1368879--9/15/2008--TAILWIND_FINANCIAL

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Risks Related to Our Business We are a development stage company with no operating history and, accordingly, there is no basis on which to evaluate our ability to achieve our business objective. The report of the independent registered public accounting firm that audited our financial statements includes a going concern explanatory paragraph due to the possibility that we may not consummate a business combination within the required time frame, which will require us to dissolve and liquidate. The report of the independent registered public accounting firm that audited our financial statements includes a going concern explanatory paragraph due to the possibility that we may not consummate a business combination within the required time frame, which will require us to dissolve and liquidate. If we are forced to dissolve and/or liquidate before a business combination and distribute the trust account, our public stockholders may receive less than $8.00 per share and our warrants will expire worthless. If we are unable to find a suitable target acquisition that would result in a business combination, the funds being held in the trust account may not be returned to investors for quite some time. If we do not timely consummate a business combination or execute a letter of intent, agreement in principle or definitive agreement by the October 17, 2008 deadline, we will be required to dissolve, but such dissolution requires the approval of holders of a majority of our outstanding stock in accordance with Delaware law. Without this stockholder approval, we will not be able to dissolve and liquidate until at least after our corporate existence ceases on April 17, 2009. If the proceeds to us from our initial public offering not held in the trust account together with interest earned on the trust account available to us are insufficient to allow us to operate until at least April 17, 2009, we may not be able to consummate a business combination. Investors will not be entitled to protections normally afforded to investors of blank check companies. Unlike most other blank check offerings, we allow up to approximately 29.99% of our public stockholders to exercise their conversion rights. This higher threshold will make it easier for us to consummate a business combination with which certain investors may not agree, and certain investors may not receive the full amount of their original investment upon exercise of their conversion rights. Unlike most other blank check offerings, we allow up to approximately 29.99% of our public stockholders to exercise their conversion rights. The ability of a larger number of our stockholders to exercise their conversion rights may not allow us to consummate the most desirable business combination or optimize our capital structure. If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share liquidation price received by stockholders will be less than the $8.00 per share held in the trust account. Our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them. Since we have not yet finalized the target acquisition with which to consummate a business combination, we are unable to currently ascertain the merits or risks of the business operations. We may issue shares of our capital stock, including through convertible debt securities, to consummate a business combination, which would reduce the equity interest of our stockholders and likely cause a change in control of our ownership. Our ability to successfully consummate a business combination and to be successful thereafter will be largely dependent upon the efforts of Gordon A. McMillan, our Chairman, Andrew A. McKay, our Chief Executive Officer, John Anderson, our Chief Financial Officer, and Philip Armstrong, Robert C. Hain, Stephen T. Moore and Robert Penteliuk, our directors. Our officers and directors allocate only a portion of their business time to our company, thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to consummate a business combination. Our officers and directors currently are, and may in the future become affiliated with additional entities that are, engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented. Genuity Financial Group and its subsidiaries are under no legal or contractual obligation to identify acquisition opportunities or perform any other services on our behalf and Genuity Financial Group and its subsidiaries may take actions that conflict with our interests. Jovian Capital Corporation and its subsidiaries are under no legal or contractual obligation to perform any services on our behalf and they may take actions that conflict with our interests. If we were to engage in a business combination with one or more target businesses that have relationships with our existing stockholders, directors or officers, it may raise potential conflicts. Our current officers and directors may resign upon consummation of a business combination. The shares of common stock and warrants owned by our private stockholders, officers and directors will not participate in liquidation distributions, and a conflict of interest may arise in determining whether a particular target acquisition is appropriate for a business combination. If our common stock becomes subject to the SEC s penny stock rules, broker-dealers may experience difficulty in completing customer transactions and trading activity in our securities may be adversely affected. Initially, we may only be able to consummate one business combination, which may cause us to be solely dependent on a single business and a limited number of products or services. Because of our limited resources and the significant competition for business combination opportunities, we may not be able to consummate a business combination during the prescribed time period. We depend on the proceeds of our initial public offering not placed in the trust account and interest on the trust