WASHINGTON,
| ☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
For the fiscal year ended December 31, 2018
| For the fiscal year ended December 31, 2023 | |||||
| OR | |||||
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to |
For the transition period from ______________ to ______________
COLLIER CREEK HOLDINGS
| Delaware | 85-2751850 | ||||||||||
| (State or other jurisdiction of incorporation) | (IRS Employer Identification No.) | ||||||||||
200 Park Avenue, 58th Floor
New York, New York 10166
Not Applicable(Former name or former address, if changed since last report)
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
| UTZ | ||||||||||||||
| New York Stock Exchange | |||||||||||||
◻
⌧
◻
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x
◻
| Large accelerated filer | ☒ | Accelerated filer | ||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
| Emerging growth company | ☐ | |||||||||||||
☐
As of December 31, 2018, the⌧
July 2, 2023.
outstanding.
COLLIER CREEK HOLDINGS
ANNUAL REPORT ON FORM 10-K
TABLE OF CONTENTS
| Page | ||||||||||
| Part I | ||||||||||
| Item 1. | ||||||||||
| Item 1A. | ||||||||||
| Item 1B. | ||||||||||
| Item | ||||||||||
| Item 2. | ||||||||||
| Item 3. | ||||||||||
| Item 4. | ||||||||||
| Item 5. | ||||||||||
| Item 6. | ||||||||||
| Item 7. | ||||||||||
| Item 7A. | ||||||||||
| Item 8. | ||||||||||
| Item 9. | ||||||||||
| Item 9A. | ||||||||||
| Item 9B. | ||||||||||
| Item 9C. | ||||||||||
| Part III | ||||||||||
| Item 10. | ||||||||||
| Item 11. | ||||||||||
| Item 12. | ||||||||||
| Item 13. | ||||||||||
| Item 14. | ||||||||||
| Item 15. | ||||||||||
| Item 16. | ||||||||||
CERTAIN TERMS
Unless otherwise stated in
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained in this Annual Report may constitute “forward-looking statements” for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Annual report may include, for example, statements about:
The forward-looking statements contained in this Annual Report are based on ourCompany management’s current expectations, forecasts and beliefs concerning future developmentsassumptions, and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of judgments, known and unknown risks and uncertainties, (someand other factors, many of which are beyond our control)outside the control of the Company and its directors, officers and affiliates. Accordingly, forward-looking statements should not be relied upon as representing the Company’s views as of any subsequent date. The Company does not undertake any obligation to update, add or other assumptionsto otherwise correct any forward-looking statements contained herein to reflect events or circumstances after the date they were made, whether as a result of new information, future events, inaccuracies that become apparent after the date hereof or otherwise, except as may cause actualbe required under applicable securities laws.
We are a blank check company incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this Annual Report as our initial business combination.
We seek to capitalize on the more than 80 years of combined experience of our founders Roger K. Deromedi, Jason K. Giordano and Chinh E. Chu. Our founders have known and had business relationships with one another for over 10 years. We believe our founders’ distinctive and complementary backgrounds can have a transformative impact on a target business. Although we may pursue targets in any industry, we intend to focus our search for a business combination target on businesses that complement our management team’s experience acquiring and operating businesses in the consumer goods industry and related sectors. Our founders intend to focus our efforts on companies where we believe the combination of our founders’ operating experience, deal-making track record, professional relationships, and capital markets expertise can be catalysts to enhance the growth potential and value of a target business and provide opportunities for an attractive return to our shareholders.
Our Founders
Our founder Roger K. Deromedi has over 40 years of operational experience in the consumer goods sector, overseeing multiple businesses and iconic consumer brands. Most recently, Mr. Deromedi was Independent Chairman and Lead Director of Pinnacle Foods, Inc., or Pinnacle Foods (NYSE: PF), a manufacturer and marketer of consumer branded food products whose key brands includeBirds Eye,Duncan Hines, Vlasic, Wishbone,Aunt Jemima,Mrs. Butterworth,Log Cabin,Udi’s,Glutino andGardein, among others. Mr. Deromedi served as either Independent or Non-Executive Chairman of Pinnacle Foods from 2009 to 2018, including through its initial public offering in 2013, and served as its Executive Chairman from 2007 to 2009. From 2013 to 2015, Mr. Deromedi was an Executive Advisor for The Blackstone Group L.P., or Blackstone, in the consumer goods sector and was an independent advisor to Blackstone from 2007 to 2013, including advising Blackstone on its purchase of Pinnacle Foods in 2007. From 2003 to 2006, Mr. Deromedi was Chief Executive Officer of Kraft Foods, Inc., or Kraft, at the time one of the world’s largest food companies, with iconic brands such asKraft,Maxwell House,Nabisco,Oscar Mayer andPhiladelphia. During this time, he integrated Kraft’s separate North American and International businesses. Prior to this, he was Co-Chief Executive Officer of Kraft from 2001 to 2003 during which time there was an initial public offering of the company in 2001, raising approximately $8.7 billion in gross proceeds. Mr. Deromedi was previously President of Kraft Foods International, President of the company’s Asia Pacific business and President of Kraft’s Western European business, based in Zurich. He also served as Area Director of the company’s business in France, Iberia and Benelux, based in Paris, and was General Manager of Kraft’s cheese and specialty products businesses in the United States. He began his career with General Foods, Kraft’s predecessor company, in 1977 where he held various marketing positions. Mr. Deromedi previously served on the board of directors of Pinnacle Foods, Kraft and The Gillette Company, Inc.
Our founder Jason K. Giordano has over 15 years of investment and acquisition experience, with a focus in consumer goods and related sectors. Mr. Giordano has been a Senior Managing Director at CC Capital Partners LLC, or CC Capital, since November 2018. Previously, Mr. Giordano was a Managing Director in the private equity group at Blackstone where he oversaw investments in the consumer, education, packaging and chemicals sectors. During his over 11 year tenure at Blackstone from 2006 to 2017, Mr. Giordano was involved in 12 initial and follow-on acquisitions representing over $10 billion of transaction value, including several investments in consumer, retail and related businesses. Prior to Blackstone, Mr. Giordano was a private equity investment professional at Bain Capital, LP and an investment banker with Goldman, Sachs, & Co. Mr. Giordano has served on the board of directors of numerous public and private companies, including Pinnacle Foods, Inc., a U.S.-based manufacturer and marketer of branded food products, Crocs, Inc. (Nasdaq: CROX), a global supplier of branded footwear, AVINTIV Inc., or AVINTIV, a global supplier of specialty materials primarily sold to consumer goods manufacturers, Outerstuff LLC, a leading U.S. supplier of licensed children’s sports apparel, and Ascend Learning, LLC, a provider of online professional training tools and educational software. He also served as a board advisor to Trilliant Food & Nutrition LLC, a manufacturer of private label food and beverage products.
Our founder Chinh E. Chu has over 25 years of investment and acquisition experience. In 2016, Mr. Chu co-founded CF Corporation for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. On November 30, 2017, CF Corporation consummated the acquisition of Fidelity & Guaranty Life, a provider of annuities and life insurance products (the “FGL business combination”). In connection with the FGL business combination, the name of the company was changed from “CF Corporation” to “FGL Holdings” (NYSE: FG). Mr. Chu serves as Co-Executive Chairman of FGL Holdings. Mr. Chu is also the Founder and the Managing Partner of CC Capital, a private investment firm. Mr. Chu was previously a Senior Managing Director at Blackstone, where he was the longest tenured partner other than Stephen A. Schwartzman. During the period from 1990 to 2015, Mr. Chu led numerous investments across multiple sectors, including technology, financial services, chemicals, specialty pharma and healthcare products, and packaging. Mr. Chu also served, at various points, as the Co-Chair of Blackstone’s Private Equity Executive Committee, a member of Blackstone Capital Partners’ Investment Committee and a member of Blackstone’s Executive Committee. Mr. Chu currently serves as a director of The Dun & Bradstreet Corporation, FGL Holdings, NCR Corporation (NYSE: NCR) and Stearns Mortgage and has previously served as a director of various companies including AVINTIV, Graham Packaging, Kronos Incorporated, SunGard Data Systems, Inc., the London International Financial Futures and Options Exchange, BankUnited Inc., Celanese Corporation, Nalco Company, Nycomed, Stiefel Laboratories and AlliedBarton Security Services.
Our founders have known or worked together for over 10 years. From 2006 to 2015, our founders worked with one another as private equity investment professionals or advisors to Blackstone, evaluating numerous investment opportunities and serving together on boards of directors. Mr. Deromedi served as either Executive Chairman or Chairman of the board of directors of Pinnacle Foods from 2007 to 2018, where Mr. Giordano served as a director from 2007 to 2015. During Mr. Deromedi’s tenure, Pinnacle Foods reported that its Adjusted EBITDA nearly tripled from 2007 to 2017 as net income (loss) grew from $(115.4) million to $532.2 million, while Adjusted EBITDA as a percentage of net sales expanded by over 600 basis points over the same period. Over that time, Pinnacle Foods acquired and successfully integrated multiple businesses including Birds Eye Foods, Wishbone, Gardein and Boulder Brands, consistently meeting or exceeding synergy targets. From its initial public offering in March 2013 to its sale to ConAgra Foods in October 2018, the share price of Pinnacle Foods’s common stock increased by 233.3% (as of October 23, 2018), representing a 24.1% annualized return, or approximately 6.1x the increase in the S&P 500 Consumer Staples index and 3.2x the increase in the S&P 500 index over the same time period. Mr. Chu and Mr. Giordano also served together on the board of directors of AVINTIV. AVINTIV (f/k/a Polymer Group, Inc.) is a manufacturer of specialty materials primarily sold to consumer goods companies for various applications, including baby diapers, feminine hygiene products, disinfecting or facial wipes, and other applications. From 2011 to 2015, AVINTIV successfully acquired and integrated three complementary businesses that expanded its geographic reach and product offering. AVINTIV was acquired by Blackstone in 2011 for approximately $850 million and sold to a strategic buyer in 2015 for approximately $2.45 billion.
Business Strategy
Our business strategy is to identify and complete our initial business combination with a company that complements the experiences and skills of our management team and can benefit from their operational expertise. Our selection process leverages our founders’ broad and deep relationship network, unique industry experiences and proven deal sourcing capabilities to access a broad spectrum of differentiated opportunities. This network has been developed through our founders’ extensive experience and demonstrated success in both investing in and operating businesses in our target sectors and across a variety of industries, including:
We believe that our management team is well positioned to identify attractive business combination opportunities with a compelling industry backdrop and an opportunity for transformational growth. Our founders’ objectives are to generate attractive returns for shareholders and enhance value through improving operational performance of the acquired company. We intend to favor opportunities with certain industry and business characteristics. Key industry characteristics include stable long-term growth trends and industry fundamentals, attractive competitive dynamics, opportunities to benefit from secular changes in consumer behavior (including shifting consumer demographics, changing consumer shopping behaviors and evolving consumer preferences), limited “fad” or technological disruption risks and potential consolidation opportunities. Key business characteristics include predictable and recurring revenues, attractive market positions and competitive advantages, strong operating margins and free cash flow characteristics, opportunities for operational improvement and scalable business models.
Our sponsor and our independent directors have agreed to make an aggregate investment of $35,000,000 in us at the time of our initial business combination. We entered into forward purchase agreements with our sponsor and our independent directors which provide for the purchase of an aggregate of 3,500,000 Class A ordinary shares, plus an aggregate of 1,166,666 redeemable warrants to purchase one Class A ordinary share at $11.50 per share, for an aggregate purchase price of $35,000,000, or $10.00 per Class A ordinary share, in a private placement to close concurrently with the closing of our initial business combination. These purchases will be made regardless of whether any Class A ordinary shares are redeemed by our public shareholders. The forward purchase securities will be issued only in connection with the closing of the initial business combination. The proceeds from the sale of forward purchase securities may be used as part of the consideration to the sellers in our initial business combination, expenses in connection with our initial business combination or for working capital in the post-transaction company.
Acquisition Criteria
Consistent with our business strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective target businesses. We use these criteria and guidelines in evaluating acquisition opportunities, but we may decide to enter into our initial business combination with a target business that does not meet these criteria and guidelines. We seek to acquire companies that we believe:
These criteria are not intended to be exhaustive. Any evaluationconcerns relating to the meritsquality and safety of a particular initial business combinationour products, ingredients or packaging, processing techniques, and other environmental, social or governance matters, which in turn could negatively impact our operating results.
Our Acquisition Process
In evaluating a prospective target business, we intend to conduct a thorough due diligence review that will encompass, among other things, meetings with incumbent management and employees, document reviews and inspection of facilities, as well as a review of financial and other information that will be made available to us.
We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers or directors. In the event we seek to complete our initial business combination with a company that is affiliated with our sponsor, officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm which is a member of FINRA or an independent accounting firm that our initial business combination is fair to our company from a financial point of view.
Members of our management team and our independent directors directly or indirectly own founder shares and/or private placement warrants as well as entered into agreements to purchase forward purchase securities and, accordingly,unsold food products may have a conflict of interestsignificant impact on our operating results and may disrupt our customer relationships.
Each offrom private label, generic or store branded products which may result in price point pressures, leading to decreased demand for our officers and directors presently has, and any of themproducts.
In addition, our sponsorinto other geographic markets.
We previously filed a registration statement on Form 8-A withinto other geographic markets.
Significant activities since inception
On October 10, 2018, the company consummated the initial public offering of 44,000,000 units, including the issuance of 4,000,000 unitsincreases in tax basis in UBH’s assets as a result of the underwriters’ partial exercisesale of their over-allotment option, at $10.00 per Unit, generating gross proceeds of $440 million,Common Company Units for the cash consideration in the Business Combination, the purchase and incurring offering costs of approximately $25.02 million, inclusive of $15.45 million in deferred legal fees and underwriting commissions.
Simultaneously with the closingredemption of the initial public offering,common units and preferred units by the company consummatedContinuing Members and the private placementfuture exchange of 7,200,000 private placement warrants at a pricethe Common Company Units for shares of $1.50 per warrantClass A Common Stock (or cash) pursuant to the sponsor, generating gross proceedsThird Amended and Restated Limited Liability Company Agreement and certain other tax attributes of $10.8 million.
UponUBH and tax benefits related to entering into the closing of the initial public offering and the private placement, $440 million ($10.00 per unit) of the net proceeds of the sale of the units in the initial public offering and the private placement was placed in a trust account and was invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the company meeting the conditions of paragraphs (c)(2), (c)(3) and (c)(4) of Rule 2a-7 of the Investment Company Act, as determined by the company, until the earlier of: (i) the completion of an initial business combination and (ii) the distribution of the trust account as described below.
