Exhibit 99.2

 

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

 

Introduction

 

The unaudited pro forma condensed combined financial statements (which we refer to as the pro forma financial statements) combine the adjusted historical financial statements of Capitol and the historical consolidated combined financial statements of Lindblad to illustrate the effect of the reverse capitalization. The pro forma financial statements were based on and should be read in conjunction with:

 

	●	The accompanying notes to the unaudited pro forma financial statements;
	●	Capitol’s financial statements for the year ended December 31, 2014 and three and six months ended June 30, 2015 and the notes relating thereto; and
	●	Lindblad’s consolidated financial statements for the year ended December 31, 2014 and three and six months ended June 30, 2015 and the notes relating thereto.

 

The Company is providing the following unaudited pro forma condensed combined financial information to aid you in your analysis of the financial aspects of the transactions, following unaudited pro forma condensed combined balance sheet combines the unaudited historical balance sheet of Capitol as of June 30, 2015 with the unaudited consolidated historical statement of financial position of Lindblad as of June 30, 2015, giving effect to the transactions as if they had been consummated as of that date, following unaudited pro forma condensed combined income statement for the three and six months ended June 30, 2015 combines the unaudited condensed statement of operations of Capitol for the three and six months ended June 30, 2015 with the unaudited income statement of Lindblad for the three and six months ended June 30, 2015, giving effect to the transactions as if they had occurred on January 1, 2015, following unaudited pro forma condensed combined income statement for the year ended December 31, 2014 combines the audited statement of operations of Capitol for the year ended December 31, 2014 with the audited income statement of Lindblad for the year ended December 31, 2014, giving effect to the transactions as if they had occurred on January 1, 2014.

 

The historical financial information has been adjusted to give effect to the expected events that are related and/or directly attributable to the transactions, are factually supportable and are expected to have a continuing impact on the combined results. The adjustments presented in the unaudited pro forma condensed combined financial statements have been identified and presented to provide relevant information necessary for an accurate understanding of the combined company upon consummation of the transactions.historical financial statements of Capitol and Lindblad have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). The unaudited pro forma condensed combined financial statements included herein are prepared in accordance with GAAP.

 

The historical financial information of Capitol was derived from the unaudited financial statements of Capitol for the three and six months ended June 30, 2015 and the audited financial statements of Capitol for the year ended December 31, 2014. The historical financial information of Lindblad was derived from the unaudited consolidated financial statements of Lindblad for the three and six months ended June 30, 2015 and the audited consolidated financial statements of Lindblad for the year ended December 31, 2014. This information should be read together with Capitol’s and Lindblad’s financial statements and related notes, and other financial information. Unaudited pro forma condensed combined financial information is for illustrative purposes only. The financial results may have been different had the companies always been combined. You should not rely on the unaudited pro forma condensed combined financial information as being indicative of the historical results that would have been achieved had the companies always been combined or the future results that the combined company will experience. The merger was consummated on July 8, 2015.

 

 

LINDBLAD EXPEDITIONS HOLDINGS, INC. (FORMERLY CAPITOL ACQUISITION CORP. II)
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
JUNE 30, 2015

 

