Filing summary
Entity mismatch: The supplied filing is for 1347 Capital Corp., a blank-check company, not Limbach Holdings, Inc. It reports the fiscal year ended December 31, 2015; it does not provide standalone fourth-quarter results.
Business context and reporting period
1347 Capital was formed to acquire one or more operating businesses. As of December 31, 2015, it had not begun operations or identified a definitive acquisition target; its activities were formation, public-company administration, and searching for a business combination. The 2015 financial statements were audited by BDO, which issued an unmodified opinion and highlighted substantial doubt about the company’s ability to continue as a going concern if it does not complete a business combination by its deadline.
Financial results and liquidity
| Metric | FY 2015 / Dec. 31, 2015 | Comparable period / Dec. 31, 2014 |
|---|---|---|
| Revenue | $0 | $0 |
| Net loss | $339,604 | $189,755 loss, from inception on April 15, 2014 |
| Basic and diluted loss per share | $0.18 | $0.12 |
| Cash and cash equivalents outside trust | $119,826 | $397,387 |
| Trust assets | $46,059,918 | $46,008,549 |
| Total assets | $46,199,240 | $46,478,415 |
| Total liabilities | $255,283 | $194,854 |
| Stockholders’ equity | $5,000,067 | $5,283,571 |
| Cash used in operating activities | $226,192 | $192,380 |
FY 2015 general and administrative costs were $390,974, offset by $49,749 of interest income and $1,621 of realized investment gains. The trust held $45,909,478 in U.S. Treasury bills and $150,440 in cash. The company reported no long-term debt or off-balance-sheet arrangements; current liabilities included a $125,000 non-interest-bearing sponsor loan and $130,283 of accounts payable and accrued expenses. No operating margin is meaningful because the company had no revenue.
Changes, outlook, risks, and unusual items
- Net loss increased from the 2014 inception-period loss, while outside-trust cash fell from $397,387 to $119,826. The 2014 comparison covers only April 15 through December 31, not a full year.
- Management estimated approximately $150,000 of working-capital needs to operate through the remaining term and listed anticipated expenses, including about $58,424 for target search and due diligence, $40,000 for Nasdaq listing, and $35,000 for affiliate administrative services. These are estimates, not guarantees of funding adequacy.
- The company had entered into a letter of intent, extending its business-combination period to 24 months after the offering. The filing gives July 15, 2016 as the deadline in some sections; Nasdaq’s March 7, 2016 continued-listing terms required completion by July 7, 2016 and evidence of at least 300 round-lot shareholders by August 7, 2016. The differing dates should be checked against the underlying documents.
- Failure to complete a business combination would require winding up and redeeming public shares; rights and warrants would expire worthless. Third-party or bankruptcy claims could reduce trust distributions. The company also warned of limited working capital, possible need for financing, dilution or debt, redemption-related funding constraints, conflicts of interest, and Nasdaq listing risk.
- The company paid an affiliate $10,000 monthly for administrative services and owed EarlyBirdCapital a $1,610,000 fee upon a completed business combination, subject to possible allocation of part of the fee to other advisors.
- Management reported effective disclosure controls and internal control over financial reporting. The auditor did not audit internal-control effectiveness; the company relied on an emerging-growth-company exemption.
Most important facts to verify
- Confirm the intended issuer: this filing is for 1347 Capital Corp., not Limbach Holdings, Inc.
- Confirm the applicable business-combination deadline and Nasdaq’s listing conditions, given the July 7 and July 15 dates in the filing.
- Review the trust balance, redemption terms, and any creditor claims that could affect public shareholders’ recoveries.
- Assess whether cash outside the trust and expected trust interest were sufficient to fund remaining operating and transaction costs.
- Review the related-party arrangements, EarlyBirdCapital fee, potential share dilution, and sponsor-loan repayment or conversion terms.