SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

This summary highlights selected information from this proxy statement/prospectus and does not contain all of the information that is important to you. To better understand the proposals to be submitted for a vote at the special meeting, including the mergers, you should read this entire document carefully, including the merger agreement attached as Annex A to this proxy statement/prospectus. The merger agreement is the legal document that governs the mergers and the other transactions that will be undertaken in connection with the mergers. It is also described in detail in this proxy statement/prospectus in the section entitled “The Merger Agreement.”

The Parties

Cambridge

Cambridge is a blank check company formed in order to effect a merger, capital stock exchange, asset acquisition or other similar business combination with one or more businesses or entities. Cambridge was incorporated under the laws of Delaware on October 1, 2013.

On December 23, 2013, Cambridge closed its initial public offering of 7,000,000 units, with each unit consisting of one share of its common stock and one warrant to acquire one share of its common stock upon consummation of an initial business combination. On December 30, 2013, Cambridge consummated the sale of an additional 1,050,000 units which were subject to an over-allotment option granted to the underwriters of its initial public offering. The units from the initial public offering (including the over-allotment option) were sold at an offering price of $10.00 per unit, generating total gross proceeds of $80,500,000. Simultaneously with the consummation of the initial public offering and the exercise of the underwriters’ over-allotment option, Cambridge consummated the private sale of 472,125 units to its initial stockholders and EarlyBirdCapital and its designees, in each case at $10.00 per unit for an aggregate purchase price of $4,721,250. The net proceeds from the initial public offering, together with the net proceeds from the private sale of units totaled $82,097,475. Of that, a total of $81,305,000 was deposited into the trust account and the remaining proceeds became available to be used as working capital to provide for business, legal and accounting due diligence on prospective business combinations and continuing general and administrative expenses. The initial public offering was conducted pursuant to a registration statement on Form S-1 (Reg. No. 333-191868) that became effective on December 17, 2013. As of December 31, 2014, there was approximately $81,339,095 held in the trust account.

After consummation of the mergers, the funds in the trust account will be released to Holdco and used by Holdco to pay holders of the public shares who exercise conversion rights, to pay expenses incurred in connection with the business combination with Parakou, and for working capital and general corporate purposes, including funding for organic growth and growth through acquisitions. Such expenses include a fee to EarlyBirdCapital of approximately $1,690,500 for acting as its investment banker in connection with the business combination, a fee to Cowen and Company, LLC of at least $800,000 for assisting Cambridge in connection with Cambridge investors, a fee of at least $500,000 to Morpheus Securities LLC for introducing Cambridge to Parakou and for assistance in the negotiating process, and fees to Cambridge’s and Parakou’s advisors.

Cambridge units, common stock and warrants are listed on Nasdaq under the symbols CAMBU, CAMB, and CAMBW, respectively.

The mailing address of Cambridge’s principal executive office is 525 South Flagler Drive, Suite 201, West Palm Beach, FL 33401. Its telephone number is (561) 932-1600. After the consummation of the mergers, it will cease to exist.

 

Holdco

Holdco is a wholly-owned subsidiary of Cambridge formed solely for the purpose of effectuating the Cambridge merger described herein. Holdco was incorporated under the laws of the Marshall Islands on October 23, 2014. Holdco owns no material assets and does not operate any business.

The mailing address of Holdco’s principal executive office is 525 South Flagler Drive, Suite 201, West Palm Beach, FL 33401. Its telephone number is (561) 932-1600. After the consummation of the mergers, its principal executive office will be that of Parakou, located at 9 Temasek Boulevard, #32-01 Suntec Tower 2, Singapore 038989 and its telephone number will be (65) 65368838 and its registered office will be located at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960.

Merger Sub

Merger Sub is a wholly-owned subsidiary of Holdco formed solely for the purpose of effecting the Parakou merger with Parakou described herein. Merger Sub was incorporated under the laws of the Marshall Islands on October 23, 2014. Merger Sub owns no material assets and does not operate any business.

The mailing address of Merger Sub’s principal executive office is 525 South Flagler Drive, Suite 201, West Palm Beach, FL 33401. Its telephone number is (561) 932-1600. After the consummation of the mergers, it will cease to exist.

Parakou

Parakou is a fully integrated industrial shipping company that owns and operates a fleet of modern MR product tankers. As of the date of this proxy statement/prospectus, Parakou’s fleet consists of eight 51,000 deadweight ton (“dwt”) MR product tankers, which were transferred in July 2014 from Parakou (International) Limited (“PIL”) a Hong-Kong based shipping firm founded in 1985. Seven of Parakou’s existing vessels are employed under time-charter contracts with terms generally between three and five years and an average remaining charter, as of the date of this proxy statement/prospectus, of 1.3 years. The time-charter contract for the remaining vessel expired in February 2015 and it has since been employed in the Spot Market. Parakou was incorporated under the laws of the Marshall Islands in January 2014 and is headquartered in Singapore.

The mailing address of Parakou’s principal executive office is 9 Temasek Boulevard, #32-01 Suntec Tower 2, Singapore 038989 and its telephone number is (65) 65368838 and its registered office will be located at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960.

Emerging Growth Company

Each of Cambridge, Holdco and Parakou is an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”). It is anticipated that after the consummation of the mergers, Holdco will continue to be an “emerging growth company.” As emerging growth companies, Cambridge, Holdco and Parakou are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. These include, but are not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and the requirement to obtain shareholder approval of any golden parachute payments not previously approved.