		Capitol Acquisition				Lindblad Expeditions,				Pro Forma Adjustments										Pro Forma As
		Corp. II				Inc.				New Debt			Note		Merger			Note		Adjusted
		Note 1				Note 2
ASSETS
Current assets:
Cash and cash equivalents		$	15,949			$	53,473,021			$	-				$	200,000,936		5		$	200,411,593
											-					(14,781,300	)	6
											54,702,987		7			(3,000,000	)	12
											-					(90,000,000	)	8
Restricted cash and marketable securities			10,005				47,478,278				(30,000,000	)	7			-					17,488,283
Cash and cash equivalents held in trust account, interest income available for working capital and taxes			936				-				-					(936	)	5			-
Inventories			-				1,921,917				-					-					1,921,917
Marine operating supplies			-				5,145,250				-					-					5,145,250
Prepaid expenses and other current assets			48,832				10,994,135				-					-					11,042,967
Total current assets			75,722				119,012,601				24,702,987					92,218,700					236,010,010
Property and equipment, net			-				119,175,217				-					-					119,175,217
Operating rights			-				6,528,949				-					-					6,528,949
Deferred tax assets			-				253,829				-					-					253,829
Restricted cash and cash equivalents held in trust account			200,000,000				-				-					(200,000,000	)	5			-
Deferred royalties and commissions			-				-				-					13,751,994		10			13,751,994
Total assets		$	200,075,722			$	244,970,596			$	24,702,987				$	(94,029,306	)			$	375,719,999
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Unearned passenger revenues		$	-			$	79,042,259			$	-				$	-				$	79,042,259
Accounts payable and accrued expenses			3,041,695				18,070,214				-					(500,000	)	11			20,611,909
Long-term debt - current			-				1,500,000				250,000		7			-					1,750,000
Obligations to repurchase shares of Class A common stock			-				4,965,792				-					(4,965,792	)	9			-
Total current liabilities			3,041,695				103,578,265				250,000					(5,465,792	)				101,404,168
Long-term debt, less current portion			-				138,271,507				-					-					162,724,494
											24,452,987		7			-
Other long-term liabilities			-				418,070				-					-					418,070
Deferred income taxes, long-term			-				408,226				-					-					408,226
Total long-term liabilities			-				139,097,803				24,452,987					-					163,550,790
Total liabilities			3,041,695				242,676,068				24,702,987					(5,465,792	)				264,954,958
Ordinary shares subject to possible redemption			187,981,868				-				-					(187,981,868	)	3			-
Stockholders' equity:
Common stock, $0.001 par value			620				-				-					3,882		3			4,472
											-					(30	)	12
Additional paid-in capital			12,975,932				(59,574,152	)			-					187,977,986		3			53,450,741
											-					(3,924,393	)	4
											-					(10,222,448	)	6
											-					(90,000,000	)	8
											-					4,965,792		9
											-					13,751,994		10
											-					500,000		11
											-					(2,999,970	)	12
Retained earnings (deficit)			(3,924,429	)			61,868,680				-					3,924,429		4			57,309,828
											-					(4,558,852	)	6
Accumulated other comprehensive income			36				-				-					(36	)	4
Total stockholders' equity (deficit)			9,052,159				2,294,528				-					99,418,354					110,765,041
Total liabilities and stockholders' equity (deficit)		$	200,075,722			$	244,970,596			$	24,702,987				$	(94,029,306	)			$	375,719,999

 

See footnotes to unaudited pro forma condensed combined financial statements

 

LINDBLAD EXPEDITIONS HOLDINGS, INC. (FORMERLY CAPITOL ACQUISITION CORP. II)
UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENT

THREE MONTHS ENDED JUNE 30, 2015

 

		Capitol Acquisition				Lindblad Expeditions,				Pro Forma Adjustments										Pro Forma As
		Corp. II				Inc.				New Debt			Note		Merger			Note		Adjusted
		Note A				Note B
Revenues		$	-			$	49,531,025			$	-				$	-				$	49,531,025
Cost of revenues							21,485,767				-					-					21,485,767
Gross Profit			-				28,045,258				-					-					28,045,258
Operating expenses:
Selling and marketing			-				8,189,162				-					726,171		D			8,915,333
General and administrative			773,574				14,556,935				-					117,000		C			9,911,155
																(4,956,160	)	H
											-					(580,194	)	I
Depreciation and amortization			-				2,895,026				-					-					2,895,026
Total operating expenses			773,574				25,641,123				-					(4,693,183	)				21,721,514
(Loss) income from operations			(773,574	)			2,404,135				-					4,693,183					6,323,744
Interest income (expense), net			13				(3,888,204	)			3,888,204		E			-					(2,923,393	)
											(2,063,000	)	F			-
											(344,000	)	F			-
											(516,406	)	G			-
Loss on foreign currency translation			-				(78,329	)			-					-					(78,329	)
Earnings on investment in CFMF			-				(235,000	)			-					235,000		J			-
Other income			-				12,525,926				-					(12,525,926	)	K			-
Other (expense) income, net			13				8,324,393				964,798					(12,290,926	)				(3,001,722	)
Income (loss) before income taxes			(773,561	)			10,728,528				964,798					(7,597,743	)				3,322,022
Income tax (benefit) expense			-				1,893,259				-					(741,000	)	L			1,152,259
Net (loss) income		$	(773,561	)		$	8,835,269			$	964,798				$	(6,856,743	)			$	2,169,763
Capitol Common and Lindblad Class A Common Stock
Net (loss) income available to Capitol
Common and Lindblad Class A Common Stockholders		$	(773,561	)		$	8,835,269			$	964,798				$	(6,856,743	)			$	2,169,763
Weighted average shares outstanding
Basic			6,201,785				154,817				-					38,361,157		M			44,717,759
Diluted			6,201,785				159,596				-					42,338,619		M			48,700,000
Earnings per share
Basic		$	(0.12	)		$	57.07													$	0.05
Diluted		$	(0.12	)		$	55.36													$	0.04

