Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 30, 2019 | |
Entity Registrant Name | NESCO HOLDINGS, INC. | |
Entity Central Index Key | 0001709682 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2019 | |
Entity Current reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity shell Company | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Common Stock Shares Outstanding | 50,312,500 | |
Entity File Number | 001-38186 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State Country Code | DE |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Current Assets | ||
Cash | $ 83,606 | $ 468,253 |
Prepaid expenses and other current assets | 10,314 | 1,343 |
Total Current Assets | 93,920 | 469,596 |
Cash and marketable securities held in Trust Account | 412,052,878 | 407,727,618 |
Total Assets | 412,146,798 | 408,197,214 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Current liabilities - Accounts payable and accrued expenses | 206,272 | 90,875 |
Total Current Liabilities | 206,272 | 90,875 |
Convertible promissory notes - related parties | 950,000 | |
Deferred underwriting fee | 14,087,500 | 14,087,500 |
Total Liabilities | 15,243,772 | 14,178,375 |
Commitments | ||
Common Stock, subject to possible redemption, 38,271,779 and 38,402,649 shares at redemption value as of June 30, 2019 and December 31, 2018, respectively | 391,903,017 | 389,018,834 |
Stockholders’ Equity | ||
Preferred Stock, $0.0001 par value; 5,000,000 authorized; none issued and outstanding | ||
Common Stock, $0.0001 par value; 250,000,000 shares authorized; 12,040,721 and 11,909,851 shares issued and outstanding (excluding 38,271,779 and 38,402,649 shares subject to possible redemption) as of June 30, 2019 and December 31, 2018, respectively | 1,204 | 1,191 |
Additional paid-in capital | 602,318 | |
Retained earnings | 4,998,805 | 4,396,496 |
Total Stockholders' Equity | 5,000,009 | 5,000,005 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 412,146,798 | $ 408,197,214 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized | 5,000,000 | 5,000,000 |
Preferred stock, issued | ||
Preferred stock, outstanding | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 250,000,000 | 250,000,000 |
Common stock, issued | 12,040,721 | 11,909,851 |
Common stock, outstanding | 12,040,721 | 11,909,851 |
Common stock, subject to possible redemption | 38,271,779 | 38,402,649 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | ||
Income Statement [Abstract] | |||||
Operating costs | $ 904,919 | $ 491,575 | $ 1,441,073 | $ 904,819 | |
Loss from operations | (904,919) | (491,575) | (1,441,073) | (904,819) | |
Other income: | |||||
Interest income | 2,050,569 | 1,513,001 | 4,325,260 | 2,880,438 | |
Unrealized loss on marketable securities held in Trust Account | (24,491) | (1,181) | |||
Net income | $ 1,121,159 | $ 1,020,245 | $ 2,884,187 | $ 1,975,619 | |
Weighted average shares outstanding, basic and diluted | [1] | 11,962,955 | 11,909,282 | 11,936,550 | 11,918,596 |
Basic and diluted net (loss) income per common share | [2] | $ (0.07) | $ 0.02 | $ (0.1) | $ 0 |
[1] | Excludes an aggregate of up to 38,271,779 and 38,390,098 shares subject to possible redemption at June 30, 2019 and 2018, respectively. | ||||
[2] | Net income (loss) per commonshare - basic and diluted excludes income attributable to common stock subject to possible redemption of $1,926,598 and $726,624 for the three months ended June 30, 2019 and 2018, respectively, and $4,112,890 and $2,032,012 for the six months ended June 30, 2019 and 2018, respectively. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
Excludes an aggregate shares subject to redemption | 38,271,779 | 38,390,098 | ||
Net income (loss) per common share - income excluded from basic and diluted | $ 1,926,598 | $ 726,624 | $ 4,112,890 | $ 2,032,012 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Common Stock | Additional Paid in Capital | (Accumulated Deficit)/Retained Earnings | Total |
Balance at Dec. 31, 2017 | $ 1,193 | $ 5,776,280 | $ (777,471) | $ 5,000,002 |
Balance, shares at Dec. 31, 2017 | 11,928,013 | |||
Change in value of common stock subject to possible redemption | $ (2) | (955,372) | (955,374) | |
Change in value of common stock subject to possible redemption, shares | (18,731) | |||
Net income | 955,374 | 955,374 | ||
Balance at Mar. 31, 2018 | $ 1,191 | 4,820,908 | 177,903 | 5,000,002 |
Balance, shares at Mar. 31, 2018 | 11,909,282 | |||
Change in value of common stock subject to possible redemption | $ 1 | (1,020,243) | (1,020,242) | |
Change in value of common stock subject to possible redemption, shares | 13,120 | |||
Net income | 1,020,245 | 1,020,245 | ||
Balance at Jun. 30, 2018 | $ 1,192 | 3,800,665 | 1,198,148 | 5,000,005 |
Balance, shares at Jun. 30, 2018 | 11,922,402 | |||
Balance at Dec. 31, 2018 | $ 1,191 | 602,318 | 4,396,496 | 5,000,005 |
Balance, shares at Dec. 31, 2018 | 11,909,851 | |||
Change in value of common stock subject to possible redemption | $ 5 | (602,318) | (1,160,716) | (1,763,029) |
Change in value of common stock subject to possible redemption, shares | 53,104 | |||
Net income | 1,763,028 | 2,884,187 | ||
Balance at Mar. 31, 2019 | $ 1,196 | 4,998,808 | 5,000,004 | |
Balance, shares at Mar. 31, 2019 | 11,962,955 | |||
Change in value of common stock subject to possible redemption | $ 8 | (1,121,162) | (1,121,154) | |
Change in value of common stock subject to possible redemption, shares | 77,766 | |||
Net income | 1,121,159 | 1,121,159 | ||
Balance at Jun. 30, 2019 | $ 1,204 | $ 4,998,805 | $ 5,000,009 | |
Balance, shares at Jun. 30, 2019 | 12,040,721 |
Condensed Consolidated Statem_4
Condensed Consolidated Statement of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash Flows from Operating Activities: | ||