 

In addition, Section 107 of the JOBS Act provides that an emerging growth company can take advantage of an extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Holdco and Parakou have irrevocably opted not to take advantage of such extended transition period, and will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

Holdco could remain an emerging growth company until the last day of Holdco’s fiscal year following December 24, 2018 (the fifth anniversary of the consummation of its successor’s initial public offering). However, if Holdco’s non-convertible debt issued within a three-year period or its total revenues exceed $1 billion or the market value of its shares of common stock that are held by non-affiliates exceeds $700 million on the last day of the second fiscal quarter of any given fiscal year, Holdco would cease to be an emerging growth company as of the following fiscal year.

The Merger Proposal

The merger agreement provides for a business combination transaction by means of the mergers of (i) Cambridge with and into Holdco, with Holdco surviving and becoming the public company, which will then be renamed “Parakou Tankers, Inc.”, and (ii) Merger Sub with and into Parakou, with Parakou surviving and becoming a wholly-owned subsidiary of Holdco. The Cambridge merger and the Parakou merger are intended to be consummated at the same time. However, from a practical perspective, the merger documentation required to be filed with respect to the Cambridge merger will be filed immediately prior to the merger documentation required to be filed with respect to the Parakou merger.

Under the merger agreement, Mr. Por Liu, who will be the sole securityholder of Parakou as of the closing date of the mergers, will receive 5,800,000 common shares of Holdco in exchange for all of the common shares of Parakou common stock. Additionally, Cambridge’s initial stockholders, including certain of its directors and officers, will retain 1,000,000 common shares of Holdco at the closing of the mergers (as well as 472,125 common shares acquired in a private placement that occurred simultaneously with the initial public offering of Cambridge), having agreed to cancel an aggregate of 1,012,500 of their shares of Cambridge common stock immediately prior to the consummation of the Cambridge merger. Each of Mr. Por Liu and the Cambridge initial stockholders will have the right to receive additional Holdco common shares (up to 2,000,000 additional shares for Mr. Por Liu in the aggregate and 1,012,500 additional shares for the Cambridge initial stockholders in the aggregate) if Holdco achieves certain EBITDA (as defined in the merger agreement) targets, if Holdco achieves certain share price targets for a specified consecutive period or Holdco undergoes a change of control (as defined in the merger agreement), in each case, as set forth in the merger agreement.

Mr. Por Liu and the Cambridge initial stockholders will not be able to sell any of the common shares of Holdco that they receive as a result of the mergers (subject to limited exceptions) until (A) with respect to 50% of such shares, the earlier of (i) the date on which the closing price of the Holdco common shares exceeds $13.00 per share for any 20 trading days within a 30-trading day period following the consummation of the mergers and (ii) one year after the consummation of the acquisition or (B) with respect to the remaining 50% of such shares, one year after the consummation of the mergers. The foregoing restrictions will not apply if, subsequent to the mergers, Holdco consummates a subsequent liquidation, merger, stock exchange or similar transaction which results in all of its stockholders having the right to exchange their common shares for cash, securities or other property. Mr. Por Liu and the Cambridge initial stockholders will be required to enter into a lock-up agreement to such effect as a condition to exchanging their respective capital stock of Parakou or Cambridge for the Holdco common shares in connection with the applicable merger.

See the section entitled “The Merger Proposal — Structure of the Transaction” for the more information.

 

Cambridge and Parakou plan to complete the mergers promptly after the Cambridge special meeting, provided that:

 

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Cambridge’s stockholders have approved the merger proposal, the corporate charter proposal and the incentive compensation plan proposal;

 

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holders of no more than 7,536,766 (as of December 31, 2014) of Cambridge’s public shares have exercised their conversion rights;

 

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Holdco has received confirmation from Nasdaq that it meets all the requirements for listing on such; and

 

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the other conditions specified in the merger agreement (including that Cambridge have cash on hand of $50,000,000 after giving effect to payment of amounts that Cambridge will be required to pay to converting stockholders upon consummation of the Cambridge merger) have been satisfied or waived.

After consideration of the factors identified and discussed in the section entitled “The Merger Proposal — Cambridge’s Board of Directors’ Reasons for Approval of the Mergers,” Cambridge’s board of directors concluded that the mergers met all of the requirements disclosed in the prospectus for its initial public offering, including that the business of Parakou had a fair market value of at least 80% of the balance of the funds in the trust account at the time of execution of the merger agreement.

As a result of, and immediately after the closing of the mergers, assuming that no stockholders of Cambridge elect to convert their public shares into cash in connection with the Cambridge merger as permitted by Cambridge’s amended and restated certificate of incorporation, it is anticipated that Cambridge public stockholders, the Cambridge initial stockholders and EarlyBirdCapital, and Mr. Por Liu, will hold approximately 52.5%, 9.6% and 37.9%, respectively, of the common shares of Holdco issued and outstanding immediately after consummation of the mergers, assuming that no Cambridge public stockholders exercise their conversion rights. If the earn out targets or share price targets are fully achieved or Holdco undergoes a change of control, the Cambridge public stockholders, the Cambridge initial stockholders and EarlyBirdCapital, and Mr. Por Liu would own 43.9%, 13.6% and 42.5%, respectively, of the issued and outstanding Holdco common shares, assuming that none of Cambridge’s stockholders exercise their conversion rights in connection with the mergers. None of the foregoing calculations assume the issuance and/or exercise of any stock options.