 

See footnotes to unaudited pro forma condensed combined financial statements

 

 

LINDBLAD EXPEDITIONS HOLDINGS, INC. (FORMERLY CAPITOL ACQUISITION CORP. II)
UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENT

SIX MONTHS ENDED JUNE 30, 2015

 

		Capitol Acquisition				Lindblad Expeditions,				Pro Forma Adjustments										Pro Forma As
		Corp. II				Inc.				New Debt			Note		Merger			Note		Adjusted
		Note A1				Note B2
Revenues		$	-			$	104,951,551			$	-				$	-				$	104,951,551
Cost of revenues							45,886,988				-					-					45,886,988
Gross Profit			-				59,064,563				-					-					59,064,563
Operating expenses:
Selling and marketing			-				17,351,646				-					1,452,342		D1			18,803,988
General and administrative			2,185,134				25,682,431				-					235,000		C1			20,297,963
																(4,956,160	)	H1
											-					(2,848,442	)	I1
Depreciation and amortization			-				5,646,825				-					-					5,646,825
Total operating expenses			2,185,134				48,680,902				-					(6,117,260	)				44,748,776
(Loss) income from operations			(2,185,134	)			10,383,661				-					6,117,260					14,315,787
Interest income (expense), net			1,278				(5,077,627	)			5,077,627		E1			-					(5,810,451	)
											(4,125,000	)	F1			-
											(688,000	)	F1			-
											(998,729	)	G1			-
Change in fair value of contingent purchase obligation			-				-				-					-					-
Change in fair value of obligation to repurchase shares of  Class A common stock			-				-				-					-					-
Loss on foreign currency translation			-				(194,367	)			-					-					(194,367	)
Earnings on investment in CFMF			-				-				-					-					-
Other income			-				12,525,926				-					(12,525,926	)	K1			-
Other (expense) income, net			1,278				7,253,932				(734,102	)				(12,525,926	)				(6,004,818	)
Income (loss) before income taxes			(2,183,856	)			17,637,593				(734,102	)				(6,408,666	)				8,310,969
Income tax (benefit) expense			-				1,869,831				-					(798,000	)	L1			1,071,831
Net (loss) income		$	(2,183,856	)		$	15,767,762			$	(734,102	)			$	(5,610,666	)			$	7,239,138
Capitol Common and Lindblad Class A Common Stock
Net (loss) income available to Capitol
Common and Lindblad Class A Common Stockholders		$	(2,183,856	)		$	15,767,762			$	(734,102	)			$	(5,610,666	)			$	7,239,138
Weighted average shares outstanding
Basic			6,201,785				199,769				-					38,316,205		M1			44,717,759
Diluted			6,201,785				203,057				-					42,295,158		M1			48,700,000
Earnings per share
Basic		$	(0.35	)		$	78.93													$	0.16
Diluted		$	(0.35	)		$	77.65													$	0.15

 

See footnotes to unaudited pro forma condensed combined financial statements

 

 

LINDBLAD EXPEDITIONS HOLDINGS, INC. (FORMERLY CAPITOL ACQUISITION CORP. II)

UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENT

YEAR ENDED DECEMBER 31, 2014

 