Net income | $ 2,884,187 | $ 1,975,619 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Interest earned on marketable securities held in Trust Account | (4,325,260) | (2,880,438) |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | (8,971) | 43,017 |
Accounts payable and accrued expenses | 115,397 | 4,200 |
Net cash used in operating activities | (1,334,647) | (857,602) |
Cash Flows from Investing Activities: | ||
Cash withdrawn from the Trust Account | 750,000 | |
Net cash provided by investing activities | 750,000 | |
Cash Flows from Financing Activities: | ||
Proceeds from convertible promissory notes - related parties | 950,000 | |
Net cash provided by financing activities | 950,000 | |
Net Change in Cash | (384,647) | (107,602) |
Cash - Beginning | 468,253 | 501,925 |
Cash - Ending | 83,606 | 394,323 |
Non-Cash Investing and Financing Activities: | ||
Change in value of common stock subject to possible redemption | $ 2,884,183 | $ 1,975,616 |
Organization and Plan of Busine
Organization and Plan of Business Operations | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Plan of Business Operations | Note 1 — Organization and Plan of Business Operations Nesco Holdings, Inc. (the "Company") was originally incorporated in the Cayman Islands on May 1, 2017 under the name "Capitol Investment Corp. IV" as a blank check company whose objective is to acquire, through a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination, one or more businesses or entities (a "Business Combination"). On July 30, 2019, in connection with the proposed transaction with Nesco Holdings I, Inc. ("Nesco") described below, the Company deregistered under the Cayman Islands Companies Law and domesticated under Section 388 of the Delaware General Corporation Law, pursuant to which the Company's jurisdiction of incorporation was changed from the Cayman Islands to the State of Delaware (the "Domestication"). At such time, the Company filed a certificate of incorporation in the State of Delaware changing the Company's name to "Nesco Holdings, Inc." and changing the authorized capital of the Company from 400,000,000 authorized Class A ordinary shares, 50,000,000 authorized Class B ordinary shares, and 1,000,000 authorized preference shares to 250,000,000 authorized shares of common stock, and 5,000,000 authorized shares of preferred stock. All references to ordinary shares, preference shares and similar terms have been retroactively restated to reflect common stock, preferred stock and similar terms used under Delaware law and in the Company's certificate of incorporation. All activity through June 30, 2019 relates to the Company's formation, the Company's initial public offering of 40,250,000 units (the "Offering"), the simultaneous sale of 6,533,333 warrants (the "Private Placement Warrants") in a private placement (the "Private Placement") to Capitol Acquisition Management IV LLC and Capitol Acquisition Founder IV LLC (collectively, the "Sponsors"), entities affiliated with the Company's executive officers, and the Company's directors, the Company's search for a target business with which to complete a Business Combination and activities in connection with the proposed Business Combination with Nesco, as described in Note 6. The Company has three subsidiaries, Capitol Intermediate Holdings, LLC, a wholly-owned subsidiary of the Company incorporated in Delaware on March 19, 2019 ("Intermediate Holdings"), Capitol Investment Merger Sub 1, LLC, a wholly-owned subsidiary of the Company incorporated in Delaware on March 18, 2019 ("Merger Sub") and Capitol Investment Merger Sub 2, LLC, a wholly-owned subsidiary of the Company incorporated in Delaware on March 18, 2019 ("New HoldCo"). Liquidity The Company has principally financed its operations from inception using proceeds from the sale of its equity securities to its stockholders prior to the Offering and such amount of proceeds from the Offering that were placed in an account outside of the Trust Account for working capital purposes. As of June 30, 2019, the Company had $83,606 held outside of the Trust Account. In March and May 2019, the Sponsors and Lawrence Calcano, Brooke Coburn and Richard C. Donaldson, each a member of the board of directors of the Company (collectively, the "Lenders"), loaned the Company an aggregate of $950,000. In July 2019, the Lenders loaned the Company an additional $550,000. Based on the foregoing, the Company believes it will have sufficient cash to meet its needs through the earlier of consummation of a Business Combination or August 21, 2019, the deadline to complete a Business Combination pursuant to the Company's amended and restated memorandum and articles of association (unless otherwise amended by stockholders). |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Note 2 — Significant Accounting Policies Basis of presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission ("SEC"). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company's Annual Report on Form 10-K Form 10-K Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Use of estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the condensed consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from the Company's estimates. Cash and marketable securities held in Trust Account At June 30, 2019 the assets held in the Trust Account were held in cash and at December 31, 2018, the assets held in the Trust Account were held in U.S. Treasury Bills. Net income (loss) per common share Net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding for the period. The Company applies the two-class method in calculating earnings per share. Shares of common stock subject to possible redemption at June 30, 2019 and 2018, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic income (loss) per share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not considered the effect of warrants sold in the Offering and the Private Placement to purchase 19,950,000 shares of common stock, in