UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
|X| Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the quarterly period ended September 30, 2005
|_| Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from _____________ to _____________
Commission File Number 000-50682
Tremisis Energy Acquisition Corporation
---------------------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 20-0700684
-------- ----------
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1775 Broadway, Suite 604, New York, New York 10019
--------------------------------------------------
(Address of Principal Executive Office)
(212) 397-1464
--------------
(Issuer's Telephone Number, Including Area Code)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes |X| No
|_|
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes |X| No |_|
As of November 14, 2005, 7,700,000 shares of common stock, par value
$.0001 per share, were issued and outstanding.
Transitional Small Business Disclosure Format (check one): Yes |_| No |X|
Page
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Page
Part I: Financial Information:
Item I - Financial Statements (Unaudited):
Balance Sheets 3
Statements of Operations 4
Statements of Stockholders' Equity 5
Statements of Cash Flows 6
Summary of Significant Accounting Policies 7
Notes to Financial Statements 8-11
Item 2 - Management's Discussion and Analysis or Plan of Operation 12
Item 3 - Controls and Procedures 14
Part II. Other Information
Item 2 - Unregistered Sales of Equity Securities
and Use of Proceeds 15
Item 6 - Exhibits 15
Signatures 16
2
Tremisis Energy Acquisition Corporation
(a corporation in the development stage)
Balance Sheets (Unaudited)
--------------------------------------------------------------------------------
September 30, December 31,
2005 2004
---------------------------------------------------------------------------------------------------------------------------------
ASSETS
Current assets:
Cash $ 499,413 $ 834,094
U.S. Government Securities held in Trust Fund (Note 2) 34,059,992 33,351,358
Accrued interest receivable, Trust Fund (Note 2) 57,699 91,170
Prepaid expenses 10,771 22,125
----------- -----------
Total current assets 34,627,875 34,298,747
----------- -----------
Deferred acquisition costs (Note 4) 85,063 --
Furniture and equipment (net accumulated
depreciation of $4,044 and $1,418) 9,829 6,558
---------------------------------------------------------------------------------------------------------------------------------
Total assets $34,722,767 $34,305,305
=================================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accrued expenses $ 122,490 $ 26,680
Taxes payable 130,637 26,000
----------- -----------
Total current liabilities 253,127 52,680
---------------------------------------------------------------------------------------------------------------------------------
Common stock, subject to possible conversion
1,264,368 shares at conversion value (Note 2) 6,820,129 6,685,164
Commitment (Note 4)
Stockholders' equity (Notes 2, 3, 4, 6 and 7)
Preferred stock, $.0001 par value,
authorized 1,000,000 shares; none issued -- --
Common stock, $.0001 par value
Authorized 30,000,000 shares; Issued and
outstanding 7,700,000 shares (which
includes 1,264,368 subject to possible
conversion) 770 770
Additional paid-in capital 27,367,201 27,502,166
Earnings accumulated during the development stage 281,540 64,525
---------------------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 27,649,511 27,567,461
---------------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $34,722,767 $34,305,305
=================================================================================================================================
See Summary of Significant Accounting Policies and
Notes to Unaudited Financial Statements.