		Capitol Acquisition				Lindblad Expeditions,				Pro Forma Adjustments										Pro Forma As
		Corp. II				Inc.				New Debt			Note		Merger			Note		Adjusted
		Note A2				Note B2
Revenues		$	-			$	198,458,975			$	-				$	-				$	198,458,975
Cost of revenues							90,002,097				-					-					90,002,097
Gross Profit			-				108,456,878				-					-					108,456,878
Operating expenses:
Selling and marketing			-				30,718,361				-					2,904,684		D2			33,623,045
General and administrative			1,052,701				36,052,452				-					469,078		C2			37,574,231
											-					-
Depreciation and amortization			-				11,266,095				-					-					11,266,095
Total operating expenses			1,052,701				78,036,908				-					3,373,762					82,463,371
(Loss) income from operations			(1,052,701	)			30,419,970				-					(3,373,762	)				25,993,507
Interest income (expense), net			40,393				(5,292,835	)			5,292,835		E2			-					(11,376,334	)
											(8,250,000	)	F2			-
											(1,375,000	)	F2			-
											(1,791,727	)	G2			-
Change in fair value of contingent purchase obligation			-				-				-					-					-
Change in fair value of obligation to repurchase shares of  Class A common stock			-				10,018				-					-					10,018
Loss on foreign currency translation			-				(149,536	)			-					-					(149,536	)
Earnings on investment in CFMF			-				54,835				-					-					54,835
Other income			-				2,500				-					-					2,500
Other (expense) income, net			40,393				(5,375,018	)			(6,123,892	)				-					(11,458,517	)
Income (loss) before income taxes			(1,012,308	)			25,044,952				(6,123,892	)				(3,373,762	)				14,534,990
Income tax expense			-				2,799,497				-					(1,062,000	)	L2			1,737,497
Net (loss) income		$	(1,012,308	)		$	22,245,455			$	(6,123,892	)			$	(2,311,762	)			$	12,797,493
Capitol Common and Lindblad Class A Common Stock
Net income (loss) available to Capitol
Common and Lindblad Class A Common Stockholders		$	(1,012,308	)		$	21,172,447			$	(6,123,892	)			$	(2,311,762	)	N2		$	12,797,493
																1,073,008		N2
Weighted average shares outstanding
Basic			6,201,785				244,675				-					38,271,299		M2			44,717,759
Diluted			6,201,785				244,982				-					42,253,233		M2			48,700,000
Earnings per share
Basic		$	(0.16	)		$	86.53													$	0.29
Diluted		$	(0.16	)		$	86.42													$	0.26
Class B Common Stock
Net income available to Class B Common Stockholders						$	1,073,008			$	-				$	(1,073,008	)	N2		$	-
Weighted average shares outstanding
Basic			-				12,400									(12,400	)	N2
Diluted			-				12,400									(12,400	)	N2
Earnings per share
Basic		$	-			$	86.53								$	-
Diluted		$	-			$	86.53								$	-

 

See footnotes to unaudited pro forma condensed combined financial statements

 

 

LINDBLAD EXPEDITIONS HOLDINGS, INC. (FORMERLY CAPITOL ACQUISITION CORP. II) 

Unaudited Pro Forma Condensed Combined Financial Statements

 

I. Basis of Pro Forma Presentation

 

The pro forma financial statements were derived from historical financial statements of Capitol and the historical consolidated financial statements of Lindblad. Historical financial statements have been adjusted in the pro forma financial statements to give effect to pro forma events that are (1) directly attributable to the mergers, (2) factually supportable, and (3) with respect to the pro forma statement of operations, expected to have a continuing impact on the combined results. The pro forma financial statements reflect the impact of:

 

	●	The mergers of Capitol and Lindblad, resulting in Capitol issuing 20,017,787 shares of Capitol’s common stock in exchange for 90,000 shares of Lindblad’s common stock. The merger is presented first assuming that there is no conversion by Capitol’s public holders of common stock and secondly, assuming the maximum conversion by such holders.
	●	Other adjustments described in the notes to this section.

 

The following matters have not been reflected in the pro forma financial statements as they do not meet the aforementioned criteria:

 

	●	Cost savings (or associated costs to achieve such savings) from operating efficiencies, synergies or other restructuring that could result from the merger. The timing and effect of actions associated with integration are currently uncertain.
	●	The potential use by the combined entity of the Capitol pre-merger cash.

 

The transaction is being accounted for as a reverse business combination and recapitalization of Lindblad, since the former owners of Lindblad will control the post-merger company. Lindblad will be deemed the acquirer and Capitol will be deemed the acquired company for accounting purposes.

 

II. Pro Forma Adjustments

 

The following pro forma adjustments give effect to the Business Combination:

 

Pro Forma Condensed Combined Balance Sheet - as of June 30, 2015

 

	Note 1	Derived from the Capitol condensed financial statements as of June 30, 2015.
	Note 2	Derived from the Lindblad condensed consolidated financial statements as of June 30, 2015.

