Full Press Release Details
INDIA GLOBALIZATION CAPITAL, INC.
(a development stage company)
INDEX TO FINANCIAL STATEMENTS
Financial Statements
| Page | ||||
| Report of independent registered public accounting firm | 2 | |||
| Balance sheet as of March 8, 2006 | 3 | |||
| Statement of operations for the period from April 29, 2005 (date of inception) through March 8, 2006 | 4 | |||
| Statement of stockholders equity for the period from April 29, 2005 (date of inception) through March 8, 2006 | 5 | |||
| Statement of cash flows for the period from April 29, 2005 (date of inception) through March 8, 2006 | 6 | |||
| Notes to financial statements | 7-11 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
India Globalization Capital, Inc.
We have audited the accompanying balance sheet of India Globalization Capital, Inc. (a development
stage company) as of March 8, 2006 and the related statements of operations, stockholders equity
and cash flows for the period from April 29, 2005 (inception) through March 8, 2006. These
financial statements are the responsibility of the Company s management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material
respects, the financial position of India Globalization Capital, Inc. as of March 8, 2006 and the
results of its operations and its cash flows for the period from April 29, 2005 (inception) through
March 8, 2006 in conformity with United States generally accepted accounting principles.
GOLDSTEIN GOLUB KESSLER LLP
India Globalization Capital, Inc.
(a development stage company)
| March 8, 2006 | ||||
| ASSETS | ||||
| Current Assets: | ||||
| Cash | $ | 567,798 | ||
| Investments held in Trust Fund | 63,845,850 | |||
| Investments held in trust from Underwriters | 1,769,400 | |||
| Prepaid expenses | 81,667 | |||
| Total Assets | $ | 66,264,715 | ||
| LIABILITIES AND STOCKHOLDERS EQUITY | ||||
| Current Liabilities: | ||||
| Accrued expenses | $ | 804,951 | ||
| Notes payable to stockholders | 870,000 | |||
| Due to Underwriters | 1,769,400 | |||
| Total current liabilities | 3,444,351 | |||
| Common stock subject to possible conversion, 2,259,770 at conversion value (Note A ) | 12,762,785 | |||
| COMMITMENT | ||||
| STOCKHOLDERS EQUITY | ||||
| Preferred stock $.0001 par value; 1,000,000 shares authorized; none issued and outstanding | ||||
| Common stock $.0001 par value; 75,000,000 shares authorized; issued and outstanding 13,974,500 | ||||
| 1,397 | ||||
| Additional paid-in capital | 50,091,404 | |||
| Deficit accumulated during the development stage | (35,222 | ) | ||
| Total stockholders equity | 50,057,579 | |||
| Total liabilities and stockholders equity | $ | 66,264,715 |
See notes to financial statements
India Globalization Capital, Inc.
( a development stage company)
STATEMENT OF OPERATIONS
| April 29, 2005 | ||||
| (Date of inception) | ||||
| through March 8, 2006 | ||||
| Legal and formation, travel and other start up costs | $ | 35,222 | ||
| Net loss for the period | $ | (35,222 | ) | |
| Net loss per share | $ | (0.01 | ) | |
| Weighted average number of shares outstanding basic and fully diluted | 2,396,152 |
See notes to financial statements
India Globalization Capital, Inc.
(a development stage company)
STATEMENT OF STOCKHOLDERS EQUITY
| Deficit | ||||||||||||||||||||
| Accumulated | ||||||||||||||||||||
| Additional | during the | Total | ||||||||||||||||||
| Common Stock | Paid-in | Development | Stockholders | |||||||||||||||||
| Shares | Amount | Capital | Stage | Equity | ||||||||||||||||
| Issuance of common stock to founders at $.01 per share (1,750,000 shares on May 5, 2005 and 750,000 shares on June 20, 2005) | 2,500,000 | $ | 250 | $ | 24,750 | $ | 25,000 | |||||||||||||
| Surrendered shares (on September 7, 2005 and February 5, 2006 of 62,500 and 137,500 respectively) | (200,000 | ) | (20 | ) | 20 | |||||||||||||||
| Issuance of common stock to founders at $.01 per share on February 5, 2006 | 200,000 | 20 | 1,980 | 2,000 | ||||||||||||||||
| Sale of 170,000 units in a private placement | 170,000 | 17 | 1,019,983 | 1,020,000 | ||||||||||||||||
| Sale of 11,304,500 units, net of underwriters discount and offering expenses (including 2,259,770 shares subject to possible conversion) and $100 from underwriters option. | 11,304,500 | 1,130 | 61,807,456 | 61,808,586 | ||||||||||||||||
| Proceeds subject to possible conversion of shares | (12,762,785 | ) | (12,762,785 | ) | ||||||||||||||||
| Net loss for the period | $ | (35,222 | ) | (35,222 | ) | |||||||||||||||
| Balance at March 8, 2006 | 13,974,500 | $ | 1,397 | $ | 50,091,404 | $ | (35,222 | ) | $ | 50,057,579 |
See notes to financial statements
India Globalization Capital, Inc.