Our units began trading on October 5, 2018 on the New York Stock Exchange (the “NYSE”)TRA, making payments under the symbol “CCH.U.” Commencing on November 26, 2018,TRA, and those payments may be substantial.
Initial Business Combination
The rules of the NYSE requirecould delay or discourage takeover attempts that we must consummate an initial business combination with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the trust account (net of amounts disbursed to management for working capital purposes and excluding the amount of any deferred underwriting discount held in trust) at the timestockholders may consider favorable.
We anticipate structuring our initial business combination so that the post-transaction company in which our public shareholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test. If the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses.
Target Industry Overview
We intend to focus our search for a business combination target in the consumer goods industry and related sectors. We believe these areas represent attractive segments of the economy in which to execute an initial business combination and generate attractive returns for our shareholders.
We believe there are numerous founder- and privately-owned businesses in these sectors that could benefit from our active ownership, operating model and capital to scale their businesses. We also believe that there may be opportunities to effectuate corporate carve-outs of non-core businesses that could benefit from increased attention and investment under our ownership. We believe this opportunity is enhanced by recent consolidation in the sector (which could fuel corporate divestures and portfolio rationalization) and recent reductions to federal corporate tax rates (which may increase net proceeds to corporate sellers). We believe we represent an attractive business combination alternative to owners in our target sectors given (a) the significant demand for equities by public market investors who understand these sectors and often value the perceived stability and cash flow generation of consumer and related assets, (b) the potential for well-run, diversified and scaled businesses to trade at a premium relative to potential private transaction values for smaller consumer and related assets and (c) our potential to add significant value to target businesses through our management team’s experience and operational strategies. We also believe consumer goods and related sectors may present attractive returns for investors during this stage in the economic cycle as our experience has shown that numerous sub-segments, such as consumer staples, have historically exhibited limited cyclicality and resilience to economic recessions.
Although we expect the consumer goods industry and related sectors to offer an array of potential target businesses with relatively stable and recurring cash flows, the sector is undergoing a number of fundamental changes which we believe will impact relative growth rates and performance going forward. These changes include shifting consumer demographics (including an increase in ethnic diversity, the aging of baby boomers, and the transition of millennials into prime spending years), changing consumer shopping behaviors (including the increased use of technology by consumers to research and purchase consumer goods and by brand owners to cost-effectively communicate with consumers) and evolving consumer preferences (including an increased focus on health and wellness, an expanding appeal for customized, authentic or local products, a growing focus on social responsibility, a shift of consumer spending toward experiences and the bifurcation of spending into premium and value purchases). The retail segment is also experiencing significant change, including disruption of substantial portions of the industry by technology and direct-to-consumer distribution models.
We intend to focus our search for a business combination target on fundamentally sound businesses that we believe have a competitive advantage, can be industry leaders, can scale rapidly, can capitalize on one or more of the above trends, and where there is substantial opportunity for operational improvements. We intend to avoid target businesses experiencing or at significant risk of experiencing material disruption to their businesses from technology, shifting consumer preferences or other factors.
Operating Model
We intend to focus our search for a business combination target on businesses that can benefit from the industry knowledge and operational experience of our management team and where we believe there are opportunities for operational improvements. We believe we can generate attractive returns for our investors in relatively stable industry sub-sectors through implementation of our operational strategies focused on enhancing organic growth, realizing supply chain efficiencies and streamlining costs and pursuing strategic acquisitions that enhance the overall business profile and offer significant synergy opportunities. Our strategies to enhance organic growth may include accelerating revenues of existing products through innovation, sales enhancements, improving returns on marketing investments, optimizing promotional spending, or other process improvements. They may also include expanding revenues via new product offerings or expansion into new channels of distribution or geographic areas. Our strategies to realize supply chain efficiencies and streamline costs may include implementation of company-wide productivity programs (including “LEAN” or similar initiatives), investments in technology or equipment, optimization of procurement (including through e-auctions and other tools), reducing distribution costs (including through use of technology and software tools), and refinements to organizational structure, reporting layers, spans of control and other variables. We also intend to evaluate strategic follow-on acquisitions that may accelerate our revenue growth, enhance our market position or generate meaningful cost synergies. We believe the effective implementation of the above strategies has the potential to meaningfully accelerate earnings growth of a target business. Our experience has shown such improved performance can also result in public market investors or potential acquirers valuing the company at a higher multiple of earnings or cash flows, further enhancing shareholder returns. While there can be no guarantees we will identify a target where each or any of these strategies is applicable or that we will effectively implement these strategies, we believe our management’s experience pursuing similar strategies will be attractive to potential sellers, management teams and our shareholders.
Status as a Public Company
We believe our structure makes us an attractive business combination partner to target businesses. As an existing public company, we offer a target business an alternative to a traditional initial public offering through a merger or other business combination with us. In a business combination transaction with us, the owners of the target business may, for example, exchange their shares of stock in the target business for our Class A ordinary shares (or shares of a new holding company) or for a combination of our Class A ordinary shares and cash, allowing us to tailor the consideration to the specific needs of the sellers. We believe target businesses will find this method a more expeditious and cost effective method to becoming a public company than a typical initial public offering. The typical initial public offering process can take a significantly longer period of time than a potential transaction with us, and there are significant expenses in the initial public offering process, including underwriting discounts and commissions, that may not be present to the same extent in connection with a business combination with us.
Furthermore, once a proposed business combination is completed, the target business will have effectively become public, whereas an initial public offering is always subject to the underwriters’ ability to complete the offering, as well as general market conditions, which could prevent the offering from occurring. Once public, we believe the target business would then have greater access to capital, an additional means of providing management incentives consistent with shareholders’ interests and the ability to use its shares as currency for acquisitions. Being a public company can offer further benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting talented employees.
While we believe that our structure and our management team’s background makes us an attractive business partner, some potential target businesses may view our status as a special purpose acquisition company, including our lack of an operating history and our potential need to seek shareholder approval of a proposed initial business combination, negatively.
We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our initial public offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A ordinary shares that is held by non-affiliates exceeds $700 million as of the prior June 30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
Financial Position
As of December 31, 2018, the net proceeds from our initial public offering, the private placement of warrants and the sale of the forward purchase securities provide us with approximately $460,779,187 that we may use to complete our initial business combination (after payment of offering costs, including the $15,450,000 in deferred underwriting commissions and deferred legal fees). We offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt ratio. Because we are able to complete our initial business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its needs and desires. However, we have not taken any steps to secure third party financing and there can be no assurance it will be available to us.
Effecting Our Initial Business Combination
General
We are not presently engaged in, and we will not engage in, any operations for an indefinite period of time following our initial public offering. We intend to effectuate our initial business combination using cash from the proceeds of our initial public offering, the private placements of the private placement warrants and the forward purchase securities, our equity, debt or a combination of these or other sources as the consideration to be paid in our initial business combination.
If our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemptions of our Class A ordinary shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.
We may need to obtain additional financing to complete our initial business combination, either because the transaction requires more cash than is available from the proceeds held in our trust account and the proceeds from the issuance of the forward purchase securities or because we become obligated to redeem a significant number of our public shares upon completion of the business combination, in which case we may issue additional securities or incur debt in connection with such business combination. There are no prohibitions on our ability to issue securities or incur debt in connection with our initial business combination. Other than the forward purchase agreements, we are not currently a party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities, the incurrence of debt or otherwise.
Sources of Target Businesses
Our process of identifying acquisition targets leverages our management team’s unique industry experiences, proven deal sourcing capabilities and broad and deep network of relationships, including executives and management teams, private equity groups and other institutional investors, large business enterprises, lenders, investment bankers and other investment market participants, consultants, attorneys and accountants, which we believe should provide us with a number of business combination opportunities. The collective experience, capability and network of our founders, directors and officers, combined with their individual and collective reputations in the investment community, helps to create prospective business combination opportunities.
In addition, we anticipate that target business candidates may be brought to our attention from various unaffiliated sources, including investment bankers and private investment funds. Target businesses may be brought to our attention by such unaffiliated sources as a result of being solicited by us through calls or mailings. These sources may also introduce us to target businesses in which they think we may be interested on an unsolicited basis, since many of these sources will have read our final prospectus relating to our initial public offering and know what types of businesses we are targeting. Our officers and directors, as well as their affiliates, may also bring to our attention target business candidates of which they become aware through their business contacts as a result of formal or informal inquiries or discussions they may have, as well as attending trade shows or conventions.
While we do not presently anticipate engaging the services of professional firms or other individuals that specialize in business acquisitions on any formal basis, we may engage these firms or other individuals in the future, in which event we may pay a finder’s fee, consulting fee or other compensation to be determined in an arm’s length negotiation based on the terms of the transaction. We will engage a finder only to the extent our management determines that the use of a finder may bring opportunities to us that may not otherwise be available to us or if finders approach us on an unsolicited basis with a potential transaction that our management determines is in our best interest to pursue. Payment of a finder’s fee is customarily tied to completion of a transaction, in which case any such fee will be paid out of the funds held in the trust account. In no event, however, will our sponsor or any of our existing officers or directors, or any entity with which they are affiliated, be paid any finder’s fee, consulting fee or other compensation by the company (other than as outlined below) for services rendered prior to, or for any services they render in order to effectuate, the completion of our initial business combination (regardless of the type of transaction that it is). However, beginning with the consummation of our initial public offering, we will pay $10,000 per month to an affiliate of our sponsor for office space, secretarial and administrative services provided to members of our management team and our sponsor, executive officers and directors, or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Any such payments prior to our initial business combination will be made from funds held outside the trust account.
We are not prohibited from pursuing an initial business combination with a business combination target that is affiliated with our sponsor, officers or directors, or from making the acquisition through a joint venture or other form of shared ownership with our sponsor, officers or directors. In the event we seek to complete our initial business combination with a business combination target that is affiliated with our sponsor, executive officers or directors, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm which is a member of FINRA or an independent accounting firm, that such an initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
Evaluation of a Target Business and Structuring of Our Initial Business Combination
In evaluating a prospective target business, we intend to conduct a thorough due diligence review which may encompass, among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as applicable, as well as a review of financial, operational, legal and other information which will be made available to us. If we determine to move forward with a particular target, we will proceed to structure and negotiate the terms of the business combination transaction.
The time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of, and negotiation with, a prospective target business with which our initial business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination.
Lack of Business Diversification
For an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend entirely on the future performance of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business. By completing our initial business combination with only a single entity, our lack of diversification may:
Limited Ability to Evaluate the Target’s Management Team
Although we will scrutinize closely the management of a prospective target business when evaluating the desirability of effecting our initial business combination with that business, our assessment of the target business’s management may not prove to be correct. In addition, the future management may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of our management team, if any, in the target business cannot presently be stated with any certainty. The determination as to whether any of the members of our management team will remain with the combined company will be made at the time of our initial business combination. While it is possible that one or more of our directors will remain associated in some capacity with us following our initial business combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our initial business combination. Moreover, we cannot assure you that members of our management team will have significant experience or knowledge relating to the operations of the particular target business.
We cannot assure you that any of our key personnel will remain in senior management or advisory positions with the combined company. The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our initial business combination.
Following a business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that westockholders will have the ability to recruit additional managers,significantly influence our business and management.
Shareholders May Not Have#3 salty snack brand platform in the AbilityUS, representing 4.4% of total salty snacks category retail sales.
We may conduct redemptions without a shareholder vote pursuant to the tender offer rules of the SEC subject to the provisionsprimary packaging materials include flexible films and rigid containers, such as barrels, lids, cartons, and trays. All of our amendedcore ingredients are purchased according to rigorous standards to assure food quality and restated memorandumsafety. Our principal ingredients are generally available from multiple suppliers, but became more difficult to source beginning in 2021 and articles of association. However, we will seek shareholder approval if it is required by law or applicable stock exchange rule, or we may decidecontinuing into 2023 due to seek shareholder approval for business or other legal reasons.
Under the NYSE’s listing rules, shareholder approval would be required for our initial business combination if, for example:
Permitted Purchases of Our Securities
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, initial shareholders, directors, executive officers, advisors or their affiliates may purchase shares or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase shares or public warrants in such transactions. If they engage in such transactions, they will not make any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act.
In the event that our sponsor, initial shareholders, directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares.ongoing supply chain constraints. We do not currently anticipate that such purchases, ifsource any would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules.
The purpose of any such purchases of shares could be to (i) vote such shares in favor of the business combination and thereby increase the likelihood of obtaining shareholder approval of the business combination or (ii) to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears thattop 10 inputs under any single-supplier arrangement. As such, requirement would otherwise not be met. The purpose of any such purchases of public warrants could bewe have been able to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrantholders for approval in connection with our initial business combination. Any such purchases of our securities may resultmake satisfactory alternative arrangements in the completionevent of this interruption of supply from our initial business combination that may not otherwise have been possible.
In addition, if suchsuppliers. No single category of direct material purchases are made, the public “float” of our Class A ordinary shares or public warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
Our sponsor, initial shareholders, officers, directors and/or their affiliates anticipate that they may identify the shareholders with whom our sponsor, initial shareholders, officers, directors or their affiliates may pursue privately negotiated purchases by either the shareholders contacting us directly or by our receipt of redemption requests submitted by shareholders (in the case of Class A ordinary shares) following our mailing of proxy materials in connection with our initial business combination. To the extent that our sponsor, officers, directors, advisors or their affiliates enter into a private purchase, they would identify and contact potential selling shareholders who have expressed their election to redeem their shares for a pro rata share of the trust account or vote against our initial business combination, whether or not such shareholder has already submitted a proxy with respect to our initial business combination but only if such shares have not already been voted at the shareholder meeting related to our initial business combination. Our sponsor, executive officers, directors, advisors or any of their affiliates will select which shareholders to purchase shares from based on the negotiated price and number of shares and any other factors that they may deem relevant, and will only purchase shares if such purchases comply with Regulation M under the Exchange Act and the other federal securities laws.
Our sponsor, officers, directors and/or their affiliates will not make purchases of shares if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements.
Redemption Rights for Public Shareholders upon Completion of Our Initial Business Combination
We will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination, including interest (net of taxes paid or payable), divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be $10.00 per public share. The per share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. The redemption right will include the requirement that any beneficial owner on whose behalf a redemption right is being exercised must identify itself in order to validly redeem its shares. Our initial shareholders entered into agreements with us, pursuant to which they agreed to waive their redemption rights with respect to their founder shares and public shares in connection with the completion of our initial business combination. The other members of our management team entered into agreements similar to the one entered into by our sponsor with respect to any public shares acquired by them in or after our initial public offering.