 

Pro forma adjustments:

 

Note 3

To record the reclassification of Capitol’s 18,798,187 shares of “ordinary shares subject to possible redemption” to common stock ($1,880) and additional paid in capital ($187,977,986), the issuance of 20,017,787 shares of Capitol’s common stock, par value $0.0001, (common stock of $2,002), in exchange for 90,000 Class A shares of Lindblad common stock, no par value.

 

			Debit				Credit
Ordinary shares subject to possible redemption		$	187,981,868
Common stock						$	3,882
Additional paid-in capital							187,977,986

 

 

Note 4

To eliminate the accumulated deficit and accumulated other comprehensive income of Capitol, the accounting acquiree.

 

		Debit				Credit
Additional paid-in capital		$	3,924,393
Accumulated other comprehensive income			36
Accumulated deficit						$	3,924,429

 

Note 5

To record the conversion of “Cash and Cash Equivalents Held in Trust Account, Restricted” to “Cash and cash equivalents”.

 

		Debit				Credit
Cash and cash equivalents		$	200,000,936
Restricted cash and cash equivalents held in trust account						$	200,000,000
Cash and cash equivalents held in trust account, interest income available for working capital and taxes							936

 

Note 6

To record the deferred underwriter commission of $8,000,000 and advisory, legal, accounting and other expenses of the business combination.

 

		Debit				Credit
Additional paid-in capital		$	10,222,448
Retained earnings (deficit)			4,558,852
Cash and cash equivalents						$	14,781,300

 

Note 7

To record the entry into the new debt financing agreement, receiving gross proceeds of $25,000,000, net change of debt discount and deferred financing costs of $297,013. In addition, restricted cash of $30,000,000 was released.

 

		Debit				Credit
Cash and cash equivalents		$	54,702,987
Debt discount and deferred financing costs			297,013
Restricted cash						$	30,000,000
Long-term debt, current							250,000
Long-term debt							24,750,000

 

Note 8

To record the payment of cash to the stockholders of Lindblad.

 

		Debit				Credit
Additional paid-in capital		$	90,000,000
Cash and cash equivalents						$	90,000,000

 

Note 9

To record the rescission of the obligation for Lindblad to repurchase shares of Class A common stock and vested options.

 

		Debit				Credit
Obligations to repurchase shares of Class A common stock		$	4,965,792
Additional paid-in-capital						$	4,965,792

 

 

Note 10

To record the issuance of a stock option by Mr. Lindblad to National Geographic for the purchase of 5% of eligible shares outstanding (a grant to purchase a total of 2,387,499 shares) in consideration for the extensions of the National Geographic Alliance and License Agreement and Tour Operator Agreement. The grant date fair value of $5.76 per share was determined using a Black-Scholes model with a term of 5 years, exercise price of $10.00, share price of $10.75, volatility of 60%, and discount rate of 1.58%.

 

		Debit				Credit
Deferred royalties and commissions		$	13,751,994
Additional paid in capital						$	13,751,994

 

Note 11

To record the conversion of the related party notes payable to warrants to purchase 500,000 shares of the Company’s common stock at $11.50 per share.

 

		Debit				Credit
Accounts payable and accrued expenses		$	500,000
Additional paid in capital						$	500,000

 

Note 12

To record conversion of 300,000 shares at $10.00 per share.

 

		Debit				Credit
Common stock		$	30
Additional paid-in capital			2,999,970
Cash and cash equivalents						$	3,000,000

 

Pro Forma Condensed Combined Income Statement - For the Three Months Ended June 30, 2015

 

	Note A	Derived from Capitol’s unaudited condensed financial statements for the three months ended June 30, 2015.
	Note B	Derived from Lindblad’s unaudited condensed consolidated financial statements for the three months ended June 30, 2015.

 

Pro forma adjustments:

 

