Filing summary
Issuer and period: The supplied filing is Hennessy Capital Acquisition Corp.’s unaudited Form 10-Q for the quarter ended March 31, 2014—not a Blue Bird Corp. filing. Hennessy Capital was a development-stage blank-check company seeking a business combination; it had not commenced operations. Dollar amounts below are rounded to the nearest thousand unless stated otherwise.
Financial results and position
| Metric | Three months ended March 31, 2014 | At March 31, 2014 |
|---|---|---|
| Revenue | $0 | — |
| General and administrative expense / net loss | $132,000 / $(132,000) | — |
| Basic and diluted loss per share | $(0.04) | — |
| Cash outside Trust Account | — | $1.025 million |
| Cash in Trust Account | — | $115.0 million |
| Total assets | — | $116.088 million |
| Total liabilities | — | $3.810 million |
| Redeemable shares classified outside permanent equity | — | 10,727,797 shares, approximately $10 per share |
Operating cash use was $123,000. Financing activities provided $116.146 million, largely from the January public offering and sponsor warrant placement; $115 million was deposited into the Trust Account. The company reported no long-term debt or off-balance-sheet financing arrangements. It had $72,000 of accounts payable and accrued liabilities, and no related-party note payable remained outstanding.
Changes and capital structure
- The company completed its IPO on January 23, 2014, selling 11.5 million units at $10 each for $115 million gross proceeds. Each unit included one common share and one warrant.
- The sponsor separately purchased 12.125 million private placement warrants for approximately $6.063 million.
- Compared with December 31, 2013, cash increased from $2,000 to $1.025 million, total assets rose from $348,000 to $116.088 million, and liabilities rose from $323,000 to $3.810 million, including $3.738 million of deferred underwriting compensation payable only if a business combination is completed.
- The company recorded $132,000 of net loss in both the quarter and the period from inception through March 31, 2014; there is no earlier comparable operating quarter presented.
Outlook, risks, and notable terms
- Management was seeking and evaluating acquisition candidates and stated it believed funds were sufficient to complete a business combination within the required period. No operating revenue was expected before a combination.
- The company had 21 months from the January 23, 2014 IPO closing to complete a combination, extendable to 24 months if it had signed a qualifying agreement within the first 21 months. If no deal is completed, public shares are to be redeemed from the Trust Account, subject to the filing’s terms.
- A target or targets must have aggregate fair market value of at least 80% of the Trust Account balance, less specified amounts, when a definitive agreement is signed. Public shareholders may have redemption rights in connection with a transaction; redemptions cannot reduce net tangible assets below $5,000,001.
- The $10,000 monthly administrative-services fee is payable to an affiliate of the sponsor and ends at a business combination or liquidation. The filing reported approximately $26,000 of fees for the quarter and $6,000 payable at quarter-end.
- Trust funds were held in a commercial checking account at March 31, 2014; management stated it believed there was no material interest-rate risk at that date. The filing notes the risks of failing to complete a combination and that liquidation proceeds could be below the IPO price.
- No material changes to previously disclosed risk factors, legal proceedings, or reportable subsequent events were identified. Management concluded disclosure controls were effective and reported no material change in internal control over financial reporting.
Investor facts to verify
- Confirm issuer identity: the supplied document names Hennessy Capital Acquisition Corp., despite the request metadata naming Blue Bird Corp.
- Check subsequent filings for any business-combination agreement, closing, deadline extension, or liquidation, and for updated Trust Account balances and redemption terms.
- Verify the treatment and amount of the deferred underwriting fee, public-share redemptions, and outstanding public and private warrants in any transaction.
- Review the prospectus risk factors referenced by this 10-Q and related-party administrative-services arrangements.