If the merger proposal is not approved by Cambridge’s stockholders at the special meeting, none of the corporate charter proposal, the classified board proposal, nor the incentive compensation plan proposal will be presented at the special meeting for a vote. However, in that case, the Cambridge board of directors may submit the adjournment proposal for a vote.

Opinion of Financial Advisor to the Board of Directors of Cambridge

Cambridge engaged SC&H Capital (“SC&H”) to render an opinion, as of November 30, 2014, as to (i) the fairness, from a financial point of view, to Cambridge of the merger consideration to be paid by Cambridge in the Parakou merger pursuant to the merger agreement and (ii) whether Parakou had a fair market value equal to at least 80% of the balance of funds in the trust account. SC&H is an investment banking firm that regularly is engaged in the evaluation of businesses and their securities in connection with acquisitions, corporate restructuring, private placements and for other purposes. Cambridge’s board of directors decided to use the services of SC&H because it is a nationally recognized investment banking firm that has experience in similar matters.

SC&H rendered its oral opinion to Cambridge’s board of directors on November 30, 2014 (which was subsequently confirmed in writing by delivery of SC&H’s written opinion dated the same date) that, as of November 30, 2014, (i) the merger consideration to be paid by Cambridge in the Parakou merger pursuant to the

 

merger agreement was fair, from a financial point of view, to Cambridge and that (ii) Parakou had a fair market value equal to at least 80% of the balance of funds in the trust account.

The amount of the consideration to be paid by Cambridge to Parakou’s securityholder was determined pursuant to negotiations between Cambridge and Parakou and not pursuant to recommendations of SC&H.

The opinion was provided for the use and benefit of the Cambridge board of directors in connection with its consideration of the mergers and only addressed (i) the fairness, from a financial point of view, to Cambridge of the merger consideration to be paid by Cambridge in the Parakou merger pursuant to the merger agreement and (ii) whether Parakou had a fair market value equal to at least 80% of the balance of funds in the trust account, in each case as of the date of the opinion, and did not address any other aspect or implication of the merger. The summary of SC&H’s opinion in this proxy statement/prospectus is qualified in its entirety by reference to the full text of the written opinion, which is included as Annex C to this proxy statement/prospectus and sets forth the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by SC&H in preparing its opinion. However, neither SC&H’s written opinion nor the summary of its opinion and the related analyses set forth in this proxy statement/prospectus are intended to be, and do not constitute, advice or a recommendation to any stockholder as to how such stockholder should act or vote with respect to any matter relating to the proposed mergers.

The Corporate Charter Proposal

In addition to voting on the mergers, the stockholders of Cambridge will vote on a proposal to approve the following material differences between the amended and restated articles of incorporation and amended and restated bylaws of Holdco and Cambridge’s current amended and restated certificate of incorporation and bylaws: (i) the name of the new public entity will be “Parakou Tankers, Inc.” as opposed to “Cambridge Capital Acquisition Corporation”; (ii) Holdco will have 100,000,000 authorized common shares and 1,000,000 authorized preferred shares, as opposed to Cambridge which has 40,000,000 authorized shares of common stock and 1,000,000 authorized shares of preferred stock; (iii) Holdco’s corporate existence will be perpetual as opposed to Cambridge’s corporate existence which terminates if a business combination is not consummated by Cambridge within a specified period of time; and (iv) Holdco’s amended and restated articles of incorporation will not include the various provisions applicable only to special purpose acquisition corporations that Cambridge’s amended and restated certificate of incorporation contains. See the section entitled “The Corporate Charter Proposal.”

The Classified Board Proposal

The stockholders of Cambridge are also being asked to vote upon a proposal to approve a provision of the amended and restated articles of incorporation of Holdco which will require a vote of two-thirds of the shareholders to amend its classified board structure, whereas Cambridge’s current amended and restated certificate of incorporation requires a simple majority vote. See the section entitled “The Classified Board Proposal.”

The Incentive Compensation Plan Proposal

The proposed 2014 Equity and Incentive Compensation Plan will reserve up to 1,500,000 Holdco common shares for issuance in accordance with the plan’s terms. The purpose of the 2014 Equity and Incentive Compensation Plan is to assist in attracting and retaining directors, officers, and other key executives and employees of Holdco and its subsidiaries and to provide to such persons incentives and rewards for performance and promoting the creation of long-term value for stockholders of Holdco by closely aligning the interests of such individuals with those of such shareholders. The 2014 Equity and Incentive Compensation Plan authorizes

 

the award of share-based incentives and cash incentives to encourage directors, officers, and other key executives and employees, as described below, to expend maximum effort in the creation of shareholder value. The plan is attached as Annex F to this proxy statement/prospectus. You are encouraged to read the 2014 Equity and Incentive Compensation Plan in its entirety. See the section entitled “The Incentive Compensation Plan Proposal.”

The Adjournment Proposal

If, based on the tabulated vote, there are not sufficient votes at the time of the special meeting to authorize Cambridge to consummate the mergers (because the merger proposal is not approved or more than 7,536,766 (as of December 31, 2014) of the holders of the public shares properly elect to convert their public shares into cash), Cambridge’s board of directors may submit a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation of proxies. See the section entitled “The Adjournment Proposal.”