3
Tremisis Energy Acquisition Corporation
(a corporation in the development stage)
Statements of Operations (Unaudited)
--------------------------------------------------------------------------------
For the Three For the Three For the Nine For the Period For the Period
Months Ended Months Ended Months Ended from February 5, from February 5,
September 30, September 30, September 30, 2004 (inception) 2004 (inception)
2005 2004 2005 to September 30, to September 30,
2004 2005
------------------------------------------------------------------------------------------------------------------------------------
Expenses:
General and administrative
expense (Note 5) $ 54,758 $ 40,657 $ 266,881 $ 102,674 $ 431,273
----------- ----------- ----------- ----------- -----------
Operating loss (54,758) (40,657) (266,881) (102,674) (431,1273)
Interest Income 275,237 110,576 682,446 163,242 990,478
----------- ----------- ----------- ----------- -----------
Income before provision for taxes 220,479 69,919 415,565 60,568 559,205
Provision for taxes (Note 8) (91,400) (21,200) (198,550) (21,200) (277,665)
----------- ----------- ----------- ----------- -----------
Net income $ 129,079 $ 48,719 $ 217,015 $ 39,368 $ 281,540
----------- ----------- ----------- ----------- -----------
Accretion of Trust Fund relating to
common stock subject to possible
conversion 54,631 21,424 134,965 31,574 194,841
----------- ----------- ----------- ----------- -----------
Net income attributable to
common stockholders $ 74,448 $ 27,295 $ 82,050 $ 7,794 $ 86,699
----------- ----------- ----------- ----------- -----------
Basic and diluted income per share $ 0.01 $ 0.00 $ 0.01 $ 0.00
====================================================================================================================================
Weighted average common shares
outstanding 7,700,000 7,700,000 7,700,000 4,977,848
====================================================================================================================================
See Summary of Significant Accounting Policies and
Notes to Unaudited Financial Statements
4
Tremisis Energy Acquisition Corporation
(a corporation in the development stage)
Statements of Stockholders' Equity (Unaudited)
--------------------------------------------------------------------------------
Earnings
Accumulated
Common Stock Addition During the
---------------------------- paid-in Development
Shares Amount capital Stage Total
-----------------------------------------------------------------------------
Balance, February 5, 2004 (inception) -- $ -- $ -- $ -- $ --
Issuance of common stock to initial
stockholders 1,375,000 137 24,863 -- 25,000
Sale of 6,325,000 units and
underwriters' option, net of
underwriters' discount and
offering expenses (includes
1,264,368 shares subject to
possible conversion) 6,325,000 633 27,537,178 -- 27,537,811
Accretion of Trust Fund relating
to common stock subject to
possible conversion (59,875) -- (59,875)
Net income for the period -- -- -- 64,525 64,525
-----------------------------------------------------------------------------
Balance, December 31, 2004 7,700,000 $ 770 $ 27,502,166 $ 64,525 $ 27,567,461
Accretion of Trust Fund relating
to common stock subject to
possible conversion (unaudited) -- -- (134,965) -- (134,965)
Net income for the nine month
period (unaudited) -- -- -- 217,015 217,015
-----------------------------------------------------------------------------
Balance, September 30, 2005 (unaudited) 7,700,000 $ 770 $ 27,367,201 $ 281,540 $ 27,649,511
============ ============ ============ ============ ============
====================================================================================================================================
See Summary of Significant Accounting Policies and
Notes to Unaudited Financial Statements.
5
Tremisis Energy Acquisition Corporation
(a corporation in the development stage)
Statements of Cash Flows (Unaudited)
--------------------------------------------------------------------------------
For the Period from For the Period from
For the Nine February 5, 2004 February 5, 2004
Months Ended (inception) to (inception) to
September 30, 2005 September 30, 2004 September 30, 2005
------------------------------------------------------------------------------------------------------------------------------------
Cash flows from operating activities
Net income for the period $ 217,015 $ 39,368 $ 281,540
Adjustments to reconcile net income
to net cash used in operating activities:
Depreciation 2,626 811 4,044
Gain on maturity of U.S. Government
securities held in Trust Fund (708,476) -- (918,117)
Change in operating assets and liabilities:
Decrease (increase) in prepaid
expenses 11,354 (36,875) (10,771)
(Increase) decrease in accrued
interest receivable 33,471 (157,953) (57,699)
Increase in accrued expenses 10,747 9,096 37,427
Increase in income tax payable 104,637 21,200 130,637
