Business Context and Reporting Period
This Form 8-K is filed by Capitol Acquisition Corp. II (not Lindblad Expeditions Holdings, Inc.) on March 13, 2015. The registrant is a special purpose acquisition company (SPAC) incorporated in Delaware, currently seeking a business combination.
Key Financial Metrics
The filing does not provide standard financial metrics such as revenue, profit, cash flow, or operating margins. The document reports a specific financing event:
- Debt Issuance: The Company issued two convertible promissory notes totaling $20,000.
- Lenders: Richard C. Donaldson and Piyush Sodah, both members of the Company's board of directors.
- Terms: The notes are unsecured, non-interest bearing, and payable only upon the consummation of a Business Combination.
- Conversion: Upon a Business Combination, the principal may be converted into warrants at $1.00 per warrant. Full conversion would yield 20,000 warrants.
- Liquidity Impact: If no Business Combination occurs, the notes are forgiven unless funds are available outside the trust account.
Material Changes
The filing discloses the creation of a direct financial obligation and the unregistered sale of equity securities (via the convertible notes). There are no reported changes to revenue or operating performance as the Company is in the pre-business combination phase.
Guidance, Outlook, and Risks
Management Commentary: The issuance was made to evidence loans from directors to support the Company's operations pending a merger or acquisition.
Risks and Contingencies:
- Repayment Risk: The Company is not obligated to repay the principal if a Business Combination is not consummated, except to the extent of funds available outside the trust account.
- Equity Dilution: Conversion of the notes could result in the issuance of 20,000 new warrants.
- Regulatory Exemption: The issuance relied on Section 4(2) of the Securities Act of 1933 as an exemption from registration.
Investor Verification Checklist
- Verify the identity of the registrant (Capitol Acquisition Corp. II) versus the metadata label (Lindblad Expeditions Holdings, Inc.).
- Confirm the status of the Company's trust account and available funds outside the trust.
- Review the terms of the initial public offering warrants to compare with the new non-redeemable warrants issued to directors.
- Monitor for the announcement of a definitive Business Combination agreement.