholders voted against the merger with Jamba Juice Company. Upon completion of the Merger,
the redemption right no longer existed, therefore, the liability for possible redemption was reclassified to additional paid-in capital in fiscal 2006.
Common Stock—In March 2005, the Board of Directors of the Company approved a stock dividend of 1.5714 shares of common stock for each
outstanding share of common stock to all stockholders of record on March 28, 2005. The sole purpose for such dividend was to maintain the existing
stockholders’ collective ownership at 20% of issued and outstanding shares immediately after the Company’s initial offering of 15.0 million units at $8.00 per
unit. Subsequent to the initial offering, the underwriters exercised their over-allotment option of 2.25 million units effectively lowering the founder’s ownership
to approximately 17.68%. All transactions and disclosures in the consolidated financial statements, related to the Company’s common stock, have been
adjusted to reflect the results of the stock dividend.
Earnings Per Share—Earnings per share is computed in accordance with SFAS No. 128,  Basic net income per share is
computed based on the weighted-average of common shares outstanding during the period. Diluted net income per share is computed based on the weighted-
average number of common shares and potentially dilutive securities, which includes options outstanding and restricted stock awards granted under the
Company’s stock option plans. Anti-dilutive shares of 22 million, 1.5 million, and 1.5 million have been excluded from diluted weighted-average shares
outstanding in fiscal 2006, the 10-day transition period ended January 10, 2006 and fiscal 2005, respectively.
The number of incremental shares from the assumed exercise of warrants was calculated by applying the treasury stock method. The following table
summarizes the differences between the basic and diluted weighted-average shares outstanding used to computed diluted net income (loss) per share:






Basic weighted-average shares outstanding 24,478,384 21,000,000 11,777,489
Incremental shares from assumed exercise of warrants — 2,703,268 1,272,220
Diluted weighted-average shares outstanding 24,478,384 23,703,268 13,049,709
Preferred Stock—The Company is authorized to issue 1,000,000 shares of preferred stock with such designations, voting, and other rights and
preferences, as may be determined from time to time by the Board of Directors.
Stock-Based Compensation—Stock options for a fixed number of shares are granted to certain employees and directors with an exercise price based
on an average of the closing price of the Company’s common stock for
64