------------- ------------- -------------
Net cash used in operating activities (328,626) (124,353) (532,939)
------------- ------------- -------------
Cash flows from investing activities
Purchase of U.S. Government Securities
held in Trust Fund (202,846,158) (33,143,000) (269,338,875)
Maturity of U.S. Government Securities
held in Trust Fund 202,846,000 -- 236,197,000
Purchase of furniture and equipment (5,897) (7,976) (13,873)
------------- ------------- -------------
Net cash used in investing activities (6,055) (33,150,976) (33,155,748)
------------- ------------- -------------
Cash flows from financing activities
Proceeds from public offering of 6,325,000
units and underwriter option, net -- 34,163,000 34,163,100
Proceeds from issuance of common stock to
initial stockholders -- 25,000 25,000
Proceeds from note payable, stockholder -- 77,500 77,500
Repayment of note payable, stockholder -- (77,500) (77,500)
------------- ------------- -------------
Net cash provided by financing activities -- 34,188,000 34,188,100
------------- ------------- -------------
Net (decrease) increase in cash (334,681) 912,671 499,413
Cash at beginning of period 834,094 -- --
------------- ------------- -------------
Cash at end of period $ 499,413 $ 912,671 $ 499,413
------------- ------------- -------------
Supplemental disclosure of cash flow information:
Cash paid during the period for income taxes $ 93,913 $ -- $ 147,028
Supplemental disclosure of non cash activity:
Accrued deferred acquisition costs $ 85,063 $ -- $ 85,063
Accretion of Trust Fund relating to common
stock subject to possible conversion $ 134,965 $ 31,574 $ 194,841
------------------------------------------------------------------------------------------------------------------------------------
See Summary of Significant Accounting Policies and
Notes to Unaudited Financial Statements.
6
Tremisis Energy Acquisition Corporation
(a corporation in the development stage)
Summary of Significant Accounting Policies
--------------------------------------------------------------------------------
Income taxes The Company follows Statement of Financial Accounting
Standards No. 109 ("SFAS No. 109"), "Accounting for
Income Taxes" which is an asset and liability approach
that requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of
events that have been recognized in the Company's
financial statements or tax returns.
Net income Net income per share is computed on the basis of the
per share weighted average number of common shares outstanding
during the period, including common stock equivalents
(unless anti-dilutive) which would arise from the
exercise of stock warrants.
Use of estimates The preparation of financial statements in conformity
with accounting principles generally accepted in the
United States of America requires management to make
estimates and assumptions that affect the report amounts
of assets and liabilities at the date of the financial
statements and the reported amounts of expenses during
the reporting period. Actual results could differ from
those estimates.
Reclassifications Certain items have been reclassified from prior periods
to conform with current period presentation.
7
Tremisis Energy Acquisition Corporation
(a corporation in the development stage)
Notes to Unaudited Financial Statements
--------------------------------------------------------------------------------
1. Basis of Presentation The accompanying financial statements are
unaudited and have been prepared in accordance
with accounting principles generally accepted in
the United States of America for interim financial
information and with instructions to Form 10-QSB.
Accordingly, certain information and footnote
disclosures normally included in financial
statements prepared in accordance with accounting
principles generally accepted in the United States
of America have been omitted pursuant to such
rules and regulations. These financial statements
should be read in conjunction with the financial
statements that were included in the Company's
Annual Report on Form 10-KSB for the period ended
December 31, 2004.
In the opinion of management, all adjustments
(consisting of normal accruals) have been made
that are necessary to present fairly the financial
position of Tremisis Energy Acquisition
Corporation (the "Company"). Operating results for
the interim period presented are not necessarily
indicative of the results to be expected for a
full year.
2. Organization and The Company was incorporated in February 5, 2004
Business Operations as a blank check company whose objective is to
acquire an operating business in either the energy
or the environmental industry and their related
infrastructures.
The registration statement for the Company's
initial public offering ("Offering") was declared
effective May 13, 2004. The Company consummated
the offering on May 18, 2004 and received net
proceeds of approximately $34,163,100 (Note 3).