the calculation of diluted income (loss) per share, since the exercise of the warrants is contingent upon the occurrence of future events. As a result, diluted income (loss) per share is the same as basic income (loss) per share for the periods presented. Reconciliation of net income (loss) per common share The Company's net income is adjusted for the portion of income that is attributable to shares of common stock subject to possible redemption, as these shares only participate in the earnings of the Trust Account and not the income or losses of the Company. Accordingly, basic and diluted income (loss) per share is calculated as follows: Three Months Ended June 30, Six Months Ended 2019 2018 2019 2018 Net income $ 1,121,159 $ 1,020,245 $ 2,884,187 $ 1,975,619 Less: Income attributable to common stock subject to possible redemption (1,926,598 ) (726,624 ) (4,112,890 ) (2,032,012 ) Adjusted net income (loss) $ (805,439 ) $ 293,621 $ (1,228,703 ) $ (56,393 ) Weighted average shares outstanding, basic and diluted 11,962,955 11,909,282 11,936,550 11,918,596 Basic and diluted net income (loss) per common share $ (0.07 ) $ 0.02 $ (0.10 ) $ (0.00 ) Recent accounting pronouncements Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company's condensed consolidated financial statements. |
Convertible Promissory Notes
Convertible Promissory Notes | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Convertible Promissory Notes | Note 3 — Convertible Promissory Notes On March 22, 2019 and May 7, 2019, the Company issued an aggregate of $950,000 of convertible promissory notes to the Lenders. On July 29, 2019, the Company issued an aggregate of $550,000 of convertible promissory notes to the Lenders (see Note 8). The loans are unsecured, non-interest bearing and are payable at the consummation by the Company of a Business Combination. Upon consummation of a Business Combination, the principal balance of the notes may be converted, at the holders’ option, to warrants at a price of $1.50 per warrant (subject to compliance with the terms of the Merger Agreement (defined in Note 7 below) which restricts the Company’s ability to convert such notes to warrants except in certain cases). The terms of the warrants would be identical to the Private Placement Warrants. If the Lenders convert the entire principal balance of the convertible promissory notes, they would receive warrants to purchase an aggregate of 1,000,000 shares of common stock of the Company. If a Business Combination is not consummated, the notes will not be repaid by the Company and all amounts owed thereunder by the Company will be forgiven except to the extent that the Company has funds available to it outside of its Trust Account. |
Administrative Services Agreeme
Administrative Services Agreement | 6 Months Ended |
Jun. 30, 2019 | |
Administrative Services Agreement [Abstract] | |
Administrative Services Agreement | Note 4 — Administrative Services Agreement The Company presently occupies office space provided by two affiliates of the Company's executive officers. Such affiliates have agreed that, until the Company consummates a Business Combination, they will make such office space, as well as certain office and secretarial services, available to the Company, as may be required by the Company from time to time. The Company commenced paying such affiliates an aggregate of up to $20,000 per month for such services on August 15, 2017. For the three and six months ended June 30, 2019 and 2018, the Company incurred $60,000 and $120,000 in fees for these services, respectively. At June 30, 2019 and December 31, 2018, $0 and $10,000, respectively, in administrative fees are included in accounts payable and accrued expenses in the accompanying condensed balance sheets. |
Commitments
Commitments | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Note 5 — Commitments The underwriters of the Offering were originally entitled to a deferred fee of three and one-half percent (3.5%) of the gross proceeds of the Offering, or $14,087,500. In connection with the amendment of the Merger Agreement on July 10, 2019, as defined and described in Notes 6 and 8, Capitol and Nesco reached agreements with their underwriters and financial advisors, reducing fees payable to such parties at the close of the Merger, including the deferred fee to the underwriters, by approximately $10 million in the aggregate. The deferred fee will be paid in cash upon the closing of a Business Combination from the amounts held in the Trust Account, subject to the terms of the underwriting agreement executed in connection with the Offering. The Company’s stockholders prior to the Offering (the “Initial Stockholders”), the holders of the Private Placement Warrants (and underlying shares of common stock) and the holders of any warrants (and underlying shares of common stock) issued upon conversion of working capital loans made by the Company’s Sponsors, officers, directors or their affiliates, if any such warrants are issued, are entitled to registration rights with respect to their securities pursuant to an agreement dated as of August 15, 2017. The holders of the majority of the securities are entitled to demand that the Company register these securities at any time commencing after expiration of the transfer restrictions. In addition, the holders have certain “piggy-back” registration rights on registration statements filed after the Company’s consummation of a Business Combination. Subsequent to the consummation of the Offering, the Company entered into four consulting arrangements for services to help identify and introduce the Company to potential targets and provide assistance with due diligence, deal structuring, documentation and obtaining stockholder approval for a Business Combination in addition to certain executive assistant services. These agreements provide for aggregate annual fees of approximately $661,000 and aggregate success fees of $1,090,000 payable upon the consummation of a Business Combination. |