Limitations on Redemptions
Our amended and restated memorandum and articles of association provide that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SEC’s “penny stock” rules). However, the proposed business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration we would be required to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, and all Class A ordinary shares submitted for redemption will be returned to the holders thereof.
Manner of Conducting Redemptions
We will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination either (i) in connection with a shareholder meeting called to approve the business combination or (ii) by means of a tender offer. The decision as to whether we will seek shareholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek shareholder approval under applicable law or stock exchange listing requirement or whether we were deemed to be a foreign private issuer (which would require a tender offer rather than seeking shareholder approval under SEC rules). Asset acquisitions and share purchases would not typically require shareholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our outstanding ordinary shares or seek to amend our amended and restated memorandum and articles of association would require shareholder approval. We currently intend to conduct redemptions in connection with a shareholder vote unless shareholder approval is not required by applicable law or stock exchange listing requirement and we choose to conduct redemptions pursuant to the tender offer rules of the SEC for business or other legal reasons.
If we held a shareholder vote to approve our initial business combination, we will, pursuant to our amended and restated memorandum and articles of association:
In the event that we seek shareholder approval of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our public shareholders with the redemption rights described above upon completion of the initial business combination.
If we seek shareholder approval, we will complete our initial business combination only if a majority of the ordinary shares voted are voted in favor of the business combination. In such case, our initial shareholders agreed to vote their founder shares and any public shares purchased during or after our initial public offering in favor of our initial business combination. As a result, in addition to our initial shareholders’ founder shares, we would need 16,062,501, or 36.51%, of the 44,000,000 public shares to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all outstanding shares are voted). Each public shareholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction.
If we conduct redemptions pursuant to the tender offer rules of the SEC, we will, pursuant to our amended and restated memorandum and articles of association:
Upon the public announcement of our initial business combination, we or our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase Class A ordinary shares in the open market if we elect to redeem our public shares through a tender offer, to comply with Rule 14e-5 under the Exchange Act.
In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public shareholders not tendering more than the number of public shares we are permitted to redeem. If public shareholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete the initial business combination.
Limitation on Redemption upon Completion of Our Initial Business Combination If We Seek Shareholder Approval
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to Excess Shares (as defined further below). We believe this restriction will discourage shareholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed business combination as a means to force us or our management to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public shareholder holding more than an aggregate of 15% of the shares sold in our initial public offering could threaten to exercise its redemption rights if such holder’s shares are not purchased by us, our sponsor or our management at a premium to the then-current market price or on other undesirable terms. By limiting our shareholders’ ability to redeem norepresented more than 15% of our Cost of Goods Sold in fiscal year 2023. In addition to raw ingredients and packaging, we source energy and liquid fuels for our manufacturing facilities and in-house distribution assets.
However,human capital management, including recruiting, training, and leadership developme
Tendering Share Certificatestransformation initiatives, particularly our DSD shift from RSPs to IOs and the associated restructuring of our sales management and corporate organization structure (see “— Supply Chain — Distribution” and "Item 7
In connectionpositive difference for our associates, customers and in the communities in which we operate. By collaborating with any vote heldstakeholders, including associates, consumers, business partners, suppliers, stockholders and customers, we are taking the necessary steps to approvebecome a proposed business combination, public shareholders seekingmore sustainable company. We believe that it is in our stakeholders’ best interests that we place safety-focused, sustainability-minded, and transparent best practices at the heart of our operations. With this stakeholder framework, in 2020 we formed our ESG Committee, composed of subject matter experts from across our operations, including facilities management, packaging innovation, human resources, corporate governance, legal affairs and communications.
There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically charge the tendering broker a fee of approximately $80.00 and it would be up to the broker whether or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights to tender their shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated.
In addition, if we conduct redemptions in connection with a shareholder vote, a public shareholder seeking redemption of its public shares must also submit a written request for redemption to our transfer agent at least two business days prior to the vote in which the name of the beneficial owner of such shares is included.
Any request to redeem such shares, once made, may be withdrawn at any time up to two business days prior to the initially scheduled vote on the proposal to approve the business combination, unless otherwise agreed to by us. Furthermore, if a holder of a public share delivered its certificate in connection with an election of redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically or electronically). It is anticipated that the funds to be distributed to holderslicense certain of our public shares electing to redeem their shares will be distributed promptly afterowned brands, including Utz, for use by third parties in certain food categories (such as frozen foods), however these arrangements do not materially impact our financial position. Finally, we have historically engaged in certain cross-marketing and/or promotional activities with third parties, thereby increasing the completionvisibility of our initial business combination.
Ifbrands.
If our initial proposed business combination is not completed, we may continue to try to complete a business combination with a different target until 24 months from the closing ofexperience, seasonal fluctuations in our initial public offering.
Redemption of Public Shares and Liquidation If No Initial Business Combination
Our amended and restated memorandum and articles of association provide that we will have only 24 months from the closing of our initial public offering to complete our initial business combination. If we are unable to complete our initial business combination within such 24-month period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than five business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution expenses and net of taxes paid or payable), divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any) and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii) to our obligations under Cayman Islands law to provide for claims of creditors and in all cases subject to the other requirements of applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination within the 24-month time period.
Our initial shareholders entered into agreements with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination within 24 months from the closing of our initial public offering. However, if our initial shareholders or management team acquire public shares in or after our initial public offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the allotted 24-month time period.
Our sponsor, executive officers and directors agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles of association to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of our initial public offering, unless we provide our public shareholders with the opportunity to redeem their public shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of taxes paid or payable), divided by the number of then outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SEC’s “penny stock” rules). If this optional redemption right is exercised with respect to an excessive number of public shares such that we cannot satisfy the net tangible asset requirement, we would not proceed with the amendment or the related redemption of our public shares at such time.
We expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts held outside the trust accountplus up to $100,000 of funds from the trust account available to us to pay dissolution expenses, although we cannot assure you that there will be sufficient funds for such purpose. We will depend on sufficient interest being earned on the proceeds held in the trust account to provide us with additional cash to pay any tax obligations that we may owe.
If we were to expend all of the net proceeds of our initial public offering, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the per-share redemption amount received by shareholders upon our dissolution would be $10.00. The proceeds deposited in the trust account could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public shareholders. We cannot assure you that the actual per-share redemption amount received by shareholders will not be less than $10.00. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims.
Although we will seek to have vendors, service providers, prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will consider whether competitive alternatives are reasonably available to the company, and will only enter into an agreement with such third party if management believes that such third party’s engagement would be in the best interests of the company under the circumstances. Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. The underwriters of our initial public offering will not execute an agreement with us waiving such claims to the monies held in the trust account. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the futureretail sales as a result of or arising outconsumer and customer spending patterns. Historically, the months of any negotiations, contracts or agreements with usApril to September, as well as December have resulted in higher retail sales than average due to increased consumer demand during the spring and will not seek recourse against the trust account for any reason. In order to protect the amounts heldsummer months and holiday season, as well as significant retailer merchandising and promotions around those times. Additionally, we have historically generated seasonal cash flow from decreases in working capital levels in the trust account, our sponsor agreed that it will be liable to us iffourth quarter and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of fundsinvested cash flow in working capital increases in the trust accountfirst quarter. We expect these historical trends to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share heldcontinue in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share duefuture.
In the event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per public shareregulations relating to environmental protection and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per share due to reductions in the value of the trust assets, in each case less taxes payable,worker health and safety matters. We monitor these regulatory requirements and our sponsor asserts that itcompliance on a regular basis.
We will seek to reduce the possibility that our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to have vendors, service providers, prospective target businessesaccessed from or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account. Our sponsor will also not be liable as to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. In the event that we liquidate and it is subsequently determined that our funds available for claims and liabilities are insufficient, shareholders who received funds from our trust account could be liable for claims made by creditors.
If we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to return $10.00 per sharehyperlinked to, our public shareholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us thatwebsite is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our shareholders. Furthermore, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public shareholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.
Our public shareholders will be entitled to receive funds from the trust account only (i) in the event of the redemption of our public shares if we do not complete our initial business combination within 24 months from the closing of our initial public offering, (ii) in connection with a shareholder vote to amend our amended and restated memorandum and articles of association to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of our initial public offering or (iii) if they redeem their respective shares for cash upon the completion of the initial business combination. In no other circumstances will a shareholder have any right or interest of any kind to or in the trust account. In the event we seek shareholder approval in connection with our initial business combination, a shareholder’s voting in connection with the business combination alone will not result in a shareholder’s redeeming its shares to us for an applicable pro rata share of the trust account. Such shareholder must have also exercised its redemption rights described above. These provisions of our amended and restated memorandum and articles of association, like all provisions of our amended and restated memorandum and articles of association, may be amended with a shareholder vote.
Competition
In identifying, evaluating and selecting a target business for our initial business combination, we may encounter intense competition from other entities having a business objective similar to ours, including other special purpose acquisition companies, private equity groups and leveraged buyout funds, public companies and operating businesses seeking strategic acquisitions. Many of these entities are well established and have extensive experience identifying and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other resources than us. Our ability to acquire larger target businesses will be limited by our available financial resources. This inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore, our obligation to pay cash in connection with our public shareholders who exercise their redemption rights may reduce the resources available to us for our initial business combination and our outstanding warrants, and the future dilution they potentially represent, or the possible need for us to conduct a shareholder vote to approve the transaction, may not be viewed favorably by certain target businesses. Any of these factors may place us at a competitive disadvantage in successfully negotiating an initial business combination.
Facilities
We currently maintain our executive offices at 200 Park Avenue, 58th Floor, New York, New York 10166. The cost for our usepart of this space is included in the $10,000 per month fee we pay to an affiliate of our sponsor for office space, administrative and support services.Annual Report on Form 10-K. We consider our current office space adequate for our current operations.
Employees
We currently have three executive officers: Roger K. Deromedi, Jason K. Giordano and Chinh E. Chu. These individuals are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time they will devote in any time period will vary based on whether a target business has been selected for our initial business combination and the stage of the business combination process we are in. We do not intend to have any full time employees prior to the completion of our initial business combination.
Periodic Reporting and Financial Information
Our units, Class A ordinary shares and warrants are registered under the Exchange Act and we have reporting obligations, including the requirement that we file or furnish annual, quarterly and current reports, with the SEC. In accordance with the requirements of the Exchange Act, our annual reports contain financial statements audited and reported on by our independent registered public accountants.
We will provide shareholders with audited financial statements of the prospective target business as part of the proxy solicitation or tender offer materials, as applicable, sent to shareholders. These financial statements may be required to be prepared in accordance with, or reconciled to, GAAP, or IFRS, depending on the circumstances, and the historical financial statements may be required to be audited in accordance with the standards of the PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame. We cannot assure you that any particular target business identified by us as a potential business combination candidate will have financial statements prepared in accordance with the requirements outlined above, or that the potential target business will be able to prepare its financial statements in accordance with the requirements outlined above. To the extent that these requirements cannot be met, we may not be able to acquire the proposed target business. While this may limit the pool of potential business combination candidates, we do not believe that this limitation will be material.
We will be required to evaluate our internal control procedures for the fiscal year ending December 31, 2019 as required by the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act. Only in the event we are deemed to be a large accelerated filer or an accelerated filer will we be required to have our internal control procedures audited. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
We previously filed a registration statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we are subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.
We are a Cayman Islands exempted company. Exempted companies are Cayman Islands companies conducting business mainly outside the Cayman Islands and, as such, are exempted from complying with certain provisions of the Companies Law. As an exempted company, we applied for and received, a tax exemption undertaking from the Cayman Islands government that, in accordance with Section 6 of the Tax Concessions Law (2018 Revision) of the Cayman Islands, for a period of 20 years from the date of the undertaking, no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations will apply to us or our operations and, in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax will be payable (i) on or in respect of our shares, debentures or other obligations or (ii) by way of the withholding in whole or in part of a payment of dividend or other distribution of income or capital by us to our shareholders or a payment of principal or interest or other sums due under a debenture or other obligation of us.
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptionsother information with the United States Securities and Exchange Commission (“SEC”). You may obtain a copy of any of these reports, free of charge, from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the pricesInvestors Relations section of our securities may be more volatile.
website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. The SEC maintains an Internet site that also contains these reports at: www.sec.gov. In addition, Section 107copies of the JOBS Act also provides that an “emerging growth company” can take advantageCompany's annual report will be made available, free of charge, on written request to the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our initial public offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A ordinary shares that are held by non-affiliates exceeds $700 million as of the prior June 30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
Legal Proceedings
There is no material litigation, arbitration or governmental proceeding currently pending against us or any members of our management team in their capacity as such.
An investment in our securities involves a high degree of risk.
investment in us.
We were formedis subject to quarterly fluctuations due to the timing of, and demand for, consumer-driven promotional activities, which may have a disproportionate effect on April 30, 2018our results of operations. Historically, we have offered a variety of sales and promotion incentives to our customers, IOs, and third-party distributors and consumers, such as price discounts, consumer coupons, volume rebates, cooperative marketing programs, slotting fees and in-store displays. In addition, our sales and promotion incentives are typically offered in connection with seasonal social events, holidays and sporting events. Our net sales are periodically influenced by the introduction and discontinuance of sales and promotion incentives. Reductions in overall sales and promotion incentives could impact our net sales and affect our results of operations in any particular fiscal quarter.
Past performanceresults.
Information regardingdo so in a timely manner. If we are unable to fully offset such cost increases, our foundersfinancial results could be materially adversely affected.
Our shareholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may complete our initial business combination even though a majority of our shareholders do not support such a combination.
We may choose not to hold a shareholder vote before we complete our initial business combination if the business combination would not require shareholder approval under applicable law or stock exchange listing requirement. For instance, if we were seeking to acquire a target business where the consideration we were paying in the transaction was all cash, we would not be required to seek shareholder approval to complete such a transaction. Except for as required by applicable law or stock exchange requirement, the decision as to whether we will seek shareholder approval of a proposed business combination or will allow shareholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be basedindefinite-lived intangibles. These values depend on a variety of factors, including the success of our business, market conditions, earnings growth and expected cash flows. Impairments to goodwill and other intangible assets may be caused by factors outside our control, such as increasing competitive pricing pressures, changes in discount rates based on changes in cost of capital or lower than expected sales and profit growth rates. In addition, if we see the timingneed to consolidate certain brands, we could experience impairment of our trademark intangible assets. There were no adjustments for impairments recorded in fiscal years 2023, 2022 or 2021, apart from an impairment related to our termination of a master distribution right of approximately $2.0 million in fiscal 2022. Significant and unanticipated changes in our business could require additional non-cash charges for impairment in a future period which may significantly affect our financial results in the period of such charge.