The Company's management has broad discretion with
respect to the specific application of the net
proceeds of this Offering, although substantially
all of the net proceeds of this Offering are
intended to be generally applied toward
consummating a business combination with an
operating business in the energy and environmental
industry and their related infrastructures
("Business Combination"). An amount of $34,117,691
and $33,442,528 (which includes accrued interest
of $57,699 and $91,170) as of September 30, 2005
and December 31, 2004, respectively, is being held
in an interest-bearing trust account ("Trust
Fund") until the earlier of (i) the consummation
of its first Business Combination or (ii)
liquidation of the Company. Under the agreement
governing the Trust Fund, funds will only be
invested in United States government securities
(Treasury Bills) with a maturity of 180 days or
less. The remaining net proceeds may be used to
pay for business, legal and accounting due
diligence on prospective acquisitions and
continuing general and administrative expenses.
8
Tremisis Energy Acquisition Corporation
(a corporation in the development stage)
Notes to Unaudited Financial Statements
--------------------------------------------------------------------------------
The Company has signed a definitive agreement for
the acquisition of a target business (See Note 4)
and will submit such transaction for stockholder
approval. In the event that stockholders owning
20% or more of the shares sold in the Offering,
vote against the Business Combination and exercise
the conversion rights described below, the
Business Combination will not be consummated. All
of the Company's stockholders prior to the
Offering, including all of the officers and
directors of the Company ("Initial Stockholders"),
have agreed to vote their 1,375,000 founding
shares of common stock in accordance with the vote
of the majority in interest of all other
stockholders of the Company ("Public
Stockholders") with respect to the Business
Combination. After consummation of the Business
Combination, all of these voting safeguards will
no longer be applicable.
With respect to a Business Combination which is
approved and consummated, any Public Stockholder
who voted against the Business Combination may
demand that the Company convert his or her shares.
The per share conversion price will equal 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 may seek conversion of their shares
in the event of a Business Combination. Such
Public Stockholders are entitled to receive their
per share interest in the Trust Fund computed
without regard to the shares held by Initial
Stockholders. In this respect, $6,820,129 and
$6,685,164 (which includes accretion of Trust
Fund) has been classified as common stock subject
to possible conversion at September 30, 2005 and
December 31, 2004, respectively.
The Company's Certificate of Incorporation
provides for mandatory liquidation of the Company
in the event that the Company does not consummate
a Business Combination within 18 months from the
date of the consummation of the Offering (such
date would be November 18, 2005), or 24 months
from the consummation of the Offering (such date
would be May 18, 2006) if certain extension
criteria have been satisfied. In the event of
liquidation, it is likely that the per share value
of the residual assets remaining available for
distribution (including Trust Fund assets) will be
less than the initial public offering price per
share in the Offering (assuming no value is
attributed to the Warrants contained in the Units
sold in the Offering discussed in Note 3). The
Company has satisfied the extension criteria by
entering into an Agreement and Plan of merger with
Ram Energy, Inc as described in
9
Tremisis Energy Acquisition Corporation
(a corporation in the development stage)
Notes to Unaudited Financial Statements
--------------------------------------------------------------------------------
Note 4.
3. Offering On May 18, 2004, the Company sold 6,325,000 units
("Units") in the Offering including an additional
825,000 Units pursuant to the underwriters'
over-allotment option. Each Unit consists of one
share of the Company's common stock, $.0001 par
value, and two Redeemable Common Stock Purchase
Warrants ("Warrants"). Each Warrant will entitle
the holder to purchase from the Company one share
of common stock at an exercise price of $5.00
commencing the later of the completion of a
Business Combination with a target business or one
year from the effective date of the Offering and
expiring five years from the date of the
prospectus. The Warrants will be redeemable at a
price of $.01 per Warrant upon 30 days' notice
after the Warrants become exercisable, only in the
event that the last sale price of the common stock
is at least $8.50 per share for any 20 trading
days within a 30 trading day period ending on the
third day prior to the date on which notice of
redemption is given. In connection with this
Offering, the Company issued, for $100, an option
to the representative of the underwriters to
purchase 275,000 Units at an exercise price of
$9.90 per Unit. In addition, the warrants
underlying such Units are exercisable at $6.25 per
share.