Cambridge Initial Stockholders

As of March 4, 2015, the record date for the Cambridge special meeting, Cambridge’s initial stockholders — Mitchell I. Gordon, President, Chief Financial Officer and director of Cambridge, Michael Durham, Nathan Gantcher and Scott Laurans, each a director of Cambridge, Sidney Brown, David Brodsky, Herb Shear, Bob Hammel, each a special advisor of Cambridge, and Jonathan Morris, Elliot Brodsky, Alex Sagan, Ramon Suazo, Raymond Avon Ventures, LLC, Jonathan Meeks, Gordon Family 2007 Family Trust and Cambridge Capital LLC — beneficially owned and were entitled to vote an aggregate of 2,012,500 initial shares that were issued prior to Cambridge’s initial public offering. These individuals and entities, together with EarlyBirdCapital, also purchased an aggregate of 427,500 private units simultaneously with the consummation of Cambridge’s initial public offering. The initial shares and private units held by the Cambridge initial stockholders and EarlyBirdCapital currently constitute approximately 23.6% of the outstanding shares of Cambridge’s common stock.

In connection with the initial public offering, Cambridge and EarlyBirdCapital entered into agreements with each of the Cambridge initial stockholders pursuant to which each Cambridge initial stockholder agreed to vote the initial shares, the shares included in the private units, as well as any shares of common stock acquired in the aftermarket, in favor of the merger proposal. The Cambridge initial stockholders have also indicated that they intend to vote their shares in favor of all other proposals being presented at the meeting. The initial shares and shares included in the private units have no redemption rights in the event a business combination is not effected in the required time period and will be worthless if no business combination is effected by Cambridge. In connection with the initial public offering, the Cambridge initial stockholders entered into an escrow agreement pursuant to which their initial shares are held in escrow and may not be transferred (subject to limited exceptions) until (A) with respect to 50% of the initial shares, the earlier of one year after the date of the consummation of an initial business combination and the date on which the closing price of the Cambridge common stock exceeds $13.00 per share for any 20 trading days within a 30-trading day period following the consummation of an initial business combination, (B) with respect to the remaining 50% of the initial shares, one year after the date of the consummation of an initial business combination, or (C) earlier, in each case if, subsequent to an initial business combination, Cambridge consummates a subsequent liquidation, merger, stock exchange or other similar transaction which results in all of its stockholders having the right to exchange their shares of common stock for cash, securities or other property.

Date, Time and Place of Special Meeting of Cambridge’s Stockholders

The special meeting in lieu of annual meeting of the stockholders of Cambridge will be held at 10:00 a.m., Eastern time, on March 31, 2015, at the offices of DLA Piper LLP (US), Cambridge’s counsel, at 200 South

 

Biscayne Boulevard, Suite 2500, Miami, Florida 33131-5341, to consider and vote upon the merger proposal, the corporate charter proposal, the classified board proposal, the incentive compensation plan proposal, and/or if necessary, the adjournment proposal to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, Cambridge is not authorized to consummate the mergers.

Voting Power; Record Date

Stockholders will be entitled to vote or direct votes to be cast at the special meeting if they owned shares of Cambridge common stock at the close of business on March 4, 2015, which is the record date for the special meeting. Stockholders will have one vote for each share of Cambridge common stock owned at the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. Cambridge warrants and purchase options do not have voting rights. On the record date, there were 10,534,625 shares of Cambridge common stock outstanding, of which 8,050,000 were public shares with the rest being held by the Cambridge initial stockholders and EarlyBirdCapital.

Quorum and Vote of Cambridge Stockholders

A quorum of Cambridge stockholders is necessary to hold a valid meeting. A quorum will be present at the Cambridge special meeting if a majority of the outstanding shares entitled to vote at the meeting are represented in person or by proxy. Abstentions and broker non-votes will count as present for the purposes of establishing a quorum. The Cambridge initial stockholders hold approximately 23.6% of the outstanding shares of Cambridge common stock, none of which are public shares. Such shares, as well as any shares of common stock acquired in the aftermarket by the Cambridge initial stockholders, will be voted in favor of the proposals presented at the special meeting. The proposals presented at the special meeting will require the following votes:

 

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Pursuant to Cambridge’s amended and restated certificate of incorporation, the approval of the merger proposal will require the affirmative vote of the holders of a majority of the then outstanding shares of common stock present and entitled to vote at the meeting to approve the merger proposal. There are currently 10,534,625 shares of Cambridge common stock outstanding, of which 8,050,000 are public shares. The mergers will not be consummated if the holders of more than 7,536,766 (as of December 31, 2014) of the public shares properly demand conversion of their public shares into cash (assuming Parakou were to waive its right to terminate the merger agreement if Cambridge did not have cash on hand of $50,000,000 as described below).

 

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The approval of the corporate charter proposal will require the affirmative vote of the holders of a majority of the outstanding shares of Cambridge common stock present and entitled to vote thereon at the meeting.

 

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The approval of the classified board proposal will require the affirmative vote of the holders of a majority of the outstanding shares of Cambridge common stock present and entitled to vote thereon at the meeting.

 

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The approval of the incentive compensation plan proposal will require the affirmative vote of the holders of a majority of the outstanding shares of Cambridge common stock present and entitled to vote thereon at the meeting.