Merger Agreement
Merger Agreement | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Merger Agreement | Note 6 — Merger Agreement On April 7, 2019, the Company entered into an Agreement and Plan of Merger ("Merger Agreement"), as amended (see Note 8), by and among the Company, Capitol Intermediate Holdings, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company ("Intermediate Holdings"), Capitol Investment Merger Sub 1, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company ("Merger Sub"), Capitol Investment Merger Sub 2, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company ("New HoldCo"), NESCO Holdings, LP, a Delaware limited partnership (the "Nesco Owner"), and Nesco. Pursuant to the Merger Agreement, (i) the Company was to domesticate as a Delaware corporation and be renamed "Nesco Holdings, Inc." (the "Domestication"), (ii) Merger Sub will merge with and into Nesco, with Nesco surviving as a wholly-owned subsidiary of the Company (the "Initial Merger"), and (iii) immediately after the Initial Merger, Nesco will merge with and into New HoldCo, with New HoldCo surviving as an indirect wholly-owned subsidiary of the Company (the "Subsequent Merger", and together with the Initial Merger, the "Mergers", and together with the Domestication and the other transactions contemplated by the Merger Agreement, the "Transactions"). As a result of the Transactions, Nesco will become a limited liability company and a wholly-owned subsidiary of the Company, with Nesco Owner becoming a securityholder of the Company. The Domestication took effect on July 30, 2019. Under the Merger Agreement as originally executed, Nesco Owner was to receive (i) $75,000,000 of cash (subject to adjustment), (ii) 17,464,235 shares of common stock and (iii) warrants to purchase 2,500,000 shares of common stock. Nesco Owner was also to have the right to receive up to 1,800,000 additional shares of common stock, for a period of five years following the closing of the Transactions, in increments of 900,000 shares, if (x) the trading price of the Company's common stock exceeds $13.00 per share or $16.00 per share for any 20 trading days during a 30 consecutive trading day period or (y) a sale transaction of the combined company occurs in which the consideration paid per share to holders of common stock of the combined company exceeds $13.00 per share or $16.00 per share. On July 10, 2019, the terms of the Merger Agreement were amended as described in Note 8 below. In connection with the Domestication, (i) each outstanding Class A ordinary share of the Company automatically converted into one share of common stock of the Company, (ii) the outstanding warrants of the Company automatically converted into warrants entitling the holders to purchase shares of common stock beginning 30 days after the consummation of the Business Combination and (iii) the outstanding Class B ordinary shares of the Company automatically converted into common stock. In connection with the Transactions, the Initial Stockholders (including Capitol's independent directors) will forfeit a certain number of shares of common stock and warrants of the Company and will subject an additional number of other shares to an additional lockup that will be released upon the achievement of the $13.00 and $16.00 share triggers applicable to Nesco Owner described above. In connection with the execution of the Merger Agreement, New HoldCo executed a commitment letter among New Holdco, JPMorgan Chase Bank, N.A., Fifth Third Bank, Morgan Stanley Senior Funding, Inc., Deutsche Bank AG New York Branch, Deutsche Bank AG Cayman Islands Branch, Deutsche Bank Securities Inc., and Citigroup Global Markets Inc. pursuant to which the lender parties committed to provide the Company with each of (i) $350 million in aggregate principal amount of commitments pursuant to a first lien senior secured asset based revolving credit facility and (ii) $400 million in second lien senior secured increasing rate bridge loans, subject to definitive documentation and certain customary closing conditions and solely to the extent that the Company is unable to issue and sell senior second lien notes in a Rule 144A or other private placement yielding up to $400 million in gross proceeds on or prior to the closing of the Transactions. On July 26, 2019, New HoldCo executed an agreement to sell $475 million of Senior Secured Second Lien Notes due 2024 (the "Notes"). The offering is conditioned upon, and is expected to be consummated concurrently with, the consummation of the transactions contemplated by the Merger Agreement and certain other transactions. The sale of the Notes is also subject to other customary closing conditions. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | Note 7 — Stockholders' Equity Preferred Stock The Company is authorized to issue 5,000,000 shares of preferred stock with a par value of $0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company's board of directors. As of June 30, 2019 and December 31, 2018, there are no shares of preferred stock issued or outstanding. Common Stock The Company is authorized to issue 250,000,000 shares of common stock, with a par value of $0.0001 per share. As of June 30, 2019 and December 31, 2018, there were 12,040,721 and 11,909,851 shares of common stock issued and outstanding, respectively, excluding 38,271,779 and 38,402,649 shares of common stock subject to possible redemption, respectively. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 8 — Subsequent Events The Company evaluates subsequent events and transactions that occur after the balance sheet date up to the date that the condensed consolidated financial statements were issued. Other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements. Convertible Promissory Notes On July 29, 2019, the Company issued an aggregate of $550,000 of convertible promissory notes to the Lenders. The loans are unsecured, non-interest bearing and are payable at the consummation by the Company of a Business Combination. Upon consummation of a Business Combination, the principal balance of the notes may be converted, at the holders' option, to warrants at a price of $1.50 per warrant (subject to compliance with the terms of the Merger Agreement which restricts the Company's ability to convert such notes to warrants except in certain cases). Stockholder Vote On July 16, 2019, the Company held an extraordinary general meeting, pursuant to which the Company's stockholders approved, among others, the following proposals: ● The Company be deregistered under the Cayman Islands Companies Law and domesticate under Section 388 of the Delaware General Corporation Law, pursuant to which the Company's jurisdiction of incorporation will be changed from the Cayman Islands to the State of Delaware ● Adoption of the Merger Agreement, as amended. The number of holders of the Company's common stock exercising their redemption rights in connection with this vote did not result in the Company having less than $5,000,001 of net tangible assets after giving effect to all holders of public shares that redeemed their shares for cash. Holders of 26,091,034 shares of the Company's common stock elected to redeem their shares. Assuming no holder chooses to reverse their redemption election, the amount that will be paid out to redeem such shares will be approximately $267.1 million based on the amount held in trust on June 30, 2019. Amendment to Merger Agreement On July 10, 2019, the Company entered into an amendment (the "Amendment") to the Merger Agreement. Pursuant to the Amendment, the initial enterprise value of the combined company after the Business Combination was reduced by $50 million, to approximately $1,037 million (assuming no redemptions). As a result, the consideration to be issued to Nesco Owner was reduced and the Sponsor agreed to cancel an additional number of its shares, as follows ● Nesco Owner will no longer receive cash consideration in an amount of $75 million, and instead will receive common stock consideration at a price of $10.00 per share, for an aggregate of 7,500,000 shares of common stock, regardless of redemptions; ● excluding the 7,500,000 additional shares referred to above, the aggregate common stock consideration to Nesco Owner was reduced by 3,303,597 shares as Nesco Owner's contribution to the $50 million enterprise value reduction; ● earnout consideration to Nesco Owner was increased by 1,651,798 shares, which additional shares may be earned by Nesco Owner if, from the consummation of the Business Combination until the seventh anniversary thereof, the trading price of the combined company's common stock exceeds $19.00 per share for any period of 20 trading days out of a consecutive 30 trading day period or if a sale transaction of the combined company occurs in which the consideration paid per share to holders of common stock exceeds $19.00 per share; ● an additional (i) 348,201 shares of common stock owned by the Sponsor will be cancelled and (ii) 348,202 shares of common stock owned by the Sponsor will be subject to lock-up and potential forfeiture for the seven-year period following the consummation of the business combination, which risk of forfeiture will lapse if the trading price of the combined company's common stock exceeds $19.00 per share for any period of 20 trading days out of a consecutive 30 trading day period or if a sale transaction of the combined company occurs in which the consideration paid per share to holders of common stock exceeds $19.00 per share; and ● concurrently with the closing of the Business Combination, Nesco Owner or one or more of its affiliates will purchase 2,500,000 newly issued shares of the Company's common stock at a price of $10.00 per share (for gross proceeds to the Company of $25 million), payable in cash. Nesco has also agreed to waive the condition to closing of the Business Combination pursuant to the Merger Agreement that the amount of cash available to the Company upon closing of the Business Combination must not be less than $265 million after giving effect to payment of amounts that the Company will be required to pay to redeeming stockholders, subject to certain other conditions and as long as cash available to the Company after the closing of the Business Combination is not less than $200 million. Subscription Agreements On July 22, 2019, the Company entered into subscription agreements ("Subscription Agreements") with (i) each of Capitol Acquisition Management IV LLC, Capitol Acquisition Founder IV LLC and the other directors of the Company (collectively the "Capitol Purchasers") and (ii) NESCO Holdings, LP ("ECP Purchaser"), an affiliate of Nesco Owner. Pursuant to the Subscription Agreements, the Company will, immediately following the consummation of the Business Combination, sell (i) an aggregate of 1,000,000 shares of common stock of the Company to the Capitol Purchasers at $10.00 per share and (ii) 4,500,000 shares of common stock to the ECP Purchaser at $10.00 per share (2,500,000 shares of which shall be subject to receipt by the ECP Purchaser or its affiliates of at least $25 million in full repayment of certain outstanding indebtedness). Bond Offering On July 26, 2019, New HoldCo executed an agreement to sell $475 million of Notes. The offering is conditioned upon, and is expected to be consummated concurrently with, the consummation of the transactions contemplated by the Merger Agreement and certain other transactions. The sale of the Notes is also subject to other customary closing conditions. Domestication On July 30, 2019, in connection