Filing summary
Entity mismatch: The supplied filing is for Conyers Park II Acquisition Corp., not Advantage Solutions Inc. The summary below reflects the filing text provided.
Business context and reporting period
This unaudited Form 10-Q covers the quarter ended September 30, 2019. Conyers Park II was a newly formed blank-check company seeking a business combination, with an intended focus on consumer and consumer-related businesses. It had not begun operating activities or identified a target by period-end. Its IPO closed July 22, 2019.
Financial results and position
- Revenue: No operating revenue; the company expected none before a business combination.
- Quarterly results: Net income was $1.163 million, comprising $1.693 million of trust-account interest, offset by $138,090 of general and administrative expense, $50,000 of state franchise taxes, and $345,918 of income tax expense. Basic and diluted EPS was $0.03 for Class A and $0.00 for Class B.
- Cash and liquidity: Cash and cash equivalents were $1.224 million; working capital was $1.090 million. Trust-account marketable securities totaled $451.484 million, including $1.694 million of interest income available for taxes and permitted working-capital withdrawals.
- Cash flow: From inception through September 30, operating cash flow was negative $398,658; investing cash flow was negative $449.790 million; and financing cash flow was positive $451.413 million.
- Debt and obligations: No working-capital loans were outstanding, and the $141,636 sponsor promissory note had been repaid. The balance sheet included $15.750 million of deferred underwriting commissions, payable only if a business combination is completed.
- Equity and trust: Of 45 million Class A shares issued, 43.182 million were subject to possible redemption and classified as temporary equity. Stockholders’ equity was $5.000 million.
Changes versus comparable periods
The filing provides no prior-year comparable quarter: the company was incorporated May 2, 2019. Its inception-to-September results were net income of $1.161 million, versus $1.163 million for the third quarter alone; the inception-to-date period includes the company’s initial formation period and is not a like-for-like prior-period comparison.
Outlook, risks and unusual items
- Management believed available working capital and potential sponsor or insider borrowing capacity would meet needs through the earlier of a business combination or one year from the filing. Such loans were optional, not committed.
- The company had 24 months from the July 22, 2019 IPO closing—through July 22, 2021—to complete a business combination or redeem public shares and liquidate. Failure to complete one could leave warrants worthless.
- Public shareholders could redeem shares in connection with a business combination, subject to stated limits. The company had to pursue a qualifying transaction meeting its charter’s asset and control requirements.
- The deferred underwriting commission would be paid from trust funds only upon completion of a business combination; underwriters waived it if the company liquidated.
- Management reported effective disclosure controls and no material change in internal control over financial reporting. No legal proceedings or material changes to previously disclosed risk factors were reported.
- No specific transaction guidance or target-company outlook was provided. Management cautioned that completing a business combination was not assured.
Important facts for investors to verify
- Confirm the issuer identity: the filing is for Conyers Park II Acquisition Corp., despite the request naming Advantage Solutions Inc.
- Verify the current status of any business combination, liquidation deadline, redemptions, and trust-account balance; this filing reports only September 30, 2019 information.
- Review the trust-account withdrawal and redemption terms, including the deferred underwriting fee and creditor-claim protections.
- Assess the potential dilution and value implications of founder shares and the 18.583 million public and private warrants disclosed.
- Reconcile reported quarterly interest income, income taxes, and cash flows with subsequent filings, given the company’s pre-operating SPAC structure.