Your only opportunity to affect the investment decision regarding a potential business combinationmake such distributions may be subject to various limitations and restrictions including, but not limited to, retention of amounts necessary to satisfy the exerciseobligations of your rightUBH and its subsidiaries and restrictions on distributions that would violate any applicable restrictions contained in UBH’s debt agreements, or any applicable law, or that would have the effect of rendering UBH insolvent. To the extent that we are unable to redeem your shares from usmake payments under the TRA for cash.
Atany reason, such payments will be deferred and will accrue interest until paid; provided, however, that nonpayment for a specified period may constitute a material breach of a material obligation under the time of your investment in us, youTRA and therefore accelerate payments under the TRA, which could be substantial.
If we seek shareholder approval of our initial business combination, our initial shareholders and management team agreed to vote in favor of such initial business combination, regardless of how our public shareholders vote.
Our initial shareholders own, on an as-converted basis, 21.25% of our outstanding ordinary shares. Our initial shareholders and management team also mayits sole discretion, will make any determination from time to time purchasewith respect to the use of any such excess cash so accumulated, which may include, among other uses, to pay dividends on our Class A ordinary shares priorCommon Stock. We will have no obligation to distribute such cash (or other available cash other than any declared dividend) to our initial business combination. Our amendedstockholders.
Ifany reason, the saleunpaid amounts will be deferred and will accrue interest until paid; however, nonpayment for a specified period may constitute a material breach of a material obligation under the TRA and therefore accelerate payments due under the TRA, as further described below. Furthermore, our future obligation to make payments under the TRA could make it a less attractive target for an acquisition, particularly in the case of an acquirer that cannot use some or all of the forward purchase securities fails to close,tax benefits that may be deemed realized under the TRA.
We entered into forward purchase agreements with our sponsor and our independent directors which provide forrealize or be accelerated.
The ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target.
We may seek to enter into a business combination transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. If too many public shareholders exercise their redemption rights, we would not be able to meet such closing conditionTRA and, as a result, wouldthere might not be ablefuture cash payments against which to proceed withnet. As a result, in certain circumstances we could make payments under the business combination. Furthermore,TRA in noexcess of our actual income or franchise tax savings, which could materially impair our financial condition.
The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure.
At the time we enter into an agreement for our initial business combination, we will not know how many shareholders may exercise their redemption rights, and therefore will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requiresforegoing clause (iii), which breach continues without cure for 30 days following receipt by us to have a minimum amount of cash at closing, we will need to reserve a portionwritten notice thereof and written notice of the cashacceleration is received by us thereafter (except that in the trust account to meet such requirements, or arrange for third party financing. In addition, ifcase that the TRA is rejected in a larger numbercase commenced under bankruptcy laws, no written notice of shares are submitted for redemption than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for third party financing. Raising additional third party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. In addition, the amount of the deferred underwriting commissions payable to the underwriters will not be adjusted for any shares that are redeemed in connection with an initial business combination. The per-share amount we will distribute to shareholders who properly exercise their redemption rights will not be reduced by the deferred underwriting commission and after such redemptions, the amount held in trust will continue to reflect our obligation to pay the entire deferred underwriting commissions. The above considerations may limit our ability to complete the most desirable business combination available to us or optimize our capital structure.
The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessfulacceleration is increased. If our initial business combination is unsuccessful, you would not receive your pro rata portion of the trust account until we liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your shares in the open market; however, at such time our shares may trade at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your shares in the open market.
The requirement that we complete our initial business combination within 24 months after the closing of our initial public offering may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our shareholders.
Any potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination within 24 months from the closing of our initial public offering. Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not complete our initial business combination with that particular target business, we may be unable to complete our initial business combination with any target business. This risk will increase as we get closer to the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.
We may not be able to complete our initial business combination within 24 months after the closing of our initial public offering, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate.
We may not be able to find a suitable target business and complete our initial business combination within 24 months after the closing of our initial public offering. Our ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein. If we have not completed our initial business combination within such time period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than five business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution expenses and net of taxes paid or payable)required), divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any) and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii)(iii) and (iii)(iv), tounless certain liquidity exceptions apply, our obligations under Cayman Islands law to provide for claims of creditors and in all cases subject to the other requirements of applicable law.
If we seek shareholder approval of our initial business combination, our sponsor, initial shareholders, directors, executive officers, advisors and their affiliates may elect to purchase shares or public warrants from public shareholders, which may influence a vote on a proposed business combination and reduce the public “float” of our Class A ordinary shares.
If we seek shareholder approval of our initial business combinationTRA will accelerate and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, initial shareholders, directors, executive officers, advisors or their affiliates may purchase shares or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination, although they are under no obligation to do so. However, other than as expressly stated herein, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase shares or public warrants in such transactions.
In the event that our sponsor, initial shareholders, directors, executive officers, advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior electionsmake a lump-sum cash payment to redeem their shares.the Continuing Members and/or other applicable parties to the TRA equal to the present value of all forecasted future payments that would have otherwise been made under the TRA, which lump-sum payment would be based on certain assumptions, including those relating to our future taxable income. The purpose of any such purchases of shareslump-sum payment could be to vote such shares in favor ofsubstantial and could exceed the business combination and thereby increase the likelihood of obtaining shareholder approval of the business combination or to satisfy a closing condition in an agreement with a targetactual tax benefits that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrantholders for approval in connection with our initial business combination. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subjectwe realize subsequent to such reporting requirements. See “Item 1. Business — Permitted purchases of our securities” for a description of how our sponsor, initial shareholders, directors, executive officers, advisors or any of their affiliates will select which shareholderspayment because such payment would be calculated assuming, among other things, that we would have certain tax benefits available to purchase securities fromus and that we would be able to use the potential tax benefits in any private transaction.
In addition, if such purchases are made, the public “float” of our Class A ordinary shares or public warrants and the number of beneficial holders of our securitiesfuture years.
If a shareholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
We will comply with the proxy rules or tender offer rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance with these rules, if a shareholder fails to receive our proxy solicitation or tender offer materials, as applicable, such shareholder may not become aware of the opportunity to redeem its shares. In addition, the proxy solicitation or tender offer materials, as applicable,franchise tax savings that we will furnishrealize. Furthermore, our obligations to holdersmake payments under the TRA could also have the effect of our public shares in connection with our initialdelaying, deferring or preventing certain mergers, asset sales, other forms of business combination will describe the various procedures that must be complied with in order to validly redeemcombinations or tender public shares. In the event that a shareholder fails to comply with these procedures, its shares may not be redeemed.
You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
Our public shareholders are entitled to receive funds from the trust account only upon the earlier to occur of: (i) our completionother changes of an initial business combination, and then only in connection with those Class A ordinary shares that such shareholder properly elected to redeem, subject to the limitations described herein, (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of our initial public offering and (iii) the redemption of our public shares if we are unable to complete an initial business combination within 24 months from the closing of our initial public offering, subject to applicable law and as further described herein. In no other circumstances will a public shareholder have any right or interest of any kind in the trust account. Holders of warrants will not have any right to the proceeds held in the trust account with respect to the warrants. Accordingly, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
control.
Additionally, our units will not be traded after completion of our initial business combination, and, in connection with our initial business combination, we will be required to demonstrate compliance with NYSE initial listing requirements, which are more rigorous than NYSE continued listing requirements, in order to continue to maintain the listing of our securities on NYSE.
For instance, our share price would generally be required to be at least $4.00 per share and our market capitalization would generally be required to be at least $150,000,000. We cannot assure you that we will be able to meet those initial listing requirements at that time.
requirements.
You will not be entitled to protections normally afforded to investors of many other blank check companies.
Since
If we seek shareholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of shareholders are deemed to hold in excess of 15%trading volume of our Class A ordinary shares, you will loseCommon Stock.
If we seek shareholderCommon Stock. These provisions could also make it difficult for stockholders to take certain actions, including electing directors who are not nominated by the current members of the Company Board or taking other corporate actions, including effecting changes in management. Among other things, the Certificate of Incorporation and Bylaws include provisions regarding:
Becausevariety of situations, has been increasing recently. Volatility in the stock price of our limited resourcesClass A Common Stock or other reasons may in the future cause it to become the target of securities litigation or shareholder activism. Securities litigation and shareholder activism, including potential proxy contests, could result in substantial costs and divert management’s and the significant competition for business combination opportunities,Company Board's attention and resources from our business. Additionally, such securities litigation and shareholder activism could give rise to perceived uncertainties as to our future, adversely affect our relationships with service providers and make it may be more difficult for us to complete our initial business combination. If we are unable to complete our initial business combination, our public shareholders may receive only their pro rata portion of the funds in the trust account that are available for distribution to public shareholders,attract and our warrants will expire worthless.
We expect to encounter intense competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other special purpose acquisition companies and other entities, domestic and international, competing for the types of businesses we intend to acquire. Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire with the net proceeds of our initial public offering and the sale of the private placement warrants, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, we are obligated to offer holders of our public shares the right to redeem their shares for cash at the time of our initial business combination in conjunction with a shareholder vote or via a tender offer. Target companies will be aware that this may reduce the resources available to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating a business combination. If we are unable to complete our initial business combination, our public shareholders may receive only their pro rata portion of the funds in the trust account that are available for distribution to public shareholders, and our warrants will expire worthless.
If the net proceeds of our initial public offering not being held in the trust account are insufficient to allow us to operate for at least the next 24 months, it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination, and we will depend on loans from our sponsor or management team to fund our search and to complete our initial business combination.
As of December 31, 2018, we had $944,890 in cash held outside the trust account to fund our working capital requirements. We believe that, upon closing of our initial public offering, the funds available to us outside of the trust account will be sufficient to allow us to operate for at least the next 24 months; however, we cannot assure you that our estimate is accurate. Of the funds available to us, we could use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into a letter of intent where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business.
If we are required to seek additional capital, we would need to borrow funds from our sponsor, management team or other third parties to operate or may be forced to liquidate. Neither our sponsor, members of our management team nor any of their affiliates is under any obligation to advance funds to us in such circumstances. Any such advances would be repaid only from funds held outside the trust account or from funds released to us upon completion of our initial business combination. Up to $1,500,000 of such loans may be convertible into warrants of the post-business combination entity at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account. If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. Consequently, our public shareholders may only receive an estimated $10.00 per share, or possibly less, on our redemption of our public shares, and our warrants will expire worthless.
Subsequent to our completion of our initial business combination,retain qualified personnel. Also, we may be required to take write-downs or write-offs, restructuringincur significant legal fees and impairment or other charges or file for bankruptcy protection, whichexpenses related to any securities litigation and activist shareholder matters. Further, our stock price could have a significant negative effect on our financial condition, results of operations and our share price, which could cause you to lose some or all of your investment.
Even if we conduct due diligence on a target business with which we combine, we cannot assure you that this diligence will surface all material issues with a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges or file for bankruptcy protection, which could result in our reporting losses. For example, following an investment by one of our founders in Constellation Healthcare Technologies Inc. (“CHT”), CHT filed for bankruptcy protection. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt heldto significant fluctuation or otherwise be adversely affected by a target business or by virtue of our obtaining post-combination debt financing. Accordingly, any shareholders who choose to remain shareholders following the business combination could suffer a reduction in the value of their securities. Such shareholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy solicitation or tender offer materials, as applicable, relating to the business combination contained an actionable material misstatement or material omission.
If third parties bring claims against us, the proceeds held in the trust account could be reducedevents, risks and the per-share redemption amount received by shareholders may be less than $10.00 per share.
Our placing of funds in the trust account may not protect those funds from third party claims against us. Although we will seek to have vendors, service providers, prospective target businesses and other entities with which we do business execute agreements with us (except our independent registered public accounting firm) waiving any right, title, interest or claimuncertainties of any kind in or to any monies held in the trust account for the benefit of our public shareholders, such parties may not execute such agreements, or even if they execute such agreements, they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will consider whether competitive alternatives are reasonably available to the company,securities litigation and will only enter into an agreement with such third party if management believes that such third party’s engagement would be in the best interests of the company under the circumstances. The underwriters of our initial public offering will not execute an agreement with us waiving such claims to the monies held in the trust account.
Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we are unable to complete our initial business combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per-share redemption amount received by public shareholders could be less than the $10.00 per public share initially held in the trust account, due to claims of such creditors. Pursuant to a letter agreement, our sponsor agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and we believe that our sponsor’s only assets are securities of our company. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
Our directors may decide not to enforce the indemnification obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to our public shareholders.
In the event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per share and (ii) the actual amount per share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per share due to reductions in the value of the trust assets, in each case less taxes payable, and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to our public shareholders may be reduced below $10.00 per share.
Accordingly, any indemnification provided will be able to be satisfied by us only if (i) we have sufficient funds outside of the trust account or (ii) we consummate an initial business combination. Our obligation to indemnify our officers and directors may discourage shareholdersstockholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful, might otherwise benefit us and our shareholders.stockholders. Furthermore, a shareholder’sstockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.
If, after we distribute the proceeds in the trust account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members
If, after we distribute the proceeds in the trust account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our shareholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying public shareholders from the trust account prior to addressing the claims of creditors.
If, before distributing the proceeds in the trust account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders and the per-share amount that would otherwise be received by our shareholdersoutstanding Private Placement Warrants issued in connection with our liquidation may be reduced.
If, before distributing the proceeds in the trust account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be includedIPO of CCH. Significant changes in our bankruptcy estate and subject to the claimsstock price or number of third parties with priority over the claims of our shareholders. To the extent any bankruptcy claims deplete the trust account, the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination.
If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:
each of which may make it difficult for us to complete our initial business combination. In addition, we may have imposed upon us burdensome requirements, including:
In order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other than investing, reinvesting or trading of securities and that our activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business will be to identify and complete a business combination and thereafter to operate the post-transaction business or assets for the long term. We do not plan to buy businesses or assets with a view to resale or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.
We do not believe that our principal activities will subject us to the Investment Company Act. To this end, the proceeds held in the trust account may only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting the investment of the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to avoid being deemed an “investment company” within the meaning of the Investment Company Act. An investment in our securities is not intended for persons who are seeking a return on investments in government securities or investment securities. The trust account is intended as a holding place for funds pending the earliest to occur of either: (i) the completion of our initial business combination; (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of our initial public offering; or (iii) absent an initial business combination within 24 months from the closing of our initial public offering, our return of the funds held in the trust account to our public shareholders as part of our redemption of the public shares. If we do not invest the proceeds as discussed above, we may be deemed to be subject to the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to complete a business combination. If we are unable to complete our initial business combination, our public shareholders may only receive their pro rata portion of the funds in the trust account that are available for distribution to public shareholders, and our warrants will expire worthless.