4. Business Combination On October 20, 2005, the Company entered into an
and Deferred Agreement and Plan of Merger ("Merger Agreement")
Acquisition Costs with RAM Energy, Inc. and all of its stockholders
("Stockholders"), which was amended on November
11, 2005. The Company formed a wholly owned
subsidiary on October 5, 2005 to effectuate the
transactions contemplated by the Merger Agreement
with RAM Energy, Inc. ("Merger"). RAM Energy, Inc.
will be the surviving corporation in the Merger,
becoming a wholly owned subsidiary of Tremisis.
RAM is a privately-owned, independent, oil and gas
company headquartered in Tulsa, Oklahoma. RAM's
business strategy is to acquire, explore, develop,
exploit, produce and manage oil and gas
properties, primarily in Texas, Louisiana and
Oklahoma. RAM has been active in these core areas
since its inception in 1987. RAM's management team
has extensive technical and operating expertise in
all areas of RAM's operations and geographic
focus.
Pursuant to the Merger Agreement, the
Stockholders, in exchange for all of the
securities of RAM outstanding immediately prior to
the Merger, will receive from the Company $30
million in cash and a number of shares of the
Company's common stock equal to the greater of (x)
$160,000,000 divided by 115% of the average
closing price of a share of the Company's common
stock for the ten trading days immediately prior
to the consummation of the Merger and (y)
25,600,000. A portion of the shares of the
Company's common stock
10
Tremisis Energy Acquisition Corporation
(a corporation in the development stage)
Notes to Unaudited Financial Statements
--------------------------------------------------------------------------------
being issued to the Stockholders in the Merger
will be placed into escrow to secure the indemnity
rights of the Company under the Merger Agreement
and will be governed by the terms of an Escrow
Agreement.
In connection with this business combination, the
Company incurred $85,063 in Deferred Acquisition
costs as of September 30, 2005.
5. Commitment The Company presently occupies office space
provided by and affiliate of an initial
stockholder. Such affiliate has agreed that, until
the acquisition of a target business by the
Company, it will make such office space, as well
as certain office and secretarial services
available to the Company, as may be required by
the Company from time to time. The Company pays
such affiliate $3,500 per month for such services
commencing on May 18, 2004, the effective date of
the Offering. Included in general and
administrative such services are $10,500 for each
of the three month periods ended September 30,
2005 and 2004 respectively, $31,500 and $17,500
for the nine month periods ended September 30,
2005 an 2004, respectively and $59,500 for the
period from February 5, 2004 (inception) to
September 30, 2005.
6. 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.
7. Common Stock The Company's Board of Directors authorized a
1.666666 to one forward stock split of its common
stock on March 10, 2004, a 1.1428571 to one
forward stock split of its common stock on April
16, 2004 and a 1.375 to one forward stock split of
its common stock on April 23, 2004. All references
in the accompanying financial statements to the
numbers of shares have been retroactively restated
to reflect the transaction.
As of September 30, 2005, 13,475,000 shares of
common stock were reserved for issuance upon
exercise of redeemable warrants and underwriters'
unit purchase option.
11
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion should be read in conjunction with the Company's
Consolidated Financial Statements and footnotes thereto contained in this
report.
Forward Looking Statements
The statements discussed in this Report include forward looking statements
that involve risks and uncertainties detailed from time to time in the Company's
reports filed with the Securities and Exchange Commission.
Plan of Operations
We were formed on February 5, 2004 to serve as a vehicle to effect a
merger, capital stock exchange, asset acquisition or other similar business
combination with a company in the either of the energy or environmental
industries and their related infrastructures. We intend to utilize cash derived
from the proceeds of our recently completed public offering, our capital stock,
debt or a combination of cash, capital stock and debt, in effecting a business
combination.
Net income for the three months ended September 30, 2005 consisted of
interest income of $275,237 reduced by $10,500 for a monthly administrative
services agreement, $11,466 for professional fees, $14,544 for officer liability
insurance, $3,319 for travel, meals and entertainment expenses, $7,993 for
franchise fees, $91,400 for taxes and $6,936 for other expenses.