Abstentions will have the same effect as a vote “against” the merger proposal, the corporate charter proposal, the classified board proposal, the incentive compensation plan proposal and the adjournment proposal, if presented. Broker non-votes, while considered present for the purposes of establishing a quorum, will have no effect on the merger proposal, the corporate charter proposal, the classified board proposal, the incentive

 

compensation plan proposal or an adjournment proposal. Please note that holders of the public shares cannot seek conversion of their shares unless they affirmatively vote for or against the merger proposal.

Under the merger agreement, the approval of the classified board proposal is not a condition to the consummation of the mergers.

Conversion Rights

Pursuant to Cambridge’s amended and restated certificate of incorporation, a holder of public shares may demand that Cambridge convert such shares into cash if the mergers are consummated. Holders of public shares will be entitled to receive cash for these shares only if they (i) check the box on the proxy card to elect conversion, (ii) check the box on the proxy card marked “Shareholder Certification,” (iii) affirmatively vote either for or against the merger proposal and, (iv) prior to 5:00 p.m., Eastern Time at least two business days prior to the vote at the meeting, (x) submit a written request to Cambridge’s transfer agent that Cambridge convert their public shares for cash, and (y) deliver their stock to Cambridge’s transfer agent physically or electronically through Depository Trust Company, or DTC. If the mergers are not completed, these shares will not be converted into cash. If a holder of public shares properly demands conversion, votes for or against the merger proposal and delivers its shares to Cambridge’s transfer agent, Cambridge will convert each public share into a full pro rata portion of the trust account, calculated as of two business days prior to the anticipated consummation of the merger. As of December 31, 2014, this would amount to approximately $10.10 per share. If a holder of public shares exercises its conversion rights, then it will be exchanging its shares of Cambridge common stock for cash and will no longer own the shares. Accordingly, holders of public shares who elect to convert will have no right to receive Holdco common shares in the Cambridge merger. See the section entitled “Special Meeting of Cambridge Stockholders — Conversion Rights” for a detailed description of the procedures to be followed if you wish to convert your shares into cash.

Notwithstanding the foregoing, a holder of public shares, together with any affiliate of his or any other person with whom he is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act) will be restricted from seeking conversion rights with respect to 20.0% or more of the public shares. Accordingly, all public shares in excess of 20% held by a given Cambridge public stockholder will not be converted to cash.

The mergers will not be consummated if holders of more than 7,536,766 (as of December 31, 2014) of the public shares (representing approximately 94% of the public shares) properly demand conversion of their shares into cash. However, the merger agreement provides that Parakou may terminate the agreement if immediately prior to the consummation of the transactions contemplated by the merger agreement, Cambridge does not have cash on hand of $50,000,000 after giving effect to the payment of amounts that Cambridge will be required to pay to converting stockholders upon consummation of the Cambridge merger. If Parakou does not waive this termination right, the mergers will not be consummated if holders of more than 3,083,188 of the public shares (representing approximately 38.3% of the public shares) properly demand conversion of their shares into cash.

Holders of Cambridge warrants and purchase options will not have conversion rights with respect to such rights.

Appraisal Rights

Cambridge stockholders (including the initial stockholders) and Cambridge warrantholders do not have appraisal rights in connection with the mergers under the DGCL.

Proxy Solicitation

Proxies may be solicited by mail, telephone or in person. Cambridge has engaged Morrow & Co., LLC to assist in the solicitation of proxies.

 

If a stockholder grants a proxy, it may still vote its shares in person if it revokes its proxy before the special meeting. A stockholder may also change its vote by submitting a later-dated proxy as described in the section entitled “Special Meeting of Cambridge Stockholders — Revoking Your Proxy.”

Interests of Cambridge’s Directors and Officers in the Mergers

When you consider the recommendation of Cambridge’s board of directors in favor of approval of the merger proposal, you should keep in mind that Cambridge’s initial stockholders, including its directors and executive officers, have interests in such proposal that are different from, or in addition to, your interests as a stockholder or warrantholder. These interests include, among other things:

 

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If the mergers are not consummated by December 30, 2015 or another business combination transaction is not consummated by June 23, 2015 (or December 30, 2015 if certain conditions are met), Cambridge will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding public shares for cash and, subject to the approval of its remaining stockholders and its board of directors, dissolving and liquidating. In such event, the 2,012,500 initial shares held by Cambridge’s initial stockholders, including its directors, officers and special advisors, which were acquired for an aggregate purchase price of $25,000 prior to Cambridge’s initial public offering, would be worthless because Cambridge’s initial stockholders are not entitled to participate in any redemption or distribution with respect to such shares. Such shares had an aggregate market value of $19,943,875 based upon the closing price of $9.91 per share on the Nasdaq on February 27, 2015.

 

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Cambridge’s initial stockholders, including its directors, officers and special advisors, and EarlyBirdCapital purchased an aggregate of 472,125 private units from Cambridge for an aggregate purchase price of $4,721,250 (or $10.00 per unit). These purchases took place on a private placement basis simultaneously with the consummation of the initial public offering. All of the proceeds that Cambridge received from these purchases were placed in the trust account. Such units had an aggregate market value of $4,900,658 based upon the closing price of $10.38 per unit on the Nasdaq on February 27, 2015. The purchasers of the private units waived the right to participate in any redemption or liquidation distribution with respect to such private units. Accordingly, the Cambridge shares and rights underlying the private units will become worthless if Cambridge does not consummate the mergers by December 30, 2015, or a different business combination by June 23, 2015 (or December 30, 2015 if certain conditions are met) (as will the Cambridge warrants held by Cambridge public stockholders).