	Note C	To record the additional compensation to be paid to certain employees of Lindblad, consisting of $167,000 of pro forma compensation as compared to $50,000 of actual compensation recorded.
	Note D	To record the amortization of the fair value of a stock option by Mr. Lindblad to National Geographic for the purchase of 5% of eligible shares outstanding (a grant to purchase a total of 2,387,499 shares) in consideration for the extensions of the National Geographic Alliance and License Agreement and Tour Operator Agreement. The grant date fair value of $5.76 per share was determined using a Black-Scholes model with a term of 5 years, exercise price of $10.00, share price of $10.75, volatility of 60%, and discount rate of 1.58%. The fair value is amortized over the benefit period of 5 years.
	Note E	To record the decrease in pro forma interest expense of $3,888,204 related to the removal of the long term debt of Lindblad upon the business combination, representing the entirety of Lindblad’s interest expense resulting from their Junior Debt and Senior Debt, whose interest rates were 5.035% and 10.000% per annum, respectively, as of May 8, 2015.
	Note F	To record the increase in pro forma interest expense of $2,407,000 related to financing of $175 million at 5.5% per annum.
	Note G	To record the amortization of deferred financing costs and the amortization of debt discount.
	Note H	To record the removal of the debt success fee expense of $4,956,160.
	Note I	To record the removal of non-recurring merger transaction fees of $580,194.
	Note J	To record the loss on investment in the CFMF transaction.

 

 

	Note K	To record the removal of the success fee income of $5,000,000 and the gain on transfer of assets of $7,525,926.
	Note L	To record the decrease in pro forma income tax expense of $741,000. The decrease in income tax expense was derived using the Company’s expected effective income tax rate of approximately 11.2%.
	Note M	To record the pro forma effect of the business combination on the weighted average shares outstanding as if the business combination was consummated on January 1, 2014.

 

Pro Forma Condensed Combined Income Statement - For the Six Months Ended June 30, 2015

 

	Note A1	Derived from Capitol’s unaudited condensed financial statements for the six months ended June 30, 2015.
	Note B1	Derived from Lindblad’s unaudited condensed consolidated financial statements for the six months ended June 30, 2015.

 

Pro forma adjustments:

 

	Note C1	To record the additional compensation to be paid to certain employees of Lindblad, consisting of $335,000 of pro forma compensation as compared to $100,000 of actual compensation recorded.
	Note D1	To record the amortization of the fair value of a stock option by Mr. Lindblad to National Geographic for the purchase of 5% of eligible shares outstanding (a grant to purchase a total of 2,387,499 shares) in consideration for the extensions of the National Geographic Alliance and License Agreement and Tour Operator Agreement. The grant date fair value of $5.76 per share was determined using a Black-Scholes model with a term of 5 years, exercise price of $10.00, share price of $10.75, volatility of 60%, and discount rate of 1.58%. The fair value is amortized over the benefit period of 5 years.
	Note E1	To record the decrease in pro forma interest expense of $5,077,627 related to the removal of the long term debt of Lindblad upon the business combination, representing the entirety of Lindblad’s interest expense resulting from their Junior Debt and Senior Debt, whose interest rates were 5.035% and 10.000% per annum, respectively, as of May 8, 2015.
	Note F1	To record the increase in pro forma interest expense of $4,813,000 related to financing of $175 million at 5.5% per annum.
	Note G1	To record the amortization of deferred financing costs and the amortization of debt discount.
	Note H1	To record the removal of the debt success fee expense of $4,956,160.
	Note I1	To record the removal of non-recurring merger transaction fees of $2,848,442.
	Note K1	To record the removal of the success fee income of $5,000,000 and the gain on transfer of assets of $7,525,926.
	Note L1	To record the decrease in pro forma income tax expense of $798,000. The decrease in income tax expense was derived using the Company’s expected effective income tax rate of approximately 11.2%.
	Note M1	To record the pro forma effect of the business combination on the weighted average shares outstanding as if the business combination was consummated on January 1, 2014.

 

Pro Forma Condensed Combined Income Statement - For the Year Ended December 31, 2014

 

	Note A2	Derived from Capitol’s unaudited condensed financial statements for the year ended December 31, 2014.
	Note B2	Derived from Lindblad’s unaudited condensed consolidated financial statements for the year ended December 31, 2014.

 

 

Pro forma adjustments:

 

