Filing identity and business context
Important: The supplied filing is Platinum Eagle Acquisition Corp.’s Form 10-Q, not a Target Hospitality Corp. filing. It covers the quarter and six months ended June 30, 2018; the unaudited report was signed August 13, 2018.
Platinum Eagle was a blank-check company seeking a business combination and had not begun operating or generated significant revenue. It completed its $325 million IPO on January 17, 2018 and raised a further $8 million through private-placement warrants. The filing does not identify a completed acquisition.
Financial results and position
Amounts are in U.S. dollars. The filing presents 2018 results but no prior-year comparable results, so year-over-year changes cannot be assessed.
| Metric | Three months ended June 30, 2018 | Six months ended June 30, 2018 |
|---|---|---|
| Revenue | $0 | $0 |
| General and administrative expenses | $176,468 | $326,731 |
| Interest income from Trust Account | $1,345,994 | $2,246,119 |
| Net income | $1,169,526 | $1,919,388 |
| Net income per Class A share | $0.04 | $0.06 |
Operating margins are not meaningful because the company had no revenue; reported profit arose from Trust Account interest, offset by expenses. Six-month operating cash use was $246,387. Investing cash outflow was $325 million, reflecting the Trust deposit; financing provided $325.9 million net. Cash outside the Trust Account at quarter-end was $639,821.
At June 30, total assets were $328.0 million, including $327.2 million in Trust Account U.S. Treasury securities and $762,254 in current assets. Current liabilities were $206,583; total liabilities were $11.6 million, including $11.375 million of deferred underwriting compensation. That deferred fee is payable only if a business combination is completed. The company reported no long-term debt. Class A shares classified as temporary equity because of redemption rights totaled $311.4 million; permanent shareholders’ equity was $5.0 million.
Liquidity, outlook, and risks
The Trust Account funds are generally restricted until a business combination, redemption, or liquidation. The company may use limited Trust interest for working capital and taxes. Management said it did not expect to need additional funding for operating expenditures, but warned that underestimated transaction costs or additional financing needs could leave insufficient working capital. Sponsor and insider loans are optional, not committed; inability to obtain funding could impair the company’s ability to continue as a going concern.
The company had until January 17, 2020—24 months after the IPO—to complete a business combination. If it failed, it was required to cease operations, redeem public shares from the Trust Account subject to stated deductions, and liquidate. Public shareholders could also redeem shares in connection with a business combination, subject to a $5,000,001 minimum net tangible asset threshold. The company reported no legal proceedings and no material changes to prospectus risk factors. Management stated disclosure controls were effective and reported no material change in internal control over financial reporting.
Management provided no operating guidance or target-specific outlook. It cautioned that completion of a business combination was uncertain. Trust investments were short-term U.S. government securities; management did not expect material interest-rate exposure. The filing reported no off-balance-sheet arrangements.
Key facts for investors to verify
- Confirm the intended issuer: this filing is for Platinum Eagle Acquisition Corp., not Target Hospitality Corp.
- Verify the business-combination status and applicable deadline; this filing states January 17, 2020.
- Check restrictions and redemption terms for the $327.2 million Trust Account, including the deferred $11.375 million underwriting fee.
- Reconcile liquidity figures: the balance sheet reports $639,821 outside the Trust, while MD&A also cites $640,566, which appears to include $745 of Trust cash.
- Review subsequent filings for changes in funding needs, share redemptions, transaction costs, or business-combination plans.