Net income for the three months ended September 30, 2004 consisted of
interest income of $110,576 reduced by $10,500 for a monthly administrative
services agreement, $5,183 for professional fees, $14,750 for officer liability
insurance, $1,729 for travel, meals and entertainment expenses, $21,200 for
taxes and $8,495 for other expenses.
Net income for the nine months ended September 30, 2005 consisted of
interest income of $682,446 reduced by $31,500 for a monthly administrative
services agreement, $73,498 for professional fees, $43,941 for officer liability
insurance, $69,707 for travel, meals and entertainment expenses, $23,275 for
franchise fees, $198,550 for taxes and $24,960 for other expenses.
Net income for the period from February 5, 2004 (inception) to September
30, 2004 consisted of interest income of $163,242 reduced by $17,500 for a
monthly administrative services agreement, $7,443 for professional fees, $22,125
for officer liability insurance, $4,518 for travel, meals and entertainment
expenses, $21,200 for taxes and $51,088 for other expenses.
Net income for the period from February 5, 2004 (inception) to September
30, 2005 consisted of interest income of $990,478 reduced by $59,500 for a
monthly administrative services agreement, $92,983 for professional fees,
$80,816 for officer liability insurance, $75,135 for travel, meals and
entertainment expenses, $46,275 for franchise fees, $277,665 for taxes and
$76,564 for other expenses.
We consummated our initial public offering on May 18, 2004. Gross proceeds
from our initial public offering, including the full exercise of the
underwriters' over-allotment option, were $37,950,100. After deducting offering
expenses of $1,510,000 including $990,000 evidencing the underwriters'
non-accountable expense allowance of 3% of the gross proceeds, and underwriting
discounts of $2,277,000, net proceeds were $34,163,100. An amount of $34,117,691
(which includes accrued interest of $57,699) is currently held in trust and the
remaining proceeds are available to be used to provide for business, legal and
accounting due diligence on prospective acquisitions and continuing general and
administrative expenses.
12
We will use substantially all of the net proceeds of this offering to
acquire a target business, including identifying and evaluating prospective
acquisition candidates, selecting the target business, and structuring,
negotiating and consummating the business combination. To the extent that our
capital stock is used in whole or in part as consideration to effect a business
combination, the proceeds held in the trust fund as well as any other net
proceeds not expended will be used to finance the operations of the target
business. We believe that we have sufficient available funds outside of the
trust fund to operate through May 18, 2006, assuming that a business combination
is not consummated during that time. Over this time period, we anticipate
approximately $180,000 of expenses for legal, accounting and other expenses
related to the due diligence investigations, structuring and negotiating of a
business combination, $84,000 for the administrative fee payable to First
Americas Management LLC ($3,500 per month for two years), $50,000 of expenses
for the due diligence and investigation of a target business, $40,000 of
expenses in legal and accounting fees relating to our SEC reporting obligations
and $666,000 for general working capital that will be used for miscellaneous
expenses and reserves, including approximately $60,000 for director and officer
liability insurance premiums. We do not believe we will need to raise additional
funds following this offering in order to meet the expenditures required for
operating our business. However, we may need to raise additional funds through a
private offering of debt or equity securities if such funds are required to
consummate a business combination that is presented to us. We would only
consummate such a fund raising simultaneously with the consummation of a
business combination.
On October 20, 2005, the Company entered into an Agreement and Plan of
Merger ("Merger Agreement") with RAM Energy, Inc. and all of its stockholders
("Stockholders"), which was amended on November 11, 2005. A wholly owned
subsidiary of the Company formed to effectuate the transactions contemplated by
the Merger Agreement by merging with and into RAM Energy, Inc. ("Merger"), is
also a party to the Merger Agreement. RAM Energy, Inc. will be the surviving
corporation in the Merger, becoming a wholly owned subsidiary of Tremisis. RAM
is a privately-owned, independent, oil and gas company headquartered in Tulsa,
Oklahoma. RAM's business strategy is to acquire, explore, develop, exploit,
produce and manage oil and gas properties, primarily in Texas, Louisiana and
Oklahoma. RAM has been active in these core areas since its inception in 1987.