Changes in laws or regulations, or a failure to comply with any laws and regulations,Private Placement Warrants outstanding may adversely affect our business, includingnet income (loss) in our ability to negotiateconsolidated statements of operations and complete our initial business combination, and results of operations.
We are subject to laws and regulations enacted by national, regional and local governments. In particular, we are required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our initial business combination, and results of operations.
If we are unable to consummate our initial business combination within 24 months from the closing of our initial public offering, our public shareholders may be forced to wait beyond such to 24 months before redemption from our trust account.
If we are unable to consummate our initial business combination within 24 months from the closing of our initial public offering, the proceeds then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution expenses and net of taxes paid or payable), will be used to fund the redemption of our public shares, as further described herein. Any redemption of public shareholders from the trust account will be effected automatically by function of our amended and restated memorandum and articles of association prior to any voluntary winding up. If we are required to wind-up, liquidate the trust account and distribute such amount therein, pro rata, to our public shareholders, as part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the Companies Law. In that case, investors may be forced to wait beyond 24 months from the closing of our initial public offering before the redemption proceeds of our trust account become available to them, and they receive the return of their pro rata portion of the proceeds from our trust account. We have no obligation to return funds to investors prior to the date of our redemption or liquidation unless we consummate our initial business combination prior thereto and only then in cases where investors have sought to redeem their Class A ordinary shares. Only upon our redemption or any liquidation will public shareholders be entitled to distributions if we are unable to complete our initial business combination.
comprehensive income (loss).
If we are forced to enter into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course of business. As a result, a liquidator could seek to recover some or all amounts received by our shareholders. Furthermore, our directors may be viewed as having breached their fiduciary duties to us or our creditors and/or may have acted in bad faith, thereby exposing themselves and our company to claims, by paying public shareholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons. We and our directors and officers who knowingly and willfully authorized or permitted any distribution to be paid out of our share premium account while we were unable to pay our debts as they fall due in the ordinary course of business would be guilty of an offence and may be liable to a fine of $18,292.68 and to imprisonment for five years in the Cayman Islands.
We may not hold an annual meeting of shareholders until after the consummation of our initial business combination. Our public shareholders will not have the right to elect directors until after the consummation of our initial business combination.
In accordance with NYSE corporate governance requirements, we are not required to hold an annual meeting until no later than one year after our first fiscal year end following our listing on the NYSE. There is no requirement under the Companies Law for us to hold annual or general meetings to elect directors. Until we hold an annual meeting of shareholders, public shareholders may not be afforded the opportunity to elect directors and to discuss company affairs with management. Our board of directors is divided into three classes with only one class of directors being elected in each year and each class (except for those directors appointed prior to our first annual meeting of shareholders) serving a three-year term. In addition, as holders of our Class A ordinary shares, our public shareholders will not have the right to vote on the election of directors until after the consummation of our initial business combination.
You will not be permitted to exercise your warrants unless we register and qualify the underlying Class A ordinary shares or certain exemptions are available.
If the issuance of the Class A ordinary shares upon exercise of the warrants is not registered, qualified or exempt from registration or qualification under the Securities Act and applicable state securities laws, holders of warrants will not be entitled to exercise such warrants and such warrants may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price solely for the Class A ordinary shares included in the units.
We are not registering the Class A ordinary shares issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time. However, under the terms of the warrant agreement, we agreed that, as soon as practicable, but in no event later than 15 business days, after the closing of our initial business combination, we will use our best efforts to file with the SEC a registration statement covering the registration under the Securities Act of the Class A ordinary shares issuable upon exercise of the warrants and thereafter will use our best efforts to cause the same to become effective within 60 business days following our initial business combination and to maintain a current prospectus relating to the Class A ordinary shares issuable upon exercise of the warrants until the expiration of the warrants in accordance with the provisions of the warrant agreement. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current or correct or the SEC issues a stop order.
If the Class A ordinary shares issuable upon exercise of the warrants are not registered under the Securities Act, under the terms of the warrant agreement, holders of warrants who seek to exercise their warrants will not be permitted to do so for cash and, instead, will be required to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act or another exemption.
In no event will warrants be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration or qualification is available.
If our Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of “covered securities” under Section 18(b)(1) of the Securities Act, we may, at our option, not permit holders of warrants who seek to exercise their warrants to do so for cash and, instead, require them to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act; in the event we so elect, we will not be required to file or maintain in effect a registration statement or register or qualify the shares underlying the warrants under applicable state securities laws, and in the event we do not so elect, we will use our best efforts to register or qualify the shares underlying the warrants under applicable state securities laws to the extent an exemption is not available.
In no event will we be required to net cash settle any warrant, or issue securities (other than upon a cashless exercise as described above) or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under the Securities Act or applicable state securities laws.
You may only be able to exercise your public warrants on a “cashless basis” under certain circumstances, and if you do so, you will receive fewer Class A ordinary shares from such exercise than if you were to exercise such warrants for cash.
The warrant agreement provides that in the following circumstances holders of warrants who seek to exercise their warrants will not be permitted to do for cash and will, instead, be required to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act: (i) if the Class A ordinary shares issuable upon exercise of the warrants are not registered under the Securities Act in accordance with the terms of the warrant agreement; (ii) if we have so elected and the Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of “covered securities” under Section 18(b)(1) of the Securities Act; and (iii) if we have so elected and we call the public warrants for redemption. If you exercise your public warrants on a cashless basis, you would pay the warrant exercise price by surrendering all of the warrants for that number of Class A ordinary shares equal to the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the excess of the “fair market value” of our Class A ordinary shares (as defined in the next sentence) over the exercise price of the warrants by (y) the fair market value. The “fair market value” is the average reported last sale price of the Class A ordinary shares for the 10 trading days ending on the third trading day prior to the date on which the notice of exercise is received by the warrant agent or on which the notice of redemption is sent to the holders of warrants, as applicable. As a result, you would receive fewer Class A ordinary shares from such exercise than if you were to exercise such warrants for cash.
The grant of registration rights to our initial shareholders and holders of our private placement warrants may make it more difficult to complete our initial business combination, and the future exercise of such rights may adversely affect the market price of our Class A ordinary shares.
Pursuant to offering registration rights agreement, our initial shareholders and their permitted transferees can demand that we register the Class A ordinary shares into which founder shares are convertible, holders of our private placement warrants and their permitted transferees can demand that we register the private placement warrants and the Class A ordinary shares issuable upon exercise of the private placement warrants and holders of warrants that may be issued upon conversion of working capital loans may demand that we register such warrants or the Class A ordinary shares issuable upon conversion of such warrants. The registration rights will be exercisable with respect to the founder shares and the private placement warrants and the Class A ordinary shares issuable upon exercise of such private placement warrants. Pursuant to the forward purchase agreements, we agreed that we will use our reasonable best efforts (i) to file within 30 days after the closing of the initial business combination a registration statement with the SEC for a secondary offering of the forward purchase shares and the forward purchase warrants (and underlying Class A ordinary shares), (ii) to cause such registration statement to be declared effective promptly thereafter and (iii) to maintain the effectiveness of such registration statement until the earliest of (A) the date on which the sponsor and all of the independent directors cease to hold the securities covered thereby, and (B) the date all of the securities covered thereby can be sold publicly without restriction or limitation under Rule 144 under the Securities Act. In addition, the forward purchase agreements provide these holders will have certain “piggy-back” registration rights to include their securities in other registration statements filed by us. We will bear the cost of registering these securities. The registration and availability of such a significant number of securities for trading in the public marketPrivate Placement Warrants may have an adverse effect on the market price of our Class A ordinary shares. In addition, the existence of the registration rights may make our initial business combination more costly or difficult to conclude. This is because the shareholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our Class A ordinary shares that is expected when the securities owned by our initial shareholders, holders of our private placement warrants or their respective permitted transferees are registered.
Because we are neither limited to evaluating a target businessWe issued in a particular industry sector nor have we selected any specific target businesses with which to pursue our initial business combination, you will be unable to ascertain the merits or risks of any particular target business’s operations.
We may pursue a business combination with an operating company in the consumer goods industry or related sectors but may also pursue business combination opportunities in other sectors, except that we will not, under our amended and restated memorandum and articles of association, be permitted to effectuate our initial business combination with another blank check company or similar company with nominal operations. Because we have not yet selected any specific target business with respect to a business combination, there is no basis to evaluate the possible merits or risks of any particular target business’s operations, results of operations, cash flows, liquidity, financial condition or prospects. To the extent we complete our initial business combination, we may be affected by numerous risks inherent in the business operations with which we combine. For example, if we combine with a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development stage entity. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business. We also cannot assure you that an investment in our securities will ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available, in a business combination target. Accordingly, any shareholders who choose to remain shareholders following our initial business combination could suffer a reduction in the value of their securities. Such shareholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy solicitation or tender offer materials, as applicable, relating to the business combination contained an actionable material misstatement or material omission.
Because we intend to focus our search for business combination targets in the consumer goods industry and related sectors, we expect our future operations to be subject to risks associated with that industry or sectors.
We intend to focus our search for a target business or businesses in the consumer goods industry and related sectors. Because we have not yet announced an initial business combination, we cannot provide specific risks of any business combination. However, risks inherent in investments in the consumer goods industry and related sectors may include, but are not limited to, the following:
We may seek business combination opportunities in industries outside of the consumer goods industry and related sectors (which may or may not be outside of our management’s areas of expertise).
Although we intend to focus on identifying business combination candidates in the consumer goods industry and related sectors, we will consider a business combination outside of the consumer goods industry and related sectors if a business combination candidate is presented to us and we determine that such candidate offers an attractive acquisition opportunity for our company or we are unable to identify a suitable candidate in the consumer goods industry and related sectors after having expended a reasonable amount of time and effort in an attempt to do so. Although our management will endeavor to evaluate the risks inherent in any particular business combination candidate, we cannot assure you that we will adequately ascertain or assess all of the significant risk factors. We also cannot assure you that an investment in our securities will not ultimately prove to be less favorable to investors in our initial public offering than a direct investment, if an opportunity were available, in a business combination candidate. In the event we elect to pursue an initial business combination outside of the consumer goods industry and related sectors, our management’s expertise may not be directly applicable to its evaluation or operation, and the information contained herein regarding the consumer goods industry and related sectors would not be relevant to an understanding of the initial business combination we elect to consummate.
Although we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial business combination may not have attributes entirely consistent with our general criteria and guidelines.
Although we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business combination will not meet some or all of these criteria. If we complete our initial business combination with a target that does not meet some or all of these guidelines, such combination may not be as successful as a combination with a business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business combination with a target that does not meet our general criteria and guidelines, a greater number of shareholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if shareholder approval of the transaction is required by law, or we decide to obtain shareholder approval for business or other legal reasons, it may be more difficult for us to attain shareholder approval of our initial business combination if the target business does not meet our general criteria and guidelines. If we are unable to complete our initial business combination, our public shareholders may only receive their pro rata portion of the funds in the trust account that are available for distribution to public shareholders, and our warrants will expire worthless.
We are not required to obtain an opinion from an independent accounting or investment banking firm, and consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our shareholders from a financial point of view.
Unless we complete our initial business combination with an affiliated entity, we are not required to obtain an opinion from an independent accounting firm or independent investment banking firm which is a member of FINRA that the price we are paying is fair to our shareholders from a financial point of view. If no opinion is obtained, our shareholders will be relying on the judgment of our board of directors, who will determine fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed in our proxy solicitation or tender offer materials, as applicable, related to our initial business combination.
We may issue additional Class A ordinary shares or preferred shares to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. We may also issue Class A ordinary shares upon the conversion of the founder shares at a ratio greater than one-to-one concurrently with or immediately following the consummation of our initial business combination as a result of the anti-dilution provisions contained therein. Any such issuances would dilute the interest of our shareholders and likely present other risks.
Our amended and restated memorandum and articles of association authorize the issuance of up to 400,000,000 Class A ordinary shares, par value $0.0001 per share, 50,000,000 Class B ordinary shares, par value $0.0001 per share, and 1,000,000 preferred shares, $0.0001 per share. There are 356,000,000 and 38,125,000 authorized but unissued Class A ordinary shares and Class B ordinary shares, respectively, available for issuance which amount does not take into account shares reserved for issuance upon exercise of outstanding warrants and the forward purchase warrants, shares issuable upon conversion of the Class B ordinary shares or the forward purchase shares. The Class B ordinary shares are automatically convertible into Class A ordinary shares concurrently with or immediately following the consummation of our initial business combination, or earlier at the option of the holder thereof, as described herein. There are no preferred shares issued and outstanding.
We may issue a substantial number of additional Class A ordinary shares or preferred shares to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. We may also issue Class A ordinary shares to redeem the warrants or upon conversion of the Class B ordinary shares at a ratio greater than one-to-one concurrently with or immediately following the consummation of our initial business combination as a result of the anti-dilution provisions as set forth herein. However, our amended and restated memorandum and articles of association provide, among other things, that prior to our initial business combination, we may not issue additional shares that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote as a class with our public shares (a) on any initial business combination or (b) to approve an amendment to our amended and restated memorandum and articles of association to extend the time we have to consummate a business combination beyond 24 months from the closing of our initial public offering. These provisions of our amended and restated memorandum and articles of association, like all provisions of our amended and restated memorandum and articles of association, may be amended with a shareholder vote. The issuance of additional ordinary or preferred shares:
Unlike some other similarly structured special purpose acquisition companies, our initial shareholders will receive additional Class A ordinary shares if we issue shares to consummate an initial business combination.
The founder shares will automatically convert into Class A ordinary shares concurrently with or immediately following the consummation of our initial business combination, or earlier at the option of the holder thereof, on a one-for-one basis. However, if additional Class A ordinary shares or any other equity-linked securities are issued or deemed issued in connection with our initial business combination, the number of Class A ordinary shares issuable upon conversion of all founder shares will equal, in the aggregate, 20% of the total number of Class A ordinary shares outstanding after such conversion (after giving effect to any redemptions of Class A ordinary shares by public shareholders), including the total number of Class A ordinary shares issued or deemed issued, or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial business combination (including the forward purchase shares, but not the forward purchase warrants), excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, or to be issued, to any seller in the initial business combination and any private placement warrants issued to our sponsor upon conversion of working capital loans, provided that such conversion of founder shares will never occur on a less than one-for-one basis. This is different than some other similarly structured special purpose acquisition companies in which the initial shareholders will only be issued an aggregate of 20% of the total number of shares to be outstanding prior to the initial business combination.