 

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The transactions contemplated by the merger agreement provide that Mr. Mitchell I. Gordon will be a director of Holdco after the closing of the mergers. As such, in the future he will receive any cash fees, stock options or stock awards that the Holdco board of directors determines to pay to its non-executive directors.

 

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If Cambridge is unable to complete a business combination within the required time period, Cambridge’s executive officers will be personally, jointly and severally 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 Cambridge for services rendered or contracted for or products sold to Cambridge, but only if such a vendor or target business has not executed a waiver of such claims.

 

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Cambridge’s officers, directors, initial stockholders and their affiliates are entitled to reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on Cambridge’s behalf, such as identifying and investigating possible business targets and business combinations. However, if Cambridge fails to consummate a business combination within the required period, they will not have any claim against the trust account for reimbursement. Accordingly, Cambridge may not be able to reimburse these expenses if the mergers are not consummated by December 30, 2015, or another

 

business combination is not completed by June 23, 2015 (or December 30, 2015 if certain conditions are met). As of December 31, 2014, Cambridge’s officers, directors, initial stockholders and their affiliates had incurred approximately $16,000 of unpaid reimbursable expenses.

 

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If Cambridge is required to be liquidated and there are no funds remaining to pay the costs associated with the implementation and completion of such liquidation, Cambridge’s executive officers agreed to advance Cambridge the funds necessary to pay such costs and complete such liquidation (currently anticipated to be no more than approximately $15,000) and not to seek repayment for such expenses.

At any time prior to the special meeting, during a period when they are not then aware of any material nonpublic information regarding Cambridge or its securities, the Cambridge initial stockholders, Parakou or Mr. Por Liu and/or their respective affiliates may purchase shares from institutional and other investors who vote, or indicate an intention to vote, against the merger proposal, or execute agreements to purchase such shares from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire shares of Cambridge’s common stock or vote their shares in favor of the merger proposal. The purpose of such share purchases and other transactions would be to increase the likelihood of satisfaction of the requirements that (i) the holders of a majority of the shares present and entitled to vote at the special meeting to approve the merger proposal vote in its favor, (ii) that holders of 7,536,766 (as of December 31, 2014) or fewer of the public shares demand conversion of their public shares into cash, where it appears that such requirements would otherwise not be met and (iii) that Cambridge have cash on hand of $50,000,000 after giving effect to payment of amounts that Cambridge will be required to pay to converting stockholders upon consummation of the transactions contemplated by the merger agreement. While the exact nature of any such incentives has not been determined as of the date of this proxy statement/prospectus, they might include, without limitation, arrangements to protect such investors or holders against potential loss in value of their shares, including the granting of put options and the transfer to such investors or holders of shares or rights owned by the Cambridge initial stockholders for nominal value.

Entering into any such arrangements may have a depressive effect on Cambridge’s common stock. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase shares at a price lower than market and may therefore be more likely to sell the shares he owns, either prior to or immediately after the special meeting.

If such transactions are effected, the consequence could be to cause the merger to be approved in circumstances where such approval could not otherwise be obtained. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the merger proposal and other proposals to be presented at the special meeting and would likely increase the chances that such proposals would be approved. Moreover, any such purchases may make it less likely that the holders of more than 7,536,766 (as of December 31, 2014) of the public shares will exercise their conversion rights.

As of the date of this proxy statement/prospectus, there have been no such discussions and no agreements to such effect have been entered into with any such investor or holder. Cambridge will file a Current Report on Form 8-K to disclose any arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the merger proposal or the conversion threshold. Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.

Recommendation to Stockholders

Cambridge’s board of directors believes that the merger proposal and the other proposals to be presented at the special meeting are fair to and in the best interest of Cambridge’s stockholders and unanimously recommends

 

that its stockholders vote “FOR” the merger proposal, “FOR” the corporate charter proposal, “FOR” the classified board proposal, “FOR” the incentive compensation plan proposal, and “FOR” the adjournment proposal, if presented.

Conditions to the Closing of the Mergers

Conditions to the Obligations of Each Party

Consummation of the transactions contemplated by the merger agreement is conditioned on (i) the Cambridge and Parakou stockholders approving the transaction, (ii) the corporate charter proposal having been a approved by the Cambridge stockholders, (iii) the 2014 Equity and Incentive Compensation Plan having been approved by the Cambridge stockholders, (iv) the proxy statement/prospectus having been declared effective and no stop order suspending the effectiveness of the proxy statement/prospectus having been issued and no proceeding for that purpose having been initiated by the SEC, (v) the holders of no more than 7,536,766 (as of December 31, 2014) of Cambridge’s public shares having exercised their conversion rights, and (vi) the Holdco common shares to be issued in the mergers having been authorized for listing on the Nasdaq, subject to official notice of issuance.