with the proposed transaction with Nesco, the Company effectuated the Domestication pursuant to which the Company deregistered under the Cayman Islands Companies Law and domesticated under Section 388 of the Delaware General Corporation Law, pursuant to which the Company's jurisdiction of incorporation was changed from the Cayman Islands to the State of Delaware. In connection with the Domestication, the Company filed a certificate of incorproation with the State of Delaware pursuant to which, among other things, the Company changed its name from "Capitol Investment Corp. IV" to "Nesco Holdings, Inc." and changed the authorized capital of the Company from 400,000,000 authorized Class A ordinary shares, 50,000,000 authorized Class B ordinary shares, and 1,000,000 authorized preference shares to 250,000,000 authorized shares of common stock, and 5,000,000 authorized shares of preferred stock. The financial statements have been adjusted to retroactively reflect the Domestication and the filing of the certificate of incorporation. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission ("SEC"). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company's Annual Report on Form 10-K Form 10-K |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. |
Use of estimates | Use of estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the condensed consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from the Company's estimates. |
Cash and marketable securities held in Trust Account | Cash and marketable securities held in Trust Account At June 30, 2019 the assets held in the Trust Account were held in cash and at December 31, 2018, the assets held in the Trust Account were held in U.S. Treasury Bills. |
Net income (loss) per common share | Net income (loss) per common share Net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding for the period. The Company applies the two-class method in calculating earnings per share. Shares of common stock subject to possible redemption at June 30, 2019 and 2018, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic income (loss) per share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not considered the effect of warrants sold in the Offering and the Private Placement to purchase 19,950,000 shares of common stock, in the calculation of diluted income (loss) per share, since the exercise of the warrants is contingent upon the occurrence of future events. As a result, diluted income (loss) per share is the same as basic income (loss) per share for the periods presented. |
Reconciliation of net income (loss) per common share | Reconciliation of net income (loss) per common share The Company's net income is adjusted for the portion of income that is attributable to shares of common stock subject to possible redemption, as these shares only participate in the earnings of the Trust Account and not the income or losses of the Company. Accordingly, basic and diluted income (loss) per share is calculated as follows: Three Months Ended June 30, Six Months Ended 2019 2018 2019 2018 Net income $ 1,121,159 $ 1,020,245 $ 2,884,187 $ 1,975,619 Less: Income attributable to common stock subject to possible redemption (1,926,598 ) (726,624 ) (4,112,890 ) (2,032,012 ) Adjusted net income (loss) $ (805,439 ) $ 293,621 $ (1,228,703 ) $ (56,393 ) Weighted average shares outstanding, basic and diluted 11,962,955 11,909,282 11,936,550 11,918,596 Basic and diluted net income (loss) per common share $ (0.07 ) $ 0.02 $ (0.10 ) $ (0.00 ) |
Recent accounting pronouncements | Recent accounting pronouncements Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company's condensed consolidated financial statements. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of basic and diluted income (loss) per ordinary share | Three Months Ended June 30, Six Months Ended 2019 2018 2019 2018 Net income $ 1,121,159 $ 1,020,245 $ 2,884,187 $ 1,975,619 Less: Income attributable to common stock subject to possible redemption (1,926,598 ) (726,624 ) (4,112,890 ) (2,032,012 ) Adjusted net income (loss) $ (805,439 ) $ 293,621 $ (1,228,703 ) $ (56,393 ) Weighted average shares outstanding, basic and diluted 11,962,955 11,909,282 11,936,550 11,918,596 Basic and diluted net income (loss) per common share $ (0.07 ) $ 0.02 $ (0.10 ) $ (0.00 ) |
Organization and Plan of Busi_2
Organization and Plan of Business Operations (Details) - USD ($) | May 01, 2017 | May 01, 2017 | Jul. 31, 2019 | May 31, 2019 | Mar. 31, 2019 | Jun. 30, 2019 | Jul. 30, 2019 | Dec. 31, 2018 |
Organization and Plan of Business Operations (Textual) | ||||||||
Held outside trust account | $ 83,606 | |||||||
Consummated public offering units | 40,250,000 | |||||||
Ordinary shares, authorized | 250,000,000 | 250,000,000 | ||||||
Preferred stock, authorized | 5,000,000 | 5,000,000 | ||||||
Preference shares | 250,000,000 | |||||||
Class A ordinary shares [Member] | ||||||||
Organization and Plan of Business Operations (Textual) | ||||||||
Ordinary shares, authorized | 400,000,000 | 400,000,000 | ||||||
Class B Ordinary shares [Member] | ||||||||
Organization and Plan of Business Operations (Textual) | ||||||||
Ordinary shares, authorized | 50,000,000 | 50,000,000 | ||||||
Preferred stock, authorized | 1,000,000 | 1,000,000 | ||||||
Preference shares | 5,000,000 | |||||||
Directors [Member] | ||||||||
Organization and Plan of Business Operations (Textual) | ||||||||
Loan amount | $ 950,000 | $ 950,000 | ||||||
Private Placement [Member] | ||||||||
Organization and Plan of Business Operations (Textual) | ||||||||
Warrants sold in initial public offering | 6,533,333 | |||||||
Subsequent Event [Member] | ||||||||
Organization and Plan of Business Operations (Textual) | ||||||||
Additional loan | $ 550,000 | |||||||
Ordinary shares, authorized | 400,000,000 | |||||||
Preferred stock, authorized | 5,000,000 | |||||||