Resources could be wasted in researching acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public shareholders may only receive their pro rata portion of the funds in the trust account that are available for distribution to public shareholders, and our warrants will expire worthless.
We anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If we decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial business combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public shareholders may only receive their pro rata portion of the funds in the trust account that are available for distribution to public shareholders, and our warrants will expire worthless.
We may be a passive foreign investment company, or “PFIC,” which could result in adverse United States federal income tax consequences to U.S. investors.
If we are a PFIC for any taxable year (or portion thereof) that is included in the holding period of a beneficial owner of our units, Class A ordinary shares or warrants who or that is (i) an individual who is a citizen or resident of the United States as determined for U.S. federal income tax purposes, (ii) a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized in or under the laws of the United States, any state thereof or the District of Columbia, (iii) an estate whose income is subject to U.S. federal income tax regardless of its source, or (iv) a trust, if (a) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons (as defined in the Internal Revenue Code) have authority to control all substantial decisions of the trust or (b) it has a valid election in effect under Treasury Regulations to be treated as a U.S. person (a “U.S. Holder”), such U.S. Holder may be subject to certain adverse U.S. federal income tax consequences and may be subject to additional reporting requirements. Our PFIC status for our current and subsequent taxable years may depend on whether we qualify for the PFIC start-up exception. Depending on the particular circumstances the application of the start-up exception may be subject to uncertainty, and there cannot be any assurance that we will qualify for the start-up exception. Accordingly, there can be no assurances with respect to our status as a PFIC for our current taxable year or any subsequent taxable year (and, in the case of the startup exception, potentially not until after the two taxable years following our current taxable year). Our PFIC status for any taxable year will not be determinable until after the end of such taxable year. If we determine we are a PFIC for any taxable year, we will endeavor to provide to a U.S. Holder such information as the Internal Revenue Service may require, including a PFIC annual information statement, in order to enable the U.S. Holder to make and maintain a “qualified electing fund” election, but there can be no assurance that we will timely provide such required information, and such election would be unavailable with respect to our warrants in all cases. We urge U.S. investors to consult their own tax advisors regarding the possible application of the PFIC rules.
We may reincorporate in another jurisdiction in connection with our initial business combination and such reincorporation may result in taxes imposed on shareholders.
We may, in connection with our initial business combination and subject to requisite shareholder approval under the Companies Law, reincorporate in the jurisdiction in which the target company or business is located or in another jurisdiction. The transaction may require a shareholder to recognize taxable income in the jurisdiction in which the shareholder is a tax resident or in which its members are resident if it is a tax transparent entity. We do not intend to make any cash distributions to shareholders to pay such taxes. Shareholders may be subject to withholding taxes or other taxes with respect to their ownership of us after the reincorporation.
After our initial business combination, it is possible that a majority of our directors and officers will live outside the United States and all of our assets will be located outside the United States; therefore investors may not be able to enforce federal securities laws or their other legal rights.
It is possible that after our initial business combination, a majority of our directors and officers will reside outside of the United States and all of our assets will be located outside of the United States. As a result, it may be difficult, or in some cases not possible, for investors in the United States to enforce their legal rights, to effect service of process upon all of our directors or officers or to enforce judgments of United States courts predicated upon civil liabilities and criminal penalties on our directors and officers under United States laws.
We are dependent upon our executive officers and directors and their loss could adversely affect our ability to operate.
Our operations are dependent upon a relatively small group of individuals and, in particular, our executive officers and directors. We believe that our success depends on the continued service of our officers and directors, at least until we have completed our initial business combination. In addition, our executive officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating their time among various business activities, including identifying potential business combinations and monitoring the related due diligence. We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or executive officers. The unexpected loss of the services of one or more of our directors or executive officers could have a detrimental effect on us.
Our ability to successfully effect our initial business combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some of whom may join us following our initial business combination. The loss of key personnel could negatively impact the operations and profitability of our post-combination business.
Our ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management, director or advisory positions following our initial business combination, it is likely that some or all of the management of the target business will remain in place. While we scrutinize closely any individuals we engage after our initial business combination, we cannot assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.
Our key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination, and a particular business combination may be conditioned on the retention or resignation of such key personnel. These agreements may provide for them to receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether a particular business combination is the most advantageous.
Our key personnel may be able to remain with our company after the completion of our initial business combination only if they are able to negotiate employment or consulting agreements in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render to us after the completion of the business combination. Such negotiations also could make such key personnel’s retention or resignation a condition to any such agreement. The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business, subject to their fiduciary duties under Cayman Islands law.
We may have a limited ability to assess the management of a prospective target business and, as a result, may effect our initial business combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company.
When evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess the target business’s management may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target business’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target business’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly, any shareholders who choose to remain shareholders following the business combination could suffer a reduction in the value of their shares. Such shareholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy solicitation or tender offer materials, as applicable, relating to the business combination contained an actionable material misstatement or material omission.
The officers and directors of an acquisition candidate may resign upon completion of our initial business combination. The loss of a business combination target’s key personnel could negatively impact the operations and profitability of our post-combination business.
The role of an acquisition candidate’s key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our initial business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.
Our executive officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination.
Our executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a business combination and their other businesses. We do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our executive officers is engaged in several other business endeavors for which he may be entitled to substantial compensation, and our executive officers are not obligated to contribute any specific number of hours per week to our affairs. Our independent directors also serve as officers and board members for other entities. If our executive officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete our initial business combination.
Our officers and directors presently have, and any of them in the future may have additional, fiduciary or contractual obligations to other entities and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
Following the completion of our initial public offering and until we consummate our initial business combination, we intend to engage in the business of identifying and combining with one or more businesses. Each of our officers and directors presently has, and any of them in the future may have, additional fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation to us, subject to their fiduciary duties under Cayman Islands law. Our amended and restated memorandum and articles of association provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the company and it is an opportunity that we are able to complete on a reasonable basis.
In addition, our sponsor and our officers and directors may sponsor or form other special purpose acquisition companies similar to ours or may pursue other business or investment ventures during the period in which we are seeking an initial business combination. Any such companies, businesses or investments may present additional conflicts of interest in pursuing an initial business combination. However, we do not believe that any such potential conflicts would materially affect our ability to complete our initial business combination.
Our executive officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy that expressly prohibits our directors, executive officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may enter into a business combination with a target business that is affiliated with our sponsor, our directors or executive officers, although we do not intend to do so. Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours.
The personal and financial interests of our directors and officers may influence their motivation in timely identifying and selecting a target business and completing a business combination. Consequently, our directors’ and officers’ discretion in identifying and selecting a suitable target business may result in a conflict of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate and in our shareholders’ best interest. If this were the case, it would be a breach of their fiduciary duties to us as a matter of Cayman Islands law and we or our shareholders might have a claim against such individuals for infringing on our shareholders’ rights. However, we might not ultimately be successful in any claim we may make against them for such reason.
We may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated with our sponsor, executive officers, directors or existing holders which may raise potential conflicts of interest.
In light of the involvement of our sponsor, executive officers and directors with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, executive officers, directors or existing holders. Our directors also serve as officers and board members for other entities. In addition, our sponsor and our officers and directors may sponsor or form other special purpose acquisition companies similar to ours or may pursue other business or investment ventures during the period in which we are seeking an initial business combination. Any such companies, businesses or investments may present additional conflicts of interest in pursuing an initial business combination. However, we do not believe that any such potential conflicts would materially affect our ability to complete our initial business combination. Such entities may compete with us for business combination opportunities. Our sponsor, officers and directors are not currently aware of any specific opportunities for us to complete our initial business combination with any entities with which they are affiliated, and there have been no substantive discussions concerning a business combination with any such entity or entities. Despite our agreement to obtain an opinion from an independent investment banking firm which is a member of FINRA or an independent accounting firm regarding the fairness to our company from a financial point of view of a business combination with one or more domestic or international businesses affiliated with our sponsor, executive officers, directors or existing holders, potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to our public shareholders as they would be absent any conflicts of interest.
Since our sponsor, executive officers and directors will lose their entire investment in us if our initial business combination is not completed (other than with respect to public shares they may have acquired or may acquire during or after our initial public offering), a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.
As of December 31, 2018, our sponsor owned an aggregate of 11,680,000 Class B ordinary shares and our independent directors owned an aggregate of 195,000 Class B ordinary shares. The founder shares will be worthless if we do not complete an initial business combination. In addition, our sponsor has committed, pursuant to a written agreement, to purchase an aggregate of 7,200,000 Private Placement Warrants, each exercisable to purchase one Class A ordinary shareCommon Stock at $11.50 per share, at a priceshare. Such Private Placement Warrants, when exercised, will increase the number of $1.50 per warrant ($10,800,000 in the aggregate), in a private placement that closed simultaneously with the closing of our initial public offering. If we do not complete our initial business combination within 24 months from the closing of our initial public offering, the private placement warrants will expire worthless. The personalissued and financial interests of our executive officersoutstanding Class A Common Stock and directors may influence their motivation in identifying and selecting a target business combination, completing an initial business combination and influencing the operation of the business following the initial business combination. This risk may become more acute as the 24-month anniversary of the closing of our initial public offering nears, which is the deadline for our completion of an initial business combination.
We may issue notes or other debt securities, or otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition and thus negatively impactreduce the value of our shareholders’ investment in us.
Although we have no commitments asthe Class A Common Stock.
We may only be able to complete one business combination with the proceeds of our initial public offering and the sale of the private placement warrants, which will cause us to be solely dependent on a single business which may have a limited number of products or services. This lack of diversification may negatively impact our operations and profitability.
As of December 31, 2018, the net proceeds from our initial public offering, the private placement of warrants and the future sale of the forward purchase securities provide us with approximately $460,779,187 that we may use to complete our initial business combination (after payment of offering costs, including the $15,450,000 in deferred underwriting commissions and deferred legal fees).
We may effectuate our initial business combination with a single target business or multiple target businesses simultaneously or within a short period of time. However, we may not be able to effectuate our initial business combination with more than one target business because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By completing our initial business combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory developments. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different areas of a single industry. Accordingly, the prospects for our success may be:
This lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.
We may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise to increased costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete our initial business combination. With multiple business combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business. If we are unable to adequately address these risks, it could negatively impact our profitabilityimplement and results of operations.
We may attempt to complete our initial business combination with a private company about which little information is available, which may result in a business combination with a company that is not as profitable as we suspected, if at all.
In pursuing our business combination strategy, we may seek to effectuate our initial business combination with a privately held company. By definition, very little public information generally exists about private companies, and we could be required to make our decision on whether to pursue a potential initial business combination on the basis of limited information, which may result in a business combination with a company that is not as profitable as we suspected, if at all.
Our management may not be able to maintain effective internal control of a target business after our initial business combination. We cannot provide assurance that, upon loss of control of a target business, new management will possess the skills, qualifications or abilities necessary to profitably operate such business.
We may structure our initial business combination so that the post-transaction company in which our public shareholders own shares will own less than 100% of the equity interests or assets of a target business, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interestover financial reporting in the target sufficient for us not to be required to register as an investment company under the Investment Company Act. We will not consider any transaction that does not meet such criteria. Even if the post-transaction company owns 50% or more of the voting securities of the target, our shareholders prior to our initial business combinationfuture, investors may collectively own a minority interestlose confidence in the post business combination company, depending on valuations ascribedaccuracy and completeness of our financial reports, and the market price of our common stock may be seriously harmed.
We do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete our initial business combination with which a substantial majority of our shareholders do not agree.
Our amended and restated memorandum and articles of association do not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (such that we are notbecome subject to the SEC’s “penny stock” rules). As a result, we may be able to complete our initial business combination even though a substantial majority of our public shareholders do not agree with the transactionadditional risks and have redeemed their shares or, if we seek shareholder approval of our initial business combinationuncertainties, including, among others, increased professional fees and do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, entered into privately negotiated agreements to sell their shares to our sponsor, officers, directors, advisors or any of their affiliates. In the event the aggregate cash consideration we would be required to pay for all Class A ordinary sharesexpenses and time commitment that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, all Class A ordinary shares submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.
In order to effectuate an initial business combination, special purpose acquisition companies have, in the recent past, amended various provisions of their charters and other governing instruments, including their warrant agreements. We cannot assure you that we will not seek to amend our amended and restated memorandum and articles of association or governing instruments in a manner that will make it easier for us to complete an initial business combination that some of our shareholders may not support.
In order to effectuate a business combination, special purpose acquisition companies have, in the recent past, amended various provisions of their charters and governing instruments, including their warrant agreements. For example, special purpose acquisition companies have amended the definition of business combination, increased redemption thresholds and extended the time to consummate an initial business combination and, with respect to their warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities. Amending our amended and restated memorandum and articles of association will require at least a special resolution of our shareholders as a matter of Cayman Islands law, meaning the approval of holders of not less than two-thirds of our ordinary shares who attend and vote at a general meeting of the company, and amending our warrant agreement in a manner that would adversely impact the registered holders of public warrants will require a vote of holders of at least 50% of the public warrants and, solely with respect to any amendment to the terms of the private placement warrants or any provision of the warrant agreement with respect to the private placement warrants, 50% of the then outstanding private placement warrants. In addition, our amended and restated memorandum and articles of association require us to provide our public shareholders with the opportunity to redeem their public shares for cash if we propose an amendment to our amended and restated memorandum and articles of association to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete an initial business combination within 24 months of the closing of our initial public offering. To the extent any of such amendments would be deemed to fundamentally change the nature of any of the securities offered in our initial public offering, we would register, or seek an exemption from registration for, the affected securities. We cannot assure you that we will not seek to amend our amended and restated memorandum and articles of association or governing instruments or extend the time to consummate an initial business combination in order to effectuate our initial business combination.
The provisions of our amended and restated memorandum and articles of association that relate to our pre-business combination activity (and corresponding provisions of the agreement governing the release of funds from our trust account) may be amended with the approval of holders of not less than two-thirds of our ordinary shares who attend and vote at a general meeting of the company (or 65% of our ordinary shares with respect to amendments to the trust agreement governing the release of funds from our trust account), which is a lower amendment threshold than that of some other special purpose acquisition companies. It may be easier for us, therefore, to amend our amended and restated memorandum and articles of association to facilitate the completion of an initial business combination that some of our shareholders may not support.
