Business context and reporting period
Period: Three and six months ended June 30, 2013; financial statements are unaudited. The filing is for Committed Capital Acquisition Corporation, a development-stage blank-check/SPAC company—not ONE Group Hospitality, Inc. The filing states it had no operating business or revenue and was searching for an acquisition target.
On July 19, 2013, after quarter-end, the company announced a non-binding letter of intent with a private company. It had until October 24, 2013 to complete a business combination.
Financial results and condition
| Metric | Q2 2013 / June 30, 2013 | Comparable period / prior balance |
|---|---|---|
| Revenue | $0 | $0 in Q2 2012 |
| Net loss | $112,000 for Q2; $218,000 for six months | $91,000 for Q2 2012; $146,000 for six months 2012 |
| Operating expenses | $116,000 for Q2; $228,000 for six months | $102,000 for Q2 2012; $158,000 for six months 2012 |
| Trust interest income | $4,000 for Q2; $10,000 for six months | $11,000 for Q2 2012; $12,000 for six months 2012 |
| Total assets | $28.801 million | $28.802 million at December 31, 2012 |
| Trust account | $28.790 million | $28.780 million at December 31, 2012 |
| Current liabilities | $1.445 million | $1.228 million at December 31, 2012 |
| Cash and working capital | Cash: $0; current assets: $11,000 | Cash: $0; current assets: $22,000 at December 31, 2012 |
| Operating cash flow | $10,000 for six months | $12,000 for six months 2012 |
| Stockholders’ equity | $27.356 million | $27.574 million at December 31, 2012 |
The company had no revenue, so operating margins are not meaningful. Its six-month net loss widened year over year as expenses increased and trust interest income declined. The positive operating cash flow reflected changes in payables and accrued liabilities, rather than revenue generation.
Current liabilities included $759,000 of non-interest-bearing advances and a $120,000 non-interest-bearing note payable to related party Broadband Capital Management LLC (BCM), plus accrued liabilities and franchise taxes. The related-party amounts are payable upon completion of a business combination. The company reported approximately $356,000 of accrued franchise taxes and stated that 2011 and 2012 state franchise taxes remained unpaid.
Outlook, risks, and unusual items
- Management expected higher 2013 expenses related to acquisition activity and anticipated continuing losses until, at the earliest, completion of a business combination.
- BCM agreed to provide expense advances up to $800,000, including amounts already advanced, but could decline further funding. The filing says the company could not assure it would meet cash requirements for at least the next twelve months.
- If no business combination was completed by October 24, 2013, the company was required to cease operations and redeem public shares from the trust account, subject to stated deductions, followed by liquidation. Management disclosed substantial doubt about the company’s ability to continue as a going concern if the transaction was not completed.
- The announced letter of intent was non-binding; completion, financing needs, and transaction terms remained uncertain. The company planned a concurrent private placement of 2 million shares at $5 per share, potentially generating $10 million gross, subject to closing.
- Trust funds were restricted for specified purposes and invested in a qualifying institutional money-market account. The company said it had no off-balance-sheet arrangements and no material pending legal proceedings. It disclosed arrangements under which amounts could become payable upon a business combination, but none had been billed as of June 30.
Important facts to verify
- Confirm the issuer: this filing is for Committed Capital Acquisition Corporation, not ONE Group Hospitality, Inc.
- Check whether the July 19, 2013 non-binding letter of intent advanced to a definitive agreement and whether a transaction closed by the October 24 deadline.
- Verify the trust balance available for redemption, permitted deductions, and any working-capital releases.
- Confirm BCM advances, unpaid franchise taxes, and the availability of additional funding.
- Review subsequent filings for any change in the company’s business, liquidity, or going-concern status.