In addition, the consummation of the transactions contemplated by the merger agreement is conditioned upon, among other things, (i) expiration of all applicable waiting periods, if any, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), (ii) no government entity having enacted, issued, promulgated, enforced or entered any law, rule, regulation, judgment, injunction, decree, executive order or award which is then in effect and which has the effect of making the mergers or the transactions contemplated thereby illegal or otherwise prohibiting consummation of the mergers, (iii) the representations and warranties of each of Parakou, Cambridge, Holdco and Merger Sub being true and correct (without giving effect to any limitation as to materiality or “company material adverse effect”) as of the closing date (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except where such failure to be true and correct would not, individually or in the aggregate, reasonably be expected to have a material adverse effect, (iv) each of Parakou, Cambridge, Holdco and Merger Sub having performed or complied in all material respects with all agreements and covenants required by the merger agreement to be performed or complied with on or prior to the closing, (v) each of Parakou, Cambridge, Holdco and Merger Sub having received a certificate with respect to compliance with the foregoing clauses (iii) and (iv) from the other party, (vi) all necessary consents, waivers and approvals required to be obtained in connection with the mergers having been received, and (vii) the absence of any litigation pending or threatened against either party, which is reasonably expected to prevent consummation of the transactions contemplated by the merger agreement or cause such transactions to be rescinded following consummation.

Parakou’s Conditions to Closing

The obligations of Parakou to consummate the transactions contemplated by the merger agreement also are conditioned upon, among other things:

 

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no material adverse effect having occurred with respect to Cambridge, Holdco or Merger Sub;

 

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Cambridge being in compliance with public company reporting requirements under the Exchange Act, except where noncompliance would not have a material adverse effect;

 

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Cambridge having executed and delivered certain documents or certificates, including a registration rights agreement;

 

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the Cambridge initial stockholders having executed and delivered a lock-up agreement;

 

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the individuals listed as persons to become directors of Holdco upon consummation of the mergers in the section “Management of Holdco Following the Mergers” having been appointed to the board of directors of Holdco; and

 

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Cambridge having arranged for funds remaining in the trust account to be dispersed to Holdco upon the closing of the mergers.

Cambridge’s Conditions to Closing

The obligations of Cambridge, Holdco and Merger Sub to consummate the transactions contemplated by the merger agreement also are conditioned upon each of the following, among other things:

 

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no material adverse effect having occurred with respect to Parakou;

 

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Mr. Por Liu having executed and delivered a lock-up agreement;

 

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Parakou having obtained certain specified consents, approvals or authorizations; and

 

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Cambridge having received an opinion of Marshall Islands counsel.

Termination

The merger agreement may be terminated at any time, but not later than the closing, as follows:

 

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by mutual written consent of Cambridge and Parakou;

 

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by either Cambridge or Parakou if the transactions contemplated by the merger agreement are not consummated on or before May 21, 2015, provided that the right to terminate will not be available to any party whose failure to fulfill any material obligation was the cause of or resulted in the failure of the transactions contemplated by the merger agreement to be consummated by such date;

 

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by either Cambridge or Parakou if any governmental authority shall have enacted, issued, promulgated, enforced or entered any order, law, rule regulation, judgment, injunction, decree or ruling which has become final and nonappealable, and which permanently restrains, enjoins or otherwise prohibits the transactions contemplated by the merger agreement;

 

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by either Cambridge or Parakou if the other party has breached any of its covenants, agreements or representations and warranties (and has not cured its breach within thirty days of the giving of notice of such breach), provided that the terminating party is itself not in breach;

 

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by either Cambridge or Parakou if, (i) at the Cambridge stockholder meeting, the mergers, the merger agreement and the issuance of Holdco common shares shall fail to be approved by holders of Cambridge’s public shares, or (ii) at the Parakou shareholder meeting, the mergers and the merger agreement shall fail to be approved by the Parakou shareholders;

 

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by Parakou if (a) Cambridge’s board withdraws, modifies or changes its recommendation of the merger agreement or the transactions contemplated by the merger agreement in a manner adverse to Parakou, or resolves to do so, (b) Cambridge’s board recommends to its stockholders an alternative transaction, or resolves to do so, or enters into any letter of intent or similar document or any agreement accepting an alternative transaction, (c) Cambridge fails to include in the proxy statement/prospectus the recommendation of Cambridge’s board in favor of the approval and adoption of the merger agreement, the mergers or the issuance of Holdco common shares, or (d) through the fault (whether by commission or omission) of Cambridge, the mergers or the issuance of the Holdco common shares are not, prior to April 30, 2015, submitted for approval at the special meeting;

 

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by Parakou if, immediately prior to the mergers, Cambridge does not have cash on hand of $50,000,000 after giving effect to payment of amounts that Cambridge will be required to pay to converting stockholders upon consummation of the transactions contemplated by the merger agreement (this termination right would be triggered if holders of more than 3,083,188 of Cambridge’s public shares validly exercise their conversion rights); or

 

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by either Cambridge or Parakou if, at any time prior to the closing date, Holdco would, as a result of any adoption, implementation, promulgation, repeal, modification, amendment or change of any applicable law prior to the closing date, be treated as a domestic corporation for U.S. federal income tax purposes as of or after the closing date.

If permitted under applicable law, either Cambridge or Parakou may waive any inaccuracies in the representations and warranties made to such party contained in the merger agreement and waive compliance with any agreements or conditions for the benefit of itself or such party contained in the merger agreement. However, the condition requiring that the holders of no more than 7,536,766 (as of December 31, 2014) of Cambridge’s public shares exercise their conversion rights may not be waived by Cambridge, due to applicable laws.

