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CLACU > SEC Filings for CLACU > Form 10-Q on 24-Jun-2013All Recent SEC Filings




Quarterly Report

Item 2. Management's Discussion and Analysis.

Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "could," "would," "expect," "plan," "anticipate," "believe," "estimate," "continue," or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission ("SEC") filings. References to "we", "us", "our" or the "Company" are to Capitol Acquisition Corp. II, except where the context requires otherwise. The following discussion should be read in conjunction with our condensed financial statements and related notes thereto included elsewhere in this report.


We are a blank check company in the development stage, formed on August 9, 2010 to acquire, through a merger, share exchange, asset acquisition, stock purchase, plan of arrangement, recapitalization, reorganization or other similar business combination, one or more businesses or entities. We do not have any specific initial business transaction under consideration, but we are actively searching for a target business.

We presently have no revenue, have had losses since inception from incurring formation costs and have no other operations other than the active solicitation of a target business with which to complete a business combination. We have relied upon the sale of our securities and loans from our officers and directors to fund our operations.

The registration statement for our initial public offering was declared effective on May 9, 2013. On May 10, 2013, we filed a new registration statement to increase the size of the initial public offering by 20% pursuant to Rule 462(b) under the Securities Act of 1933, as amended. On May 15, 2013, we consummated the offering and received proceeds net of the underwriter's discount and other offering expenses of $194,400,000 and simultaneously received $5,600,000 from the issuance of 5,600,000 warrants ("Sponsors' Warrants") in a private placement (the "Private Placement"). Our management has broad discretion with respect to the specific application of the net proceeds of the offering and the Private Placement, although substantially all of the net proceeds are intended to be applied generally towards consummating a business combination successfully.

Results of Operations

Our entire activity since inception up to the closing of our initial public offering on May 15, 2013 was in preparation for that event. Since the offering, our activity has been limited to the evaluation of business combination candidates, and we will not be generating any operating revenues until the closing and completion of our initial business combination. We expect to generate small amounts of non-operating income in the form of interest income on cash and cash equivalents. Interest income is not expected to be significant in view of current low interest rates on risk-free investments (treasury securities). We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. We expect our expenses to increase substantially after this period.

For the three months ended March 31, 2013 and 2012 and for the period from August 9, 2010 (inception) through March 31, 2013, we had net losses of $4,400, $568, and $11,645, respectively, which consist of formation and operating costs. We incurred offering costs of $210,289 with regard to the offering, which are classified as deferred offering costs on the balance sheet as of March 31, 2013.

Liquidity and Capital Resources

As of March 31, 2013, we have cash of $1,047. Until the initial public offering, as described above, our only source of liquidity were the proceeds from the sales of common stock to our initial stockholders and the loan and advances made by an entity controlled by our Chief Executive Officer. As of March 31, 2013, we owed this entity a $150,000 note payable and an additional $6,906 for other advances. These amounts were fully repaid with the consummation of the initial public offering. Accounts payable and accrued expenses as of March 31, 2013, consists of various costs related to the offering.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of March 31, 2013.

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