account available to us to fund our search for a target business or businesses and to consummate our initial business combination. Our private stockholders, including our directors and officers, may vote shares of common stock they acquired in or following our initial public offering on a proposed business combination any way they choose. Our private stockholders, including our directors and officers, control a substantial interest in us and thus may influence certain actions requiring a stockholder vote. Our staggered board may entrench management and discourage unsolicited stockholder proposals that may be in the best interests of stockholders. Our outstanding warrants may have an adverse effect on the market price of our common stock and make it more difficult to consummate a business combination. If our private stockholders exercise their registration rights, such exercise may have an adverse effect on the market price of our common stock and the existence of the registration rights may make it more difficult to consummate a business combination. If we are deemed to be an investment company, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to consummate a business combination, or we may be required to incur additional expenses if we are unable to dissolve after the expiration of the allotted time periods. We may or may not obtain an opinion from an unaffiliated third party as to the fair market value of a target acquisition or that the price we are paying for the business is fair to our stockholders. There may be tax consequences associated with our acquisition, holding and disposition of target companies and assets. There is no guarantee that a market for our securities will be maintained, which would adversely affect the liquidity and price of our securities. The American Stock Exchange may require us to submit a new listing application, subject to the initial listing requirements, in connection with a business combination, or may delist our securities from trading on its exchange, which could limit investors ability to effect transactions in our securities and subject us to additional trading restrictions. We may choose to redeem our outstanding warrants at a time that is disadvantageous to our warrant holders. An effective registration statement may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise his, her or its warrants and causing such warrants to be practically worthless. Because we may acquire a company located outside of the United States, we may be subject to various risks of the foreign jurisdiction in which we ultimately operate. We may be subject to taxation in Canada, which would increase our operating expenses for which we have limited funds available. Because any target business with which we attempt to complete a business combination will be required to provide our stockholders with financial statements prepared in accordance with and reconciled to United States generally accepted accounting principles, the pool of prospective target businesses may be limited. We are located outside the United States and, if we acquire one or more businesses outside of the United States, our assets would be located and a number of our directors and officers would be resident outside the United States, which may hinder service of process or make it impossible, difficult or more costly for an investor to enforce a judgment granted by a United States court against us or such persons. If we acquire one or more foreign businesses, we may incur additional costs due to currency exchange and we could experience gains or losses solely on changes in the exchange rate between the U.S. Dollar and the foreign currency. Provisions in our second amended and restated certificate of incorporation and bylaws and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our common stock and could entrench management. If we incur indebtedness in connection with consummating a business combination we will be exposed to additional risks, including the typical risks associated with leverage. If we incur indebtedness in connection with consummating a business combination we will be exposed to additional risks, including the typical risks associated with leverage. Risks Related to the Shipping Industry If charter rates fluctuate and the shipping industry continues to undergo cyclical turns, it may reduce our profitability and operations. The shipping industry is subject to seasonal fluctuations in demand and, therefore, may cause volatility in our operating results. If we experienced a catastrophic loss and our insurance is not adequate to cover such loss, it could lower our profitability and be detrimental to operations. We may incur significant costs in complying with environmental, safety and other governmental regulations, and our failure to comply with these regulations could result in the imposition of penalties, fines and restrictions on our operations. The ownership and operation of vessels in international trade is susceptible to world events, which could be detrimental to our financial condition and operating performance. If a business combination involves the ownership of vessels, such vessels could be arrested by maritime claimants, which could result in the interruption of business and decrease revenue and lower profitability. Governments could requisition vessels of a target company during a period of war or emergency, resulting in a loss of earnings. We may become subject to United States Federal income taxation on our United States source shipping income, which would reduce our net income and impair our cash flow. If a target company has or obtains a vessel that is of second-hand or older nature, it could increase our costs and decrease our profitability. Because certain financial information will be required to be provided to our shareholders in connection with a proposed business combination, prospective target businesses may be limited.

Full 10-K form ▸

1368879--9/15/2008--TAILWIND_FINANCIAL_INC.