Filing summary
Entity and period: The supplied filing is Collier Creek Holdings’ unaudited Form 10-Q for the quarter ended June 30, 2019—not a Utz Brands, Inc. filing. Collier Creek was a blank-check company seeking a business combination, with an intended focus on consumer goods. Its reported activity was formation, its 2018 IPO, and target search; it had not begun operating a business.
Financial results and liquidity
- Revenue and operating performance: No operating revenue. For Q2 2019, general and administrative expense was $125,790, investment income from the trust account was $2,483,194, and net income was $2,357,404. For the six months, those amounts were $285,496, $4,944,828, and $4,659,332, respectively. Net income primarily reflected trust-account investment income, not business operations.
- Per-share results: Q2 basic and diluted income per Class A share was $0.06; reported loss per Class B share was $0.01. Six-month figures were $0.11 income per Class A share and $0.02 loss per Class B share.
- Cash flow: Cash used in operating activities was $272,744 in the first half of 2019. Cash declined from $944,890 at December 31, 2018 to $672,146 at June 30, 2019.
- Assets and liquidity: The trust account held $446,993,124 in money market funds at June 30, 2019, compared with $442,048,296 at year-end. Cash and prepaid expenses totaled $934,237; management reported working capital of approximately $832,000 and expected funds to cover needs for the next 12 months.
- Liabilities and debt: Total liabilities were $15,552,700, including $15,450,000 of deferred underwriting commissions and legal fees payable only if a business combination closes. The filing reports no outstanding debt; a prior $155,000 sponsor loan was repaid in October 2018.
- Margins: Not meaningful because the company had no operating revenue.
Changes, outlook, and material considerations
- Compared with the prior-year inception-period loss of $6,771, 2019 reported net income was driven by investment income on the trust assets. The prior period began at inception and is not a comparable operating period.
- No specific earnings or revenue guidance was provided. Management said it would use outside-trust funds for operating costs and business-combination search expenses and believed those funds were sufficient for 12 months from the report date.
- The company had until October 10, 2020—24 months after its IPO—to complete a business combination. If it failed, it was required to stop operations, redeem public shares, and liquidate, subject to applicable law and creditor claims. Warrants could expire worthless.
- Public shareholders could redeem shares in a completed transaction; the filing also describes a 15% redemption restriction for a shareholder and its affiliates or group absent company consent. Sponsor and director forward-purchase agreements contemplated $35 million of securities at a business-combination closing.
- The company reported no material market or interest-rate exposure, no off-balance-sheet arrangements, no legal proceedings, and no subsequent events requiring adjustment or disclosure. Disclosure controls were reported effective, with no material change in internal control over financial reporting.
Important facts for investors to verify
- Confirm the issuer: the provided document is for Collier Creek Holdings, despite the request identifying Utz Brands, Inc.
- Verify the status and terms of any business combination, redemption rights, and the October 10, 2020 completion deadline from subsequent filings.
- Review trust-account assets and the distinction between trust funds available for a transaction or redemptions and the company’s limited operating cash.
- Assess potential dilution from founder shares, public and private warrants, and the $35 million forward-purchase commitment.
- Confirm deferred fees and other transaction costs that would become payable upon a completed business combination.