Business context and reporting period
Entity discrepancy: The supplied filing is Double Eagle Acquisition Corp.’s Form 10-Q, not a WillScot Holdings Corp. filing. It covers the quarter ended March 31, 2016 and was signed May 16, 2016.
Double Eagle was a blank-check company seeking a business combination; it had not selected a target in this filing. Its stated initial focus was media and entertainment, though it could pursue other sectors. The company identified itself as a shell company.
Financial results and position
| Metric | Quarter ended / at March 31, 2016 |
|---|---|
| Revenue | $0 |
| General and administrative expenses | $277,474 |
| Operating loss | $277,474 |
| Trust Account interest income | $230,730 |
| Net loss | $46,744 |
| Basic and diluted loss per share | $0.00 loss as displayed (rounded) |
| Cash outside Trust Account | $728,509 |
| Cash and investments in Trust Account | $500,320,412 |
| Accounts payable and accrued offering costs | $131,582 |
| Deferred underwriting compensation | $19,500,000 |
| Net cash used in operating activities | $48,622 |
The MD&A says the company incurred an “operating” loss of $46,744, but the statement of operations reports operating loss of $277,474 and net loss of $46,744. The statement values are used above; the MD&A wording is inconsistent.
Changes versus prior period
Compared with December 31, 2015, cash outside the trust fell from $1,007,861 to $728,509. Trust assets increased from $500,089,682 to $500,320,412. Total liabilities were nearly unchanged at $19,631,582 versus $19,633,460. The filing provides no prior-year first-quarter income statement comparison, so year-over-year operating trends cannot be assessed from this report.
Outlook, risks and contingencies
- The company had 24 months from the September 16, 2015 offering closing to complete a business combination; otherwise it would wind up and redeem public shares under the disclosed terms.
- Management expected continued acquisition-search costs and said additional funding could be needed if costs exceed estimates or a transaction requires it. Sponsor and affiliate loans were possible but not committed; inability to fund working capital could impair the company’s ability to continue as a going concern.
- The trust held short-term U.S. Treasury securities and cash. Management viewed interest-rate exposure as not material given their short maturities; no hedging activities had been undertaken.
- The $19.5 million deferred underwriting fee is payable only upon completion of a business combination. The company reported no long-term debt, off-balance-sheet arrangements, or legal proceedings.
- Public shareholders could redeem shares in connection with a transaction, subject to the $5,000,001 net tangible asset floor. The filing discusses potential dilution and financing risks from issuing equity or debt.
- No specific financial guidance or transaction outlook was provided. Management reported disclosure controls were effective and no material change in internal control during the quarter.
Investor facts to verify
- Confirm the filing’s issuer: it identifies Double Eagle Acquisition Corp., not WillScot Holdings Corp.
- Reconcile the MD&A’s stated $46,744 operating loss with the financial statements’ $277,474 operating loss and $46,744 net loss.
- Verify available cash outside the trust against expected acquisition-search expenses and any prospective financing needs.
- Track business-combination progress, shareholder redemptions, the 24-month deadline, and whether the deferred underwriting fee becomes payable.
- Review the cited 2015 Form 10-K and prospectus for the underlying risk factors and offering terms.