Subsequent Event [Member] | Class A ordinary shares [Member] | ||||||||
Organization and Plan of Business Operations (Textual) | ||||||||
Ordinary shares, authorized | 50,000,000 | |||||||
Subsequent Event [Member] | Class B Ordinary shares [Member] | ||||||||
Organization and Plan of Business Operations (Textual) | ||||||||
Ordinary shares, authorized | 250,000,000 | |||||||
Preferred stock, authorized | 1,000,000 |
Significant Accounting Polici_4
Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | ||
Accounting Policies [Abstract] | |||||
Net income | $ 1,121,159 | $ 1,020,245 | $ 2,884,187 | $ 1,975,619 | |
Less: Income attributable to common stock subject to possible redemption | (1,926,598) | (726,624) | (4,112,890) | (2,032,012) | |
Adjusted net income (loss) | $ (805,439) | $ 293,621 | $ (1,228,703) | $ (56,393) | |
Weighted average shares outstanding, basic and diluted | [1] | 11,962,955 | 11,909,282 | 11,936,550 | 11,918,596 |
Basic and diluted net income (loss) per common share | [2] | $ (0.07) | $ 0.02 | $ (0.1) | $ 0 |
[1] | Excludes an aggregate of up to 38,271,779 and 38,390,098 shares subject to possible redemption at June 30, 2019 and 2018, respectively. | ||||
[2] | Net income (loss) per commonshare - basic and diluted excludes income attributable to common stock subject to possible redemption of $1,926,598 and $726,624 for the three months ended June 30, 2019 and 2018, respectively, and $4,112,890 and $2,032,012 for the six months ended June 30, 2019 and 2018, respectively. |
Significant Accounting Polici_5
Significant Accounting Policies (Details Textual) | 6 Months Ended |
Jun. 30, 2019shares | |
Significant Accounting Policies (Textual) | |
Warrants to purchase common stock sold in initial public offering and private placement | 19,950,000 |
Convertible Promissory Notes (D
Convertible Promissory Notes (Details) - USD ($) | May 07, 2019 | Mar. 22, 2019 | Jun. 30, 2019 | Jul. 29, 2019 |
Convertible Promissory Notes (Textual) | ||||
Issuance of convertible promissory notes | $ 950,000 | $ 950,000 | ||
Warrants price per | $ 1.50 | |||
Warrants to purchase common stock | 1,000,000 | |||
Subsequent Event [Member] | ||||
Convertible Promissory Notes (Textual) | ||||
Warrants price per | $ 1.50 | |||
Convertible promissory notes | $ 550,000 |
Administrative Services Agree_2
Administrative Services Agreement (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Aug. 15, 2017 | |
Administrative Services Agreement (Textual) | ||||||
Administrative services fees | $ 60,000 | $ 120,000 | $ 60,000 | $ 120,000 | ||
Paying affiliates for services | $ 20,000 | |||||
Administrative fees | $ 0 | $ 10,000 |
Commitments (Details)
Commitments (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jul. 10, 2019 | |
Commitments (Textual) | ||
Aggregate annual fees | $ 661,000 | |
Aggregate success fees | 1,090,000 | |
Subsequent Event [Member] | ||
Commitments (Textual) | ||
Aggregate merger fees | $ 10,000,000 | |
Deferred fee of three and one-half percent (3.5%) [Member] | ||
Commitments (Textual) | ||
Deferred underwriters discount of public offering | $ 14,087,500 | |
Deferred fee percentage | 3.50% |
Merger Agreement (Details)
Merger Agreement (Details) | 1 Months Ended |
Apr. 07, 2019 | |
Merger Agreement (Textual) | |
Description of debt commitment | Pursuant to which the lender parties committed to provide the Company with each of (i) $350 million in aggregate principal amount of commitments pursuant to a first lien senior secured asset based revolving credit facility and (ii) $400 million in second lien senior secured increasing rate bridge loans, subject to definitive documentation and certain customary closing conditions and solely to the extent that the Company is unable to issue and sell senior second lien notes in a Rule 144A or other private placement yielding up to $400 million in gross proceeds on or prior to the closing of the Transactions. On July 26, 2019, New HoldCo executed an agreement to sell $475 million of Senior Secured Second Lien Notes due 2024 (the "Notes"). |
Description of business combination | (i) each outstanding Class A ordinary share of the Company automatically converted into one share of common stock of the Company, (ii) the outstanding warrants of the Company automatically converted into warrants entitling the holders to purchase shares of common stock beginning 30 days after the consummation of the Business Combination and (iii) the outstanding Class B ordinary shares of the Company automatically converted into common stock upon consummation of the Business Combination. In connection with the Transactions, the Initial Stockholders (including Capitol’s independent directors) will forfeit a certain number of shares of common stock and warrants of the Company and will subject an additional number of other shares to an additional lockup that will be released upon the achievement of the $13.00 and $16.00 share triggers applicable to Nesco Owner described above. |
New HoldCo [Member] | |
Merger Agreement (Textual) | |
Description of merger agreement consideration | (i) $75,000,000 of cash (subject to adjustment), (ii) 17,464,235 shares of common stock and (iii) warrants to purchase 2,500,000 shares of common stock. Nesco Owner was also to have the right to receive up to 1,800,000 additional shares of common stock, for a period of five years following the closing of the Transactions, in increments of 900,000 shares, if (x) the trading price of the Company's common stock exceeds $13.00 per share or $16.00 per share for any 20 trading days during a 30 consecutive trading day period or (y) a sale transaction of the combined company occurs in which the consideration paid per share to holders of common stock of the combined company exceeds $13.00 per share or $16.00 per share. On July 10, 2019, the terms of the Merger Agreement were amended as described in Note 8 below. |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Stockholders' Equity (Textual) | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized | 5,000,000 | 5,000,000 |