RAM's management team has extensive technical and operating expertise in all
areas of RAM's operations and geographic focus.
Pursuant to the Merger Agreement, the Stockholders, in exchange for all of
the securities of RAM outstanding immediately prior to the Merger, will receive
from the Company $30 million in cash and a number of shares of the Company's
common stock equal to the greater of (x) $160,000,000 divided by 115% of the
average closing price of a share of the Company's common stock for the ten
trading days immediately prior to the consummation of the Merger and (y)
25,600,000. A portion of the shares of the Company's common stock being issued
to the Stockholders in the Merger will be placed into escrow to secure the
indemnity rights of the Company under the Merger Agreement and will be governed
by the terms of an Escrow Agreement.
For a more complete discussion of our proposed business combination, see
our Current Report on Form 8-K dated October 20, 2005 and filed with the SEC on
October 26, 2005.
In connection with this business combination, the Company incurred $85,063
in Deferred Acquisition costs as of September 30, 2005.
We are obligated to pay to First Americas Management LLC, an affiliate of
Isaac Kier, our secretary, treasurer and a member of our board of directors, a
monthly fee of $3,500 for general and administrative services. Through September
30, 2005, an aggregate of $59,500 has been paid for such services. In addition,
in February and April 2004, Lawrence S. Coben advanced an aggregate of $77,500
to us, on a non-interest bearing basis, for payment of offering expenses on our
behalf. This amount was repaid
13
in May 2004 out of proceeds of our initial public offering.
ITEM 3. CONTROLS AND PROCEDURES.
An evaluation of the effectiveness of our disclosure controls and
procedures as of September 30, 2005 was made under the supervision and with the
participation of our management, including chief executive officer and
treasurer. Based on that evaluation, he concluded that our disclosure controls
and procedures are effective as of the end of the period covered by this report
to ensure that information required to be disclosed by us in reports that we
file or submit under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in Securities and
Exchange Commission rules and forms. During the most recently completed fiscal
quarter, there has been no significant change in our internal control over
financial reporting that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.
14
PART II.
OTHER INFORMATION
ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On May 18, 2004, we closed our initial public offering of 6,325,000 Units,
including 825,000 Units issued upon exercise of the underwriters' over-allotment
option, with each unit consisting of one share of our common stock and two
warrants, each to purchase one share of our common stock at an exercise price of
$5.00 per share. The Units were sold at an offering price of $6.00 per Unit,
generating gross proceeds of 37,950,100. The representative of the underwriters
in the offering was EarlyBirdCapital, Inc. The securities sold in the offering
were registered under the Securities Act of 1933 on a registration statement on
Form S-1 (No. 333-113583). The Securities and Exchange Commission declared the
registration statement effective on May 12, 2004.
We paid a total of $2,277,000 in underwriting discounts and commissions,
and $1,510,000 for costs and expenses related to the offering, including
$990,000 for the underwriters' non-accountable expense allowance of 3% of the
gross proceeds.
After deducting the underwriting discounts and commissions and the
offering expenses, the total net proceeds to us from the offering were
$34,163,100, of which $33,143,000 was deposited into a trust fund and the
remaining proceeds are to be used to provide for business, legal and accounting
due diligence on prospective business combinations and continuing general and
administrative expenses. Through September 30, 2005, we have used approximately
$448,000 of cash for operating expenses and $77,500 to repay advances made to us
by one of our initial stockholders.
ITEM 6: EXHIBITS
(a) Exhibits:
31.1 - Section 302 Certification by CEO
31.2 - Section 302 Certification by Treasurer
32.1 - Section 906 Certification by CEO
32.2 - Section 906 Certification by Treasurer
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
TREMISIS ENERGY
ACQUISITION CORPORATION
Dated: November 14, 2005
/s/ Lawrence S. Coben
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Lawrence S. Coben
Chairman of the Board and
Chief Executive Officer
/s/ Isaac Kier
--------------
Isaac Kier
Treasurer
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