Filing identity and reporting period
Important issuer mismatch: The supplied filing is Collier Creek Holdings’ unaudited Form 10-Q for the quarter ended March 31, 2019—not a filing by Utz Brands, Inc. It describes a blank-check company seeking a business combination, with an intended focus on consumer goods. It reports no operating business or product revenue.
Financial results and liquidity
- Revenue and margins: No operating revenue; the company stated it would not generate operating revenue until a business combination closed. Operating loss was $159,706, all reported as general and administrative expense.
- Net income: $2.30 million, including $2.46 million of investment income from the trust account. The filing reports basic and diluted EPS of $0.06 for Class A and a $0.01 loss per share for Class B.
- Cash flow: Operating cash outflow was $206,009. Cash outside the trust account declined to $738,881 from $944,890 at December 31, 2018.
- Assets and liquidity: Total assets were $445.58 million, including $444.51 million in trust-account cash and marketable securities. Working capital was approximately $957,000. Management said available working capital should be sufficient for the next 12 months.
- Liabilities and debt: Total liabilities were $15.56 million, including $15.45 million of deferred underwriting commissions and legal fees payable upon a completed business combination. The filing reports no outstanding debt; a prior $155,000 sponsor loan was repaid in October 2018.
Changes and outlook
Compared with December 31, 2018, trust assets increased by approximately $2.46 million, largely reflecting investment income; cash outside the trust fell by approximately $206,000. The filing provides no prior-year quarterly operating comparison. Management said activity remained focused on identifying and evaluating a business-combination target and gave no target-specific guidance.
The company had 24 months from its October 10, 2018 IPO closing—through October 10, 2020—to complete a business combination. If it does not, it must cease operations and redeem public shares, subject to applicable claims and legal requirements; warrants could expire worthless. A forward purchase agreement provides for $35 million of shares and warrants to be purchased at a business-combination closing. Public shareholders may redeem shares in connection with a transaction, subject to the filing’s stated terms.
Risks, contingencies, and other disclosures
- The company’s results reflect trust investment income and expenses, not operating performance of a consumer-goods business.
- The $15.45 million deferred underwriting amount and $50,000 deferred legal fee are contingent on completing a business combination.
- The filing reports no legal proceedings, no off-balance-sheet arrangements, and no material market or interest-rate risk as of March 31, 2019. Management reported effective disclosure controls and no material change in internal control over financial reporting.
- The company identified itself as an emerging growth company and elected the extended transition period for adopting new accounting standards.
Investor facts to verify
- Confirm the intended issuer: this filing is for Collier Creek Holdings, not Utz Brands, Inc.
- Verify whether a business combination was subsequently announced or completed, and the resulting transaction terms and redemption outcomes.
- Check the trust balance, available outside-trust cash, deferred transaction costs, and any sponsor or working-capital financing at the time of any proposed transaction.
- Review potential dilution from founder-share conversion, public and private warrants, and the $35 million forward purchase arrangement.
- Confirm the applicable deadline and consequences if no business combination is completed by October 10, 2020.