Preferred stock, issued | ||
Preferred stock, outstanding | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 250,000,000 | 250,000,000 |
Common stock, issued | 12,040,721 | 11,909,851 |
Common stock, outstanding | 12,040,721 | 11,909,851 |
Common stock, subject to possible redemption | 38,271,779 | 38,402,649 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Jul. 26, 2019 | Jul. 22, 2019 | Jul. 16, 2019 | Jul. 10, 2019 | Apr. 07, 2019 | Jul. 30, 2019 | Jul. 29, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | May 01, 2017 |
Subsequent Events (Textual) | ||||||||||
Warrants price per | $ 1.50 | |||||||||
Description of business combination | (i) each outstanding Class A ordinary share of the Company automatically converted into one share of common stock of the Company, (ii) the outstanding warrants of the Company automatically converted into warrants entitling the holders to purchase shares of common stock beginning 30 days after the consummation of the Business Combination and (iii) the outstanding Class B ordinary shares of the Company automatically converted into common stock upon consummation of the Business Combination. In connection with the Transactions, the Initial Stockholders (including Capitol’s independent directors) will forfeit a certain number of shares of common stock and warrants of the Company and will subject an additional number of other shares to an additional lockup that will be released upon the achievement of the $13.00 and $16.00 share triggers applicable to Nesco Owner described above. | |||||||||
Ordinary shares, authorized | 250,000,000 | 250,000,000 | ||||||||
Preferred stock, authorized | 5,000,000 | 5,000,000 | ||||||||
Class A ordinary shares [Member] | ||||||||||
Subsequent Events (Textual) | ||||||||||
Ordinary shares, authorized | 400,000,000 | |||||||||
Class B Ordinary shares [Member] | ||||||||||
Subsequent Events (Textual) | ||||||||||
Ordinary shares, authorized | 50,000,000 | |||||||||
Preferred stock, authorized | 1,000,000 | |||||||||
Subsequent Event [Member] | ||||||||||
Subsequent Events (Textual) | ||||||||||
Convertible promissory notes | $ 550,000 | |||||||||
Warrants price per | $ 1.50 | |||||||||
Net tangible assets | $ 5,000,001 | |||||||||
Number of shareholders | 26,091,034 | |||||||||
Amount paid from redeemed shares | $ 267,100,000 | |||||||||
Description of business combination | New HoldCo executed an agreement to sell $475 million of Notes. The offering is conditioned upon, and is expected to be consummated concurrently with, the consummation of the transactions contemplated by the Merger Agreement and certain other transactions. | Business Combination was reduced by $50 million, to approximately $1,037 million (assuming no redemptions). | ||||||||
Description of merger agreement consideration | Nesco Owner will no longer receive cash consideration in an amount of $75 million, and instead will receive common stock consideration at a price of $10.00 per share, for an aggregate of 7,500,000 shares of common stock, regardless of redemptions; excluding the 7,500,000 additional shares referred to above, the aggregate common stock consideration to Nesco Owner was reduced by 3,303,597 shares as Nesco Owner's contribution to the $50 million enterprise value reduction; earnout consideration to Nesco Owner was increased by 1,651,798 shares, which additional shares may be earned by Nesco Owner if, from the consummation of the Business Combination until the seventh anniversary thereof, the trading price of the combined company's common stock exceeds $19.00 per share for any period of 20 trading days out of a consecutive 30 trading day period or if a sale transaction of the combined company occurs in which the consideration paid per share to holders of common stock exceeds $19.00 per share; an additional (i) 348,201 shares of common stock owned by the Sponsor will be cancelled and (ii) 348,202 shares of common stock owned by the Sponsor will be subject to lock-up and potential forfeiture for the seven-year period following the consummation of the business combination, which risk of forfeiture will lapse if the trading price of the combined company's common stock exceeds $19.00 per share for any period of 20 trading days out of a consecutive 30 trading day period or if a sale transaction of the combined company occurs in which the consideration paid per share to holders of common stock exceeds $19.00 per share; and concurrently with the closing of the Business Combination, Nesco Owner or one or more of its affiliates will purchase 2,500,000 newly issued shares of the Company's common stock at a price of $10.00 per share (for gross proceeds to the Company of $25 million), payable in cash. | |||||||||
Subscription agreements, description | The Company will, immediately following the consummation of the Business Combination, sell (i) an aggregate of 1,000,000 shares of common stock of the Company to the Capitol Purchasers at $10.00 per share and (ii) 4,500,000 shares of common stock to the ECP Purchaser at $10.00 per share (2,500,000 shares of which shall be subject to receipt by the ECP Purchaser or its affiliates of at least $25 million in full repayment of certain outstanding indebtedness). | |||||||||
Ordinary shares, authorized | 400,000,000 | |||||||||
Preferred stock, authorized | 5,000,000 | |||||||||
Subsequent Event [Member] | Class A ordinary shares [Member] | ||||||||||
Subsequent Events (Textual) | ||||||||||
Ordinary shares, authorized | 50,000,000 | |||||||||
Subsequent Event [Member] | Class B Ordinary shares [Member] | ||||||||||
Subsequent Events (Textual) | ||||||||||
Ordinary shares, authorized | 250,000,000 | |||||||||
Preferred stock, authorized | 1,000,000 |