PSQ Holdings, Inc. — Q2 2023 Form 10-Q
Reporting period: Quarter and six months ended June 30, 2023. At that date, the registrant was still Colombier Acquisition Corp., a blank-check company; the figures below do not include PublicSq.’s operating results. The merger closed July 19, 2023, and the company changed its name to PSQ Holdings, Inc.
Financial results and liquidity
| Metric | Q2 2023 | Q2 2022 | Six months 2023 | Six months 2022 |
|---|---|---|---|---|
| Operating revenue | None | None | None | None |
| Operating and formation costs | $2.83 million | $0.25 million | $4.38 million | $0.54 million |
| Interest earned on Trust Account securities | $2.04 million | $0.23 million | $3.88 million | $0.24 million |
| Change in warrant-liability fair value | $(6.30) million | $1.98 million | $(7.79) million | $4.85 million |
| Net income (loss) | $(7.62) million | $1.94 million | $(9.28) million | $4.53 million |
| Basic and diluted loss per share | $(0.35) | $0.09 income | $(0.43) | $0.21 income |
Profitability and margins are not meaningful for this pre-combination blank-check period because the company generated no operating revenue. The quarterly and year-to-date losses were materially affected by non-cash warrant remeasurement.
- Cash and liquidity: Cash outside the Trust Account was $1.20 million at June 30, versus $0.20 million at December 31, 2022. The company reported a working-capital deficit of $2.10 million.
- Trust assets: Marketable securities in the Trust Account were $175.88 million at June 30, including accrued investment returns. In July, substantially all Trust funds were used to complete the business combination and fund redemptions; the June balance is not a measure of post-close cash available to the combined company.
- Cash flow: Operating activities used $1.95 million in the first half of 2023, compared with $0.56 million in the prior-year period. Trust withdrawals of $2.95 million for working capital and taxes contributed to the $1.01 million increase in cash.
- Liabilities and debt: Total liabilities were $19.26 million, including $8.82 million of warrant liabilities, $6.04 million of deferred underwriting fees, and $4.41 million of current liabilities. The company reported no long-term debt; the filing says no related-party loans were outstanding.
Material changes and notable events
- Q2 2023 shifted from prior-year net income to a net loss, as operating and formation costs rose and warrant fair-value changes moved from income to expense. The warrant liability increased to $8.82 million from $1.03 million at year-end 2022.
- Before the July 19 closing, holders requested redemption of 14,286,259 public shares, approximately 83% of Colombier’s pre-redemption public shares; 2,963,741 public shares remained afterward.
- The company stated that completion of the business combination alleviated the going-concern doubt identified before closing. Its prior deadline to complete a transaction or liquidate was September 11, 2023.
Outlook, risks, and controls
- The filing provides no quantified operating guidance or forecast. Management said it did not expect operating revenue before completion of the business combination; the post-close operating outlook is not provided in this report.
- Potential risks discussed include market and geopolitical uncertainty and possible application of the federal 1% excise tax to certain share repurchases or redemptions. The tax’s applicability and amount were uncertain.
- Management concluded disclosure controls and procedures were ineffective because of a material weakness in internal control over financial reporting related to accounting for complex financial instruments. Planned remediation included improving review procedures, access to accounting expertise, and staff resources.
- The company reported no legal proceedings and no off-balance-sheet arrangements as of June 30, 2023. Interim results are not necessarily indicative of future results.
Important facts for investors to verify
- Post-combination cash, debt, liquidity needs, and the effects of the 83% public-share redemption; the June 30 Trust Account balance was largely deployed at closing.
- Combined-company operating results and guidance, which are not reflected in this pre-combination 10-Q.
- Whether the accounting-control material weakness has been remediated and whether it affects subsequent filings.
- Final treatment of deferred underwriting fees and any potential excise-tax liability associated with the redemptions.