The existence of the financial and personal interests of the Cambridge directors may result in a conflict of interest on the part of one or more of them between what he may believe is best for Cambridge and what he may believe is best for himself in determining whether or not to grant a waiver in a specific situation. See the sections entitled “Risk Factors” and “The Merger Proposal — Interests of Cambridge’s Directors and Officers in the Merger” for a further discussion of this and other risks.

Tax Consequences of the Mergers — U.S. Federal Income Tax Considerations

It is intended that, for U.S. federal income tax purposes, the mergers shall (i) qualify as reorganizations within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and (ii) not result in gain being recognized by holders of Cambridge common stock immediately prior to the effective time of the mergers under Section 367(a) of the Code (other than any such shareholder that would own, actually or constructively, five percent or more of the stock of Holdco (by vote or value) immediately after the mergers) (in the aggregate, the “Intended Tax Treatment”), and the parties intend to report the mergers in a manner consistent with the Intended Tax Treatment for U.S. federal income tax purposes. However, the closing of the mergers is not conditioned upon the receipt of an opinion of counsel that the mergers will qualify for the Intended Tax Treatment. In addition, none of Cambridge, Holdco, Merger Sub and Parakou intends to request a ruling from the IRS regarding the U.S. federal income tax consequences of the mergers. Consequently, no assurance can be given that the IRS will not challenge the conclusions described below or that a court would not sustain such a challenge. Furthermore, if holders of Cambridge common stock holding in the aggregate more than 60% of the value of Cambridge common stock exercise their conversion rights and receive solely cash, the Cambridge merger may not qualify for the Intended Tax Treatment. Although we believe it is unlikely that the mergers will be consummated in such an event, there can be no assurance in that regard and holders of Cambridge common stock may be required to recognize gain or loss, regardless of whether they exchange their shares of Cambridge common stock solely for Holdco common shares or solely for cash.

Assuming the mergers qualify for the Intended Tax Treatment:

 

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A holder of Cambridge common stock (other than any such stockholder that would own, actually or constructively, five percent or more of the stock of Holdco (by vote or value) immediately after the mergers) that exchanges all of its shares of Cambridge common stock solely for Holdco common shares in the Cambridge merger will not recognize any gain or loss; and

 

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A holder of Cambridge common stock that exercises its conversion right and receives solely cash for its shares of Cambridge common stock will generally recognize gain or loss equal to the difference between the

 

amount of cash received and the aggregate tax basis in the shares of Cambridge common stock surrendered. Such gain or loss generally will be long-term capital gain or loss if the U.S. holder’s holding period of the shares of Cambridge common stock surrendered exceeds one year at the effective time of the mergers.

In the event that the mergers qualify for the Intended Tax Treatment, a U.S. holder of shares of Cambridge common stock who will own, actually or constructively, at least five percent of Holdco by vote or value immediately after the mergers may be required to recognize gain unless he or she enters into a five-year gain recognition agreement and continues to meet all the reporting requirements relating thereto. There can be no assurance that sufficient information will be provided for such shareholders to meet all their reporting obligations. Any such shareholders are urged to consult their tax advisor regarding the requirements of a gain recognition agreement and their ability to defer gain.

Holders of Cambridge common stock should consult their tax advisors as to the particular tax consequences to them of the mergers, including the effect of U.S. federal, state and local tax laws and foreign tax laws. For a more detailed discussion of U.S. federal income tax consequences of the mergers, see “Tax Consequences of the Mergers — U.S. Federal Income Tax Considerations.”

Anticipated Accounting Treatment

The mergers will be accounted for as a “reverse merger” and recapitalization at the date of the consummation of the transaction since Mr. Por Liu, who will be the sole securityholder of Parakou as of the closing date of the mergers, will hold at least 37.9% of the outstanding common shares of Holdco as the largest minority voting interest holder immediately following the completion of the mergers, Parakou will have its current officers assuming all corporate and day-to-day management offices of Holdco, including chief executive officer and chief financial officer, Mr. Por Liu, as well as Mr. Yang Jian Guo, Chief Operating Officer of Parakou, will serve on the board of directors of Holdco upon consummation of the mergers and Mr. Por Liu will have the right to designate for nomination to the Holdco board up to three directors, depending on his ownership percentage of Holdco common shares at the time of the nomination. Accordingly, Parakou will be deemed to be the accounting acquirer in the transaction and, consequently, the transaction is treated as a recapitalization of Parakou. Accordingly, the assets and liabilities and the historical operations that will be reflected in the Holdco financial statements after consummation of the mergers will be those of Parakou and will be recorded at the historical cost basis of Parakou. Cambridge’s assets, liabilities and results of operations will be consolidated with the assets, liabilities and results of operations of Parakou upon consummation of the mergers.

Regulatory Matters

The mergers and the transactions contemplated by the merger agreement are not subject to any additional federal or state regulatory requirement or approval, except for filings with the Marshall Islands and the State of Delaware necessary to effectuate the transactions contemplated by the merger agreement.

Risk Factors

In evaluating the proposals to be presented at the special meeting, a stockholder should carefully read this proxy statement/prospectus and especially consider the factors discussed in the section entitled “Risk Factors.”