PSQ Holdings, Inc. current report, 27 February 2023

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Business Context and Reporting Period

Colombier Acquisition Corp. filed this Form 8-K on February 28, 2023, reporting events occurring February 27, 2023. The filing concerns its proposed business combination with PSQ Holdings, Inc.; upon closing, Colombier is expected to change its name to PSQ Holdings, Inc. The filing is primarily transaction-related and does not provide a current operating-period financial report for PSQ.

Transaction Terms and Key Financial Metrics

  • Colombier, its wholly owned merger subsidiary, its sponsor and PSQ entered into an Agreement and Plan of Merger.
  • PSQ stockholders are expected to receive newly issued Colombier common stock with an aggregate value of $200.0 million, subject to adjustment for PSQ closing debt net of cash.
  • Up to 3.0 million additional Class A shares may be issued as earn-out consideration over the five years following closing if the post-closing Class A stock achieves volume-weighted average trading prices of $12.50, $15.00 and $17.50, with 1.0 million shares tied to each threshold.
  • Shares held by PSQ founder Michael Seifert will convert into Class C common stock with enhanced voting power. Class C shares may be converted into Class A shares and generally convert automatically upon specified events, including the founder no longer serving as an officer or director, death or incapacity, or a substantial reduction in Class C shares.
  • Closing conditions include Colombier having at least $5,000,001 of net tangible assets and PSQ receiving PCAOB-audited 2022 financial statements by March 9, 2023.
  • At closing, Colombier must have at least $33.0 million of cash and cash equivalents, including any concurrent PIPE financing, after redemptions and unpaid expenses. This amount may be reduced by qualifying transaction expenses, up to $15.0 million, and qualifying PSQ financing proceeds.
  • PSQ may terminate if it cannot obtain at least $15.0 million of permitted equity or debt financing by May 15, 2023, subject to notice requirements.
  • The filing does not provide clear values for PSQ revenue, profit or loss, operating cash flow, margins, debt, cash balance, liquidity, or comparable-period changes.

Material Changes, Outlook, Risks and Unusual Items

  • The material change is the execution of the merger agreement and related sponsor support, stockholder support and lock-up agreements; the transaction had not yet closed as of the filing.
  • Colombier expects to file a Form S-4 registration statement containing a proxy statement and prospectus. Closing requires approval by both Colombier and PSQ stockholders, effectiveness of the registration statement, applicable antitrust clearance, exchange listing approval and satisfaction of other customary conditions.
  • The outside date for closing is September 11, 2023, subject to a possible extension by Colombier to the earlier of its applicable SPAC deadline or December 31, 2023.
  • If certain termination events occur, including PSQ's failure to obtain the required permitted financing or certain uncured breaches, PSQ may owe Colombier a termination fee equal to 50% of qualifying permitted-financing proceeds actually received before termination.
  • Colombier's sponsor agreed to waive specified anti-dilution rights and to forfeit portions of its shares and warrants based on redemptions exceeding the stated threshold.
  • Certain PSQ holders agreed to vote in favor of the transaction. Other PSQ holders agreed to a one-year lock-up, subject to customary exceptions and an early release based on the Class A stock price reaching $12.00 after the 150th day following closing.
  • Key risks include failure to obtain stockholder or regulatory approvals, insufficient cash after redemptions, failure to secure financing, inability to satisfy listing requirements, termination before closing, litigation, competitive and regulatory changes, customer and business growth risks, intellectual-property matters, loss of key promoters or reputation, and broader economic conditions.
  • The filing includes forward-looking statements regarding the transaction, financing, redemptions, future performance and expected benefits. The filing states that such statements have not been independently verified and that actual results may differ materially.

Investor Verification Checklist

  • Verify the Form S-4, definitive proxy statement and subsequent filings for PSQ's audited financial statements, revenue, profitability, cash flow, debt and liquidity.
  • Verify the final merger consideration calculation, including adjustments for PSQ closing debt net of cash and any financing proceeds.
  • Verify the amount remaining in Colombier's trust account, expected redemptions, PIPE or other financing, transaction expenses and compliance with the minimum cash condition.
  • Verify stockholder approvals, regulatory clearance, registration-statement effectiveness, exchange listing approval and the actual closing date.
  • Review the post-closing capitalization, founder's Class C voting control, earn-out dilution and sponsor forfeiture provisions.
  • Review the complete merger agreement and omitted schedules, which the filing states will be furnished supplementally to the SEC upon request.