(a development stage company)
STATEMENT OF CASH FLOWS
| April 29, 2005 | ||||
| (Date of Inception) | ||||
| through | ||||
| March 8, 2006 | ||||
| Cash flows from operating activities: | ||||
| Net loss | $ | (35,222 | ) | |
| Adjustment to reconcile net loss to net cash provided (used) by operating activities: | ||||
| Changes in: | ||||
| Accrued expenses | 22,397 | |||
| Net cash used by operating activities | (12,825 | ) | ||
| Cash flows from investing activities: | ||||
| Cash placed in Trust Fund | (65,615,250 | ) | ||
| Cash flows from financing activities: | ||||
| Issuance of common stock to founders | 27,000 | |||
| Payments of offering costs | (3,548,227 | ) | ||
| Proceeds from notes payable to stockholders | 870,000 | |||
| Proceeds from issuance of underwriters option | 100 | |||
| Gross proceeds from initial public offering | 67,827,000 | |||
| Proceeds from private placement | 1,020,000 | |||
| Cash provided by financing activities | 66,195,873 | |||
| Net increase in cash and cash at end of period | $ | 567,798 | ||
| Supplemental schedule of non cash financing activities: | ||||
| Accrual of offering costs | $ | 782,554 | ||
| Accrual of deferred underwriters fees | $ | 1,769,400 |
See notes to financial statements
INDIA GLOBALIZATION CAPITAL, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
NOTE A ORGANIZATION AND BUSINESS OPERATIONS
India Globalization Capital, Inc. (the Company ) was incorporated in Maryland on April 29,
2005. The Company was formed to serve as a vehicle for the acquisition of an operating business in
an unspecified industry located in India through a merger, capital stock exchange, asset
acquisition or other similar business combination. The Company has neither engaged in any
operations nor generated significant revenue to date. The Company is considered to be in the
development stage and is subject to the risks associated with activities of development stage
All activity from April 29, 2005 relates to the Company s formation and initial public offering
described below. The Company has selected March 31 as its fiscal year-end.
The registration statement for the Company s initial public offering (the Public Offering ) (as
described in Note C) was declared effective March 2, 2006. The Company consummated the Public
Offering on March 8, 2006, and preceding the consummation of the Public Offering on March 2, 2006
certain of the officers and directors of the Company purchased an aggregate of 170,000 units from
the Company in a private placement (the Private Placement ). The units sold in the Private
Placement were identical to the units sold in the offering, but the purchasers in the Private
Placement have waived their rights to conversion and receipt of the distribution on liquidation in
the event the Company does not complete a business combination (as described below). The Company
received net proceeds from the Private Placement and the Offering of approximately $62,829,000
The Company s management has broad discretion with respect to the specific application of the net
proceeds of the Private Placement and the Public Offering (together, the Offering ) although
substantially all of the net proceeds of the Offering are intended to be generally applied toward
acquiring one or more operating businesses in an unspecified industry located in India ( Business
Combination ), which may not constitute a business combination for accounting purposes.
Furthermore, there is no assurance that the Company will be able to successfully effect a Business
Combination. Upon the closing of the Offering, approximately ninety-seven percent (97%) of the
gross proceeds of the Public Offering are being held in a trust account ( Trust Fund ) and invested
in government securities until the earlier of (i) the consummation of its first Business
Combination or (ii) the distribution of the Trust Fund as described below. The remaining proceeds,
along with interest earned on the Trust Fund, may be used to pay for business, legal and accounting
due diligence on prospective acquisitions and continuing general and administrative expenses. The
Company, after signing a definitive agreement for the acquisition of a target business, will submit
such transaction for stockholder approval. In the event that holders of 50% or more of the shares
issued in the Offering vote against the
Business Combination or the holders of 20% or more of the shares issued in the Public Offering
elect to exercise their conversion rights, the Business Combination will not be consummated.
However, the persons who were stockholders prior to the Public Offering (the Founding
Stockholders ) will not participate in any liquidation distribution with respect to any shares of
the common stock acquired in connection with or following the Public Offering. (Note G)
In the event that the Company does not consummate a Business Combination within 18 months from the
date of the consummation of the Public Offering, or 24 months from the consummation of the Public
Offering if certain extension criteria have been satisfied (the Acquisition Period ), the proceeds
held in the Trust Fund will be distributed to the Company s public stockholders, excluding the
Founding Stockholders to the extent of their initial stock holdings. In the event of such
distribution, 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 Public Offering (assuming no value is attributed to the warrants contained in the
Units offered in the Public Offering discussed in Note C).
NOTE B- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Loss per share is computed by dividing net loss applicable to common stockholders by the
weighted average number of common shares outstanding for the period. Basic loss per
share is computed by dividing net loss by the weighted-average number of shares of common stock
outstanding during the period. Diluted loss per share gives effect to dilutive options, warrants
and other potential common stock outstanding during the period. Potential common stock has not been