	Note C2	To record the additional compensation to be paid to certain employees of Lindblad, consisting of $669,078 of pro forma compensation as compared to $200,000 of actual compensation recorded.
	Note D2	To record the amortization of the fair value of a stock option by Mr. Lindblad to National Geographic for the purchase of 5% of eligible shares outstanding (a grant to purchase a total of 2,387,499 shares) in consideration for the extensions of the National Geographic Alliance and License Agreement and Tour Operator Agreement. The grant date fair value of $5.76 per share was determined using a Black-Scholes model with a term of 5 years, exercise price of $10.00, share price of $10.75, volatility of 60%, and discount rate of 1.58%. The fair value is amortized over the benefit period of 5 years.
	Note E2	To record the decrease in pro forma interest expense of $5,292,835 related to the removal of the long term debt of Lindblad upon the business combination, representing the entirety of Lindblad’s interest expense resulting from their Junior Debt and Senior Debt, whose interest rates were 5.035% and 10.000% per annum, respectively, as of May 8, 2015.
	Note F2	To record the increase in pro forma interest expense of $9,625,000 related to financing of $175 million at 5.5% per annum.
	Note G2	To record the amortization of deferred financing costs and the amortization of debt discount.
	Note L2	To record the decrease in pro forma income tax expense of $1,062,000. The decrease in income tax expense was derived using the Company’s expected effective income tax rate of approximately 11.2%.
	Note M2	To record the pro forma effect of the business combination on the weighted average shares outstanding as if the business combination was consummated on January 1, 2014.
	Note N2	The Class B common stock was redeemed in December 2014, and for the purpose of this pro forma was deemed to not be outstanding as of January 1, 2014.

 

 

PRO FORMA FINANCIAL INFORMATION

 

The following unaudited pro forma summary financial information below reflects selected financial information for Lindblad Expeditions Holdings, Inc. resulting from the Merger of Capitol Acquisition Corp. II and Lindblad Expeditions Inc., referred to as the “Merger.” The Merger was accounted for as a reverse acquisition as if the Merger had occurred and the Amended Credit Agreement was in effect at the beginning of the periods presented. The pro forma summary financial information does not purport to present what actual results of operations would have been if the Merger and Amended Credit Agreement had occurred on such date or to project results for any future period. The information should be read in conjunction with the historical financial statements of the Company and Capitol included in Capitol’s definitive merger proxy statement filed with the SEC on June 24, 2015.

 

		Pro Forma (unaudited)
		For the Year Ended December 31, 2014				For the Three Months Ended June 30, 2015				For the Six Months Ended June 30, 2015
Income Statement Data
Total revenues		$	198,458,975			$	49,531,025			$	104,951,551
Total operating expenses		$	82,463,371			$	21,721,514			$	44,748,776
Operating income		$	25,993,507			$	6,323,744			$	14,315,787
Net income		$	12,797,493			$	2,169,763			$	7,239,138
Net income per common share - basic		$	0.29			$	0.05			$	0.16
Net income per common share - diluted		$	0.26			$	0.04			$	0.15

 

		As of June 30, 2015
Balance Sheet Data
Total current assets		$	236,010,010
Total assets		$	375,719,999
Total current liabilities		$	101,404,168
Total liabilities		$	264,954,958
Total stockholders’ equity		$	110,765,041

 

 

LINDBLAD EXPEDITIONS HOLDINGS, INC. (FORMERLY CAPITOL ACQUISITION CORP. II)

Selected Pro Forma Financial Data

(unaudited)

 

		For the Three Months Ended June 30,				For the Six Months Ended June 30,				For the Year Ended December 31,
		2015				2015				2014
OPERATING DATA:
Tour revenues		$	49,531,025			$	104,951,551			$	198,458,975
Cost of tours			21,485,767				45,886,988				90,002,097
Gross profit			28,045,258				59,064,563				108,456,878
Operating expenses:
General and administrative			9,911,155				20,297,963				37,574,231
Selling and marketing			8,915,333				18,803,988				33,623,045
Depreciation and amortization			2,895,026				5,646,825				11,266,095
Total operating expenses			21,721,514				44,748,776				82,463,371
Operating income			6,323,744				14,315,787				25,993,507
Other income (expense):
Interest income (expense), net			(2,923,393	)			(5,810,451	)			(11,376,334	)
Other income (expense)			(78,329	)			(194,367	)			(82,183	)
Total other expense			(3,001,722	)			(6,004,818	)			(11,458,517	)
Income before income taxes			3,322,022				8,310,969				14,534,990
Income tax expense			1,152,259				1,071,831				1,737,497
Net income		$	2,169,763			$	7,239,138			$	12,797,493
Weighted average shares outstanding
Basic			44,717,759				44,717,759				44,717,759
Diluted			48,700,000				48,700,000				48,700,000
Earnings per share
Basic		$	0.05			$	0.16			$	0.29
Diluted		$	0.04			$	0.15			$	0.26

 

 

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