Filing identity and reporting period
Important mismatch: The supplied filing is Double Eagle Acquisition Corp.’s Form 10-Q for the quarter ended September 30, 2016—not a WillScot Holdings Corp. filing. Double Eagle was a blank-check company seeking a business combination, not an operating modular-space business.
Financial results and liquidity
- Revenue: None reported for the three or nine months ended September 30, 2016.
- Net income: $190,937 for the quarter and $285,396 for the nine months, primarily reflecting $328,313 and $827,797, respectively, of trust-account interest. General and administrative expense was $137,376 and $542,401.
- Cash flow: Nine-month operating cash provided was $165,365; trust investments used $827,797, leaving cash outside the trust of $345,429, down from $1,007,861 at year-end 2015.
- Balance sheet: Assets totaled $501.4 million, including $500.9 million held in trust. Current liabilities were $112,671; total liabilities were $19.6 million, including $19.5 million of deferred underwriting compensation payable only if a business combination closes. The filing reports no long-term debt.
- Equity and redemptions: 47,674,947 Class A shares were classified as subject to possible redemption at $476.7 million. Permanent shareholders’ equity was $5.0 million.
- Margins: Not meaningful because the company had no revenue.
Changes versus prior period
Against the prior-year comparison—which covers only the period from inception on June 26, 2015, through September 30, 2015—the company moved from a $9,793 quarterly loss to $190,937 quarterly income; trust interest rose from $1,096 to $328,313. Nine-month 2016 results are not directly comparable to the prior-year inception-period figures. Versus December 31, 2015, cash outside the trust fell by $662,432, while trust assets increased by about $827,797.
Outlook, risks, and unusual items
- The company had until September 16, 2017, 24 months after its IPO closing, to complete a business combination; otherwise it was required to wind up and redeem public shares under the stated terms. Management said mandatory liquidation raised substantial doubt about the company’s ability to continue as a going concern.
- Management expected further acquisition-search costs and said additional financing might be needed if costs exceeded estimates or to complete a transaction. Sponsor and insider loans were not committed.
- The trust held short-term U.S. Treasury securities and cash. Management considered interest-rate exposure immaterial given the short maturities.
- A business combination required a target meeting the stated 80% trust-asset fair-value test, subject to other conditions. Public-share redemptions could reduce funds available, and any transaction could involve dilution or new debt.
- The $19.5 million deferred underwriting fee was contingent on completing a business combination. No legal proceedings or material changes to previously disclosed risk factors were reported. Management concluded disclosure controls were effective.
Investor verification points
- Verify the filing belongs to Double Eagle Acquisition Corp.; it does not report WillScot results.
- Check the trust balance, redemption terms, and the September 16, 2017 combination deadline stated in this 2016 filing.
- Confirm whether a business combination occurred, and how public-share redemptions and the deferred underwriting fee were ultimately handled.
- Review subsequent filings for financing needs, expenses, and developments affecting the going-concern uncertainty.