Our amended and restated memorandum and articles of association provide that any of its provisions related to pre-business combination activity (including the requirement to deposit proceeds of our initial public offering and the private placement of warrants into the trust account and not release such amounts except in specified circumstances, and to provide redemption rights to public shareholders as described herein) may be amended if approved by special resolution, meaning holders of not less than two-thirds of our ordinary shares who attend and vote at a general meeting of the company, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of 65% of our ordinary shares. Our initial shareholders, who collectively beneficially own 21.25% of our ordinary shares upon the closing of our initial public offering, will participate in any vote to amend our amended and restated memorandum and articles of association and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated memorandum and articles of association which govern our pre-business combination behavior more easily than some other special purpose acquisition companies, and this may increase our ability to complete a business combination with which you do not agree. Our shareholders may pursue remedies against us for any breach of our amended and restated memorandum and articles of association.
Our sponsor, executive officers and directors agreed, pursuant to agreements with us, that they will not propose any amendment to our amended and restated memorandum and articles of association to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of our initial public offering, unless we provide our public shareholders with the opportunity to redeem their Class A ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of taxes paid or payable), divided by the number of then outstanding public shares. Our shareholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against our sponsor, executive officers or directors for any breach of these agreements. As a result, in the event of a breach, our shareholders would need to pursue a shareholder derivative action, subject to applicable law.
We may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon a particular business combination. If we are unable to complete our initial business combination, our public shareholders may only receive their pro rata portion of the funds in the trust account that are available for distribution to public shareholders, and our warrants will expire worthless.
Although we believe that the net proceeds of our initial public offering and the sale of the private placement warrants and forward purchase securities will be sufficient to allow us to complete our initial business combination, we cannot ascertain the capital requirements for any particular transaction because we have not yet negotiated the acquisition of any prospective target business. If the net proceeds of our initial public offering and the sale of the private placement warrants and forward purchase securities prove to be insufficient, either because of the size of our initial business combination, the depletion of the available net proceeds in search of a target business, the obligation to repurchase for cash a significant number of shares from shareholders who elect redemption in connection with our initial business combination or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing oraddress matters related to abandon the proposed business combination. We cannot assure you that such financing will be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed to complete our initial business combination, we would be compelled to either restructure the transaction or abandon that particular business combinationrestatements, and seek an alternative target business candidate. If we are unable to complete our initial business combination, our public shareholders may only receive their pro rata portionscrutiny of the fundsSEC and other regulatory bodies which could cause investors to lose confidence in the trust accountour reported financial information and could subject us to civil or criminal penalties or shareholder litigation. We could face monetary judgments, penalties or other sanctions that are available for distribution to public shareholders, and our warrants will expire worthless. In addition, even if we do not need additional financing to complete our initial business combination, we may require such financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect on our business, financial condition and results of operations and could cause our stock price to decline.
Our initial shareholders control a substantial interest in us and thus may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support.
Our initial shareholders own 21.25% of our issued and outstanding ordinary shares. Accordingly, they may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support, including amendments to our amended and restated memorandum and articles of association. If our initial shareholders purchase any units or any additional Class A ordinary shares in the aftermarket or in privately negotiated transactions, this would increase their control. Neither our initial shareholders nor, to our knowledge, any of our officers or directors, have any current intention to purchase additional securities, other than as disclosed in this Annual Report. Factors that would be considered in making such additional purchases would include consideration of the current trading price of our Class A ordinary shares. In addition, our board of directors, whose members were elected by our sponsor, is and will be divided into three classes, each of which will generally serve for a terms for three years with only one class of directors being elected in each year. We may not hold an annual meeting of shareholders to elect new directors prior to the completion of our initial business combination, in which case all of the current directors will continue in office until at least the completion of the business combination. If there is an annual meeting,Warrants as a consequencewarrant liability recorded at fair value upon issuance with any changes in fair value each period reported in earnings based upon a valuation report obtained from its independent third-party valuation firm. The impact of our “staggered” board of directors, only a minority of the board of directors will be considered for election and our initial shareholders, because of their ownership position, will have considerable influence regarding the outcome. In addition, only holders of Class B ordinary shares will have the right to elect directorschanges in any election held prior to or in connection with the completion of our initial business combination, meaning that holders of Class A ordinary shares will not have the right to elect any directors until after the completion of our initial business combination. Accordingly, our initial shareholders will continue to exert substantial control at least until the completion of our initial business combination.
We may amend the terms of the warrants in a manner that may be adverse to holders of public warrants with the approval by the holders of at least 50% of the then outstanding public warrants. As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and the number of Class A ordinary shares purchasable upon exercise of a warrant could be decreased, all without your approval.
Our warrants were issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 50% of the then outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants. Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding public warrants approve of such amendment. Although our ability to amend the terms of the public warrants with the consent of at least 50% of the then outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash, shorten the exercise period or decrease the number of Class A ordinary shares purchasable upon exercise of a warrant.
We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last sale price of our Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period endingfair value on the third trading day prior to proper notice of such redemption provided that on the date we give notice of redemption. We will not redeem the warrants unless an effective registration statement under the Securities Act covering the Class A ordinary shares issuable upon exercise of the warrants is effective and a current prospectus relating to those Class A ordinary shares is available throughout the 30-day redemption period, except if the warrants may be exercised on a cashless basis and such cashless exercise is exempt from registration under the Securities Act. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding warrants could force you to (i) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of your warrants. None of the private placement warrants will be redeemable by us so long as they are held by their initial purchasers or their permitted transferees.
In addition, we may redeem your warrants after they become exercisable for a number of Class A ordinary shares determined based on the redemption date and the fair market value of our Class A ordinary shares. Any such redemption may have similar consequences to a cash redemption described above. In addition, such redemption may occur at a time when the warrants are “out-of-the-money,” in which case you would lose any potential embedded value from a subsequent increase in the value of the Class A ordinary shares had your warrants remained outstanding.
Our warrantsearnings may have an adverse effect on the market price of our Class A ordinaryCommon Stock.
financial condition or results of operations.
| For the Fiscal Year Ended December 31, 2023 | For the Fiscal Year Ended January 1, 2023 | |||||||||||||||||||||||||
| Net sales | $ | 1,438,237 | $ | 1,408,401 | ||||||||||||||||||||||
| Cost of goods sold | 981,751 | 959,344 | ||||||||||||||||||||||||
| Gross profit | 456,486 | 449,057 | ||||||||||||||||||||||||
| Selling, distribution and administrative expenses | ||||||||||||||||||||||||||
| Selling and distribution | 273,923 | 294,061 | ||||||||||||||||||||||||
| Administrative | 159,196 | 150,343 | ||||||||||||||||||||||||
| Total selling, distribution, and administrative expenses | 433,119 | 444,404 | ||||||||||||||||||||||||
| (Loss) gain on sale of assets, net | (7,350) | 691 | ||||||||||||||||||||||||
| Income from operations | 16,017 | 5,344 | ||||||||||||||||||||||||
| Other (expense) income | ||||||||||||||||||||||||||
| Interest expense | (60,590) | (44,424) | ||||||||||||||||||||||||
| Other income | 3,066 | 400 | ||||||||||||||||||||||||
| Gain on remeasurement of warrant liability | 2,232 | 720 | ||||||||||||||||||||||||
| Other expense, net | (55,292) | (43,304) | ||||||||||||||||||||||||
| Loss before income taxes | (39,275) | (37,960) | ||||||||||||||||||||||||
| Income tax expense (benefit) | 757 | (23,919) | ||||||||||||||||||||||||
| Net loss | (40,032) | (14,041) | ||||||||||||||||||||||||
| Net loss attributable to noncontrolling interest | 15,095 | 13,649 | ||||||||||||||||||||||||
| Net loss attributable to controlling interest | $ | (24,937) | $ | (392) | ||||||||||||||||||||||
| (dollars in millions) | For the Fiscal Year Ended December 31, 2023 | For the Fiscal Year Ended January 1, 2023 | ||||||||||||
| Net loss | $ | (40.0) | $ | (14.0) | ||||||||||
| Plus non-GAAP adjustments: | ||||||||||||||
| Income Tax Expense (Benefit) | 0.8 | (23.9) | ||||||||||||
| Depreciation and Amortization | 79.5 | 86.8 | ||||||||||||
| Interest Expense, Net | 60.6 | 44.4 | ||||||||||||
Interest Income (IO loans)(1) | (2.0) | (1.6) | ||||||||||||
| EBITDA | 98.9 | 91.7 | ||||||||||||
Certain Non-Cash Adjustments(2) | 50.7 | 11.3 | ||||||||||||
Acquisition and Integration(3) | 8.6 | 45.8 | ||||||||||||
Business Transformation Initiatives(4) | 31.0 | 22.1 | ||||||||||||
Financing-Related Costs(5) | 0.2 | 0.3 | ||||||||||||
Gain on remeasurement of warrant liability(6) | (2.2) | (0.7) | ||||||||||||
| Adjusted EBITDA | 187.2 | 170.5 | ||||||||||||
| Adjusted EBITDA as a % of Net Sales | 13.0 | % | 12.1 | % | ||||||||||
| (in thousands) | For the Fiscal Year Ended December 31, 2023 | For the Fiscal Year Ended January 1, 2023 | |||||||||||||||||||||||||||
| Net cash provided by operating activities | $ | 76,640 | $ | 48,193 | |||||||||||||||||||||||||
| Net cash used in investing activities | (48,492) | (76,067) | |||||||||||||||||||||||||||
| Net cash (used in) provided by financing activities | (49,055) | 58,906 | |||||||||||||||||||||||||||
Because each unit contains one-third of one warrant and only a whole warrant may be exercised, the units may be worth less than units of other special purpose acquisition companies.
Each unit contains one-third of one warrant. Pursuant to the warrant agreement, no fractional warrants will be issued upon separation of the units, and only whole units will trade. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the nearest whole number the number of Class A ordinary shares to be issued to the warrant holder. This is different from other offerings similar to ours whose units include one ordinary share and one warrant to purchase one whole share. We have established the components of the units in this way in order to reduce the dilutive effect of the warrants upon completioninterest rate swap agreements, the weighted average interest rate was 6.7% and 5.5%, respectively, as of a business combination since the warrants will be exercisableDecember 31, 2023 and January 1, 2023. A 1% increase in the aggregateSOFR rate would have resulted in an additional $3.3 million of interest expense during the fiscal year 2023 based on the unhedged portion of debt.
| Index to the Financial Statements | Page | |||||||
Report of Independent Registered Public Accounting Firm (Grant Thornton LLP, Philadelphia, PA, PCAOB ID Number 248) | ||||||||
| REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | |||||
A market for our securities may not develop, which would adversely affectopinion, the liquidity and price of our securities.
The price of our securities may vary significantly due to one or more potential business combinations and general market or economic conditions. Furthermore, an active trading market for our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless a market can be established and sustained.
Because we must furnish our shareholders with target business financial statements we may losepresent fairly, in all material respects, the ability to complete an otherwise advantageous initial business combinationfinancial position of the Company as of December 31, 2023 and January 1, 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with some prospective target businesses.
The federal proxy rules require that a proxy statement with respect to a vote on a business combination meeting certain financial significance tests include historical and/or pro forma financial statement disclosure in periodic reports. We will include the same financial statement disclosure in connection with our tender offer documents, whether or not they are required under the tender offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America, or GAAP, or international financial reporting standards as issued by the International Accounting Standards Board, or IFRS, depending on the circumstances and the historical financial statements may be required to beAmerica.
| REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | |||||
| As of December 31, 2023 | As of January 1, 2023 | |||||||||||||
| ASSETS | ||||||||||||||
| Current Assets | ||||||||||||||
| Cash and cash equivalents | $ | 52,023 | $ | 72,930 | ||||||||||
| Accounts receivable, less allowance of $2,933 and $1,815, respectively | 135,130 | 136,985 | ||||||||||||
| Inventories | 104,666 | 118,006 | ||||||||||||
| Prepaid expenses and other assets | 30,997 | 34,991 | ||||||||||||
| Current portion of notes receivable | 5,237 | 9,274 | ||||||||||||
| Total current assets | 328,053 | 372,186 | ||||||||||||
| Non-current Assets | ||||||||||||||
| Assets held for sale | 7,559 | — | ||||||||||||
| Property, plant and equipment, net | 318,881 | 345,198 | ||||||||||||
| Goodwill | 915,295 | 915,295 | ||||||||||||
| Intangible assets, net | 1,063,413 | 1,099,565 | ||||||||||||
| Non-current portion of notes receivable | 12,413 | 12,794 | ||||||||||||
| Other assets | 101,122 | 95,328 | ||||||||||||
| Total non-current assets | 2,418,683 | 2,468,180 | ||||||||||||
| Total assets | $ | 2,746,736 | $ | 2,840,366 | ||||||||||
| LIABILITIES AND EQUITY | ||||||||||||||
| Current Liabilities | ||||||||||||||
| Current portion of term debt | $ | 21,086 | $ | 18,472 | ||||||||||
| Current portion of other notes payable | 7,649 | 12,589 | ||||||||||||
| Accounts payable | 124,361 | 114,360 | ||||||||||||
| Accrued expenses and other | 77,590 | 92,012 | ||||||||||||
| Total current liabilities | 230,686 | 237,433 | ||||||||||||
| Non-current portion of term debt | 878,511 | 893,335 | ||||||||||||
| Non-current portion of other notes payable | 19,174 | 20,339 | ||||||||||||
| Non-current accrued expenses and other | 76,720 | 67,269 | ||||||||||||
| Non-current warrant liability | 43,272 | 45,504 | ||||||||||||
| Deferred tax liability | 114,690 | 124,802 | ||||||||||||
| Total non-current liabilities | 1,132,367 | 1,151,249 | ||||||||||||
| Total liabilities | 1,363,053 | 1,388,682 | ||||||||||||
| Commitments and contingencies | ||||||||||||||
| Equity | ||||||||||||||
| Shares of Class A Common Stock, $0.0001 par value; 1,000,000,000 shares authorized; 81,187,977 and 80,882,334 shares issued and outstanding as of December 31, 2023 and January 1, 2023, respectively. | 8 | 8 | ||||||||||||
| Shares of Class V Common Stock, $0.0001 par value; 61,249,000 shares authorized; 59,349,000 and 59,349,000 shares issued and outstanding as of December 31, 2023 and January 1, 2023, respectively. | 6 | 6 | ||||||||||||
| Additional paid-in capital | 944,573 | 926,919 | ||||||||||||
| Accumulated deficit | (298,049) | (254,564) | ||||||||||||
| Accumulated other comprehensive income | 22,958 | 30,777 | ||||||||||||
| Total stockholders’ equity | 669,496 | 703,146 | ||||||||||||
| Noncontrolling interest | 714,187 | 748,538 | ||||||||||||
| Total equity | 1,383,683 | 1,451,684 | ||||||||||||
| Total liabilities and equity | $ | 2,746,736 | $ | 2,840,366 | ||||||||||
| For the Fiscal Year Ended December 31, 2023 | For the Fiscal Year Ended January 1, 2023 | For the Fiscal Year Ended January 2, 2022 | |||||||||||||||||||||
| Net sales | $ | 1,438,237 | $ | 1,408,401 | $ | 1,180,713 | |||||||||||||||||
| Cost of goods sold | 981,751 | 959,344 | 796,804 | ||||||||||||||||||||
| Gross profit | 456,486 | 449,057 | 383,909 | ||||||||||||||||||||
| Selling, distribution and administrative expenses | |||||||||||||||||||||||
| Selling and distribution | 273,923 | 294,061 | 249,352 | ||||||||||||||||||||
| Administrative | 159,196 | 150,343 | 125,855 | ||||||||||||||||||||
| Total selling, distribution, and administrative expenses | 433,119 | 444,404 | 375,207 | ||||||||||||||||||||
| (Loss) gain on sale of assets, net | (7,350) | 691 | 1,864 | ||||||||||||||||||||
| Income from operations | 16,017 | 5,344 | 10,566 | ||||||||||||||||||||
| Other (expense) income | |||||||||||||||||||||||
| Interest expense | (60,590) | (44,424) | (34,708) | ||||||||||||||||||||
| Other income | 3,066 | 400 | 3,551 | ||||||||||||||||||||
| Gain on remeasurement of warrant liability | 2,232 | 720 | 36,675 | ||||||||||||||||||||
| Other (expense) income, net | (55,292) | (43,304) | 5,518 | ||||||||||||||||||||
| (Loss) income before income taxes | (39,275) | (37,960) | 16,084 | ||||||||||||||||||||
| Income tax expense (benefit) | 757 | (23,919) | 8,086 | ||||||||||||||||||||
| Net (loss) income | (40,032) | (14,041) | 7,998 | ||||||||||||||||||||
| Net loss attributable to noncontrolling interest | 15,095 | 13,649 | 12,557 | ||||||||||||||||||||
| Net (loss) income attributable to controlling interest | $ | (24,937) | $ | (392) | $ | 20,555 | |||||||||||||||||
(Loss) earnings per share of Class A Common Stock: (in dollars) | |||||||||||||||||||||||
| Basic | $ | (0.31) | $ | — | $ | 0.26 | |||||||||||||||||
| Diluted | $ | (0.31) | $ | — | $ | 0.25 | |||||||||||||||||
| Weighted-average shares of Class A Common Stock outstanding | |||||||||||||||||||||||
| Basic | 81,081,458 | 80,093,094 | 76,677,981 | ||||||||||||||||||||
| Diluted | 81,081,458 | 80,093,094 | 81,090,229 | ||||||||||||||||||||
| Net (loss) income | $ | (40,032) | $ | (14,041) | $ | 7,998 | |||||||||||||||||
| Other comprehensive (loss) gain: | |||||||||||||||||||||||
| Change in fair value of interest rate swap | (13,543) | 47,279 | 2,791 | ||||||||||||||||||||
| Comprehensive (loss) income | (53,575) | 33,238 | 10,789 | ||||||||||||||||||||
| Net comprehensive loss (income) attributable to noncontrolling interest | 20,819 | (6,568) | 12,557 | ||||||||||||||||||||
| Net comprehensive (loss) income attributable to controlling interest | $ | (32,756) | $ | 26,670 | $ | 23,346 | |||||||||||||||||
| Class A Common Stock | Class V Common Stock | Additional Paid-in Capital | Accumulated (Deficit) | Accumulated Other Comprehensive Income | Total Stockholders’ Equity | Non-controlling Interest | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at January 3, 2021 | 71,094,714 | $ | 7 | 60,349,000 | $ | 6 | $ | 793,461 | $ | (241,490) | $ | 924 | $ | 552,908 | $ | 831,994 | $ | 1,384,902 | ||||||||||||||||||||||||||||||||||||||||||||
| Conversion of warrants | 4,976,717 | — | — | 144,659 | — | — | 144,659 | (32,714) | 111,945 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tax impact arising from exchanges and exercises of warrants | — | — | (51,455) | — | — | (51,455) | — | (51,455) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | 573,214 | 1 | — | 12,960 | — | — | 12,961 | — | 12,961 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Exchange | 1,000,000 | — | (1,000,000) | — | 12,949 | — | — | 12,949 | (12,949) | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | 20,555 | — | 20,555 | (12,557) | 7,998 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | 2,791 | 2,791 | — | 2,791 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends declared ($0.204 per share of Class A Common Stock) | — | — | — | (15,663) | — | (15,663) | — | (15,663) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distribution to noncontrolling interest | — | — | — | — | — | — | (18,806) | (18,806) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at January 2, 2022 | 77,644,645 | $ | 8 | 59,349,000 | $ | 6 | $ | 912,574 | $ | (236,598) | $ | 3,715 | $ | 679,705 | $ | 754,968 | $ | 1,434,673 | ||||||||||||||||||||||||||||||||||||||||||||
| Payments of tax withholding requirements for employee stock awards | — | — | (6,217) | — | — | (6,217) | — | (6,217) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | 1,132,316 | — | — | 10,632 | — | — | 10,632 | — | 10,632 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock in connection with private placement sale | 2,105,373 | — | — | 28,000 | — | — | 28,000 | — | 28,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tax impact arising from capital transactions | — | — | (18,070) | — | — | (18,070) | — | (18,070) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | (392) | — | (392) | (13,649) | (14,041) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | 27,062 | 27,062 | 20,217 | 47,279 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($0.219 per share of Class A Common Stock) | — | — | — | (17,574) | — | (17,574) | — | (17,574) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distribution to noncontrolling interest | — | — | — | — | — | — | (12,998) | (12,998) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at January 1, 2023 | 80,882,334 | $ | 8 | 59,349,000 | $ | 6 | $ | 926,919 | $ | (254,564) | $ | 30,777 | $ | 703,146 | $ | 748,538 | $ | 1,451,684 | ||||||||||||||||||||||||||||||||||||||||||||
| Class A Common Stock | Class V Common Stock | Additional Paid-in Capital | Accumulated (Deficit) | Accumulated Other Comprehensive Income | Total Stockholders’ Equity | Non-controlling Interest | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at January 1, 2023 | 80,882,334 | $ | 8 | 59,349,000 | $ | 6 | $ | 926,919 | $ | (254,564) | $ | 30,777 | $ | 703,146 | $ | 748,538 | $ | 1,451,684 | ||||||||||||||||||||||||||||||||||||||||||||
| Payments of tax withholding requirements for employee stock awards | — | — | (589) | — | — | (589) | — | (589) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | 305,643 | — | — | 17,069 | — | — | 17,069 | — | 17,069 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tax impact arising from capital transactions | — | — | 1,174 | — | — | 1,174 | — | 1,174 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | (24,937) | — | (24,937) | (15,095) | (40,032) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | (7,819) | (7,819) | (5,724) | (13,543) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($0.228 per share of Class A Common Stock) | — | — | — | (18,548) | — | (18,548) | — | (18,548) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distribution to noncontrolling interest | — | — | — | — | — | — | (13,532) | (13,532) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2023 | 81,187,977 | $ | 8 | 59,349,000 | $ | 6 | $ | 944,573 | $ | (298,049) | $ | 22,958 | $ | 669,496 | $ | 714,187 | $ | 1,383,683 | ||||||||||||||||||||||||||||||||||||||||||||
| For the Fiscal Year Ended December 31, 2023 | For the Fiscal Year Ended January 1, 2023 | For the Fiscal Year Ended January 2, 2022 | |||||||||||||||||||||
| Cash flows from operating activities | |||||||||||||||||||||||
| Net (loss) income | $ | (40,032) | $ | (14,041) | $ | 7,998 | |||||||||||||||||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||||||||||||||
| Impairment and other charges | 12,575 | 4,678 | — | ||||||||||||||||||||
| Depreciation and amortization | 79,488 | 86,801 | 80,725 | ||||||||||||||||||||
| Gain on remeasurement of warrant liability | (2,232) | (720) | (36,675) | ||||||||||||||||||||
| Loss (gain) on sale of assets | 7,350 | (691) | (1,864) | ||||||||||||||||||||
| Stock based compensation | 17,069 | 10,632 | 12,961 | ||||||||||||||||||||
| Deferred income taxes | (8,938) | (29,359) | 4,828 | ||||||||||||||||||||
| Amortization of deferred financing costs | 1,556 | 1,933 | 3,919 | ||||||||||||||||||||
| Changes in assets and liabilities: | |||||||||||||||||||||||
| Accounts receivable, net | 1,855 | (5,597) | (4,528) | ||||||||||||||||||||
| Inventories | 12,652 | (38,490) | (10,595) | ||||||||||||||||||||
| Prepaid expenses and other assets | (14,433) | (18,379) | (2,931) | ||||||||||||||||||||
| Accounts payable and accrued expenses and other | 9,730 | 51,426 | (5,451) | ||||||||||||||||||||
| Net cash provided by operating activities | 76,640 | 48,193 | 48,387 | ||||||||||||||||||||
| Cash flows from investing activities | |||||||||||||||||||||||
| Acquisitions, net of cash acquired | — | (75) | (117,585) | ||||||||||||||||||||
| Purchases of property and equipment | (55,724) | (87,965) | (31,739) | ||||||||||||||||||||
| Purchases of intangibles | — | — | (1,757) | ||||||||||||||||||||
| Proceeds from sale of property and equipment | 9,539 | 4,333 | 3,033 | ||||||||||||||||||||
| Proceeds from sale of routes | 28,665 | 23,399 | 14,186 | ||||||||||||||||||||
| Proceeds from the sale of IO notes | 5,405 | 5,017 | 11,762 | ||||||||||||||||||||
| Proceeds from insurance claims for capital investments | 1,700 | 3,935 | — | ||||||||||||||||||||
| Notes receivable, net | (38,077) | (24,711) | (13,998) | ||||||||||||||||||||
| Net cash used in investing activities | (48,492) | (76,067) | (136,098) | ||||||||||||||||||||
| Cash flows from financing activities | |||||||||||||||||||||||
| Borrowings on line of credit | 71,000 | 79,000 | 121,135 | ||||||||||||||||||||
| Repayments on line of credit | (70,632) | (115,000) | (85,135) | ||||||||||||||||||||
| Borrowings on term debt and notes payable | 13,113 | 124,592 | 825,139 | ||||||||||||||||||||
| Repayments on term debt and notes payable | (29,211) | (21,037) | (795,488) | ||||||||||||||||||||
| Payment of debt issuance cost | (656) | (3,660) | (9,210) | ||||||||||||||||||||
| Payments of tax withholding requirements for employee stock awards | (589) | (6,217) | — | ||||||||||||||||||||
| Exercised warrants | — | — | 57,232 | ||||||||||||||||||||
| Proceeds from issuance of shares | — | 28,000 | — | ||||||||||||||||||||
| Dividends paid | (18,548) | (17,157) | (11,908) | ||||||||||||||||||||
| Distribution to noncontrolling interest | (13,532) | (9,615) | (18,987) | ||||||||||||||||||||
| Net cash (used in) provided by financing activities | (49,055) | 58,906 | 82,778 | ||||||||||||||||||||
| Net (decrease) increase in cash and cash equivalents | (20,907) | 31,032 | (4,933) | ||||||||||||||||||||
| Cash and cash equivalents at beginning of period | 72,930 | 41,898 | 46,831 | ||||||||||||||||||||
| Cash and cash equivalents at end of period | $ | 52,023 | $ | 72,930 | $ | 41,898 | |||||||||||||||||
Sale of private placement warrants to Sponsor in private placement Class A ordinary shares subject to possible redemption Operation and Comprehensive Income and our Consolidated Statements of Cash Flows, included in our Quarterly Report on Form 10-Q for the fiscal quarter ended April 3, 2022, the Company began combining Gain on disposal of property, plant and equipment, net and Gain on sale of routes, net, into a single line item as (Loss) gain on sale of assets to simplify our reporting presentation. The The Company accounts for accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. ASC held by the Company include cash and cash equivalents, accounts receivable, hedging instruments, warrants, purchase commitments on commodities, accounts payable and debt. The carrying value of all cash and cash equivalents, accounts receivable and accounts payable approximate their fair value due to their short-term nature. The carrying value of the debt is also estimated to approximate its fair value based upon current market conditions and interest rates. The fair value of the hedging instruments is revalued at each reporting period. The related gains and losses of the hedging instruments are reported in Prepaid expense and other assets and Accounts payable and accrued expenses and other on the Consolidated Statement of Cash Flow. pay off the ABL facility. The Real Estate Term Loan contains a single financial maintenance covenant consisting of a fixed charge coverage ratio that is tested quarterly only during a covenant trigger period consistent with the existing ABL facility. Concurrent with the closing of the Real Estate Term Loan, UQF entered into an interest rate swap transaction to fix the effective interest rate at approximately 5.93%, as discussed in further detail within "Note 9. Derivative Financial Instruments and Purchase Commitments”. In September 2023, the Company made an additional $4.4 million paydown of the Real Estate Term Loan using net proceeds from the sale of land to a third-party, as discussed within Note 4. “Property, Plant, and Equipment, Net”, as well as cash on hand. Following such paydown, the Real Estate Term Loan will amortize approximately $3.3 million in principal annually through maturity, subject to any additional advanced paydowns. ESPP. The As of December 31, 2023 and January 1, 2023, the Company and certain subsidiaries also had state NOL carryforwards in the amount of $48.1 million and $45.9 million, respectively. The December 31, 2023 and January 1, 2023, there were 7,200,000 Private Placement Warrants outstanding. 2023 has been audited by Grant Thornton LLP, an independent registered public accounting firm, as stated in their report included herein.We areAll intercompany transactions and balances have been eliminated in combination/consolidation.Loss of Emerging Growth Company Status – As of January 2, 2022, the Company no longer qualified as an emerging“emerging growth company, within the meaning” as defined in Section 2(a) of the Securities Act and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.We are an “emerging growth company” within the meaning of the Securities Act,1933, as amended (the "Securities Act"), as modified by the JOBSJumpstart our Business Startups Act of 2012, (the "JOBS Act”), and we may takepreviously took advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended (the "Sarbanes-Oxley Act"), reduced disclosure obligations regarding executive compensation in ourits periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholderstockholder approval of any golden parachute payments not previously approved. As a result, our shareholders may not have access to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our Class A ordinary shares held by non-affiliates exceeds $700 million as of any June 