Filing and business context
This is Colombier Acquisition Corp.’s unaudited Form 10-Q for the quarter ended March 31, 2022—not a filing under the name PSQ Holdings, Inc. Colombier was a blank-check company seeking a business combination and had not begun operating or generating operating revenue. The filing refers to a proposed business combination but provides no clear transaction details in the supplied text.
Financial performance and position
| Metric | Three months ended March 31, 2022 / at March 31, 2022 |
|---|---|
| Revenue | No operating revenue; the company had not commenced operations. |
| Net income | $2.585 million, including $2.866 million of noncash gain from the change in fair value of warrant liabilities and $11,135 of trust-account interest, offset by $292,360 of formation and operating costs. |
| Cash flow | $383,074 used in operating activities; ending cash was $458,152, down from $841,226 at December 31, 2021. |
| Cash and liquidity | Working capital was approximately $0.62 million, including the filing’s adjustment for approximately $18,000 of franchise taxes payable. Trust-account securities were $172.518 million, primarily invested in money market funds holding U.S. Treasury securities. |
| Liabilities | Total liabilities were $9.535 million, comprising $280,266 of current accrued expenses, $3.217 million of warrant liabilities and a $6.038 million deferred underwriting fee payable upon completion of a business combination. No long-term debt was reported. |
| Equity and redeemable shares | Stockholders’ deficit was $8.567 million. Separately, 17.25 million Class A shares were classified as temporary equity at $172.5 million redemption value. |
| Margins | Not meaningful: the company had no operating revenue. |
Changes versus prior periods
Net income was $2.585 million versus a $1,000 net loss in the period from inception through March 31, 2021; that prior period covered only February 12 through March 31, 2021 and is not a like-for-like quarterly comparison. The 2022 income was driven principally by warrant fair-value changes, not business operations. Compared with December 31, 2021, cash fell by approximately $383,000, total assets decreased to $173.468 million from $173.948 million, and warrant liabilities declined to $3.217 million from $6.084 million.
Outlook, risks and notable items
- The company had until June 11, 2023 to complete a business combination. If it failed, it would have to wind up and redeem public shares; warrants could expire worthless.
- Management said additional funding could be needed if a business combination was not completed. The filing states that this uncertainty raises substantial doubt about the company’s ability to continue as a going concern through one year from the financial-statement date if no combination is consummated.
- The filing reports no operating business, long-term debt or off-balance-sheet arrangements. It describes a $10,000 monthly administrative-services fee to a sponsor affiliate and a $6.038 million deferred underwriting fee contingent on completing a combination.
- Disclosure controls were assessed as ineffective because of a material weakness in accounting for complex financial instruments. Management described plans to strengthen review procedures and expertise.
- Risks discussed include COVID-19, Russia-Ukraine-related market volatility, and proposed SEC rules that could increase the time or cost of completing a SPAC combination. The company also noted that actual results could differ from forward-looking statements.
Most important facts for investors to verify
- Confirm the issuer and transaction status: this filing names Colombier Acquisition Corp.; the supplied text does not establish a completed combination with PSQ Holdings, Inc.
- Review the proposed transaction’s terms, conditions, financing, redemption levels and timing in subsequent filings; details are not clear in this filing text.
- Assess the company’s limited cash outside the trust, funding needs and going-concern warning, separately from the trust-account balance.
- Consider that reported quarterly profit depended mainly on a noncash warrant-liability remeasurement and is not evidence of operating profitability.
- Track remediation of the material weakness in financial-instrument accounting and any subsequent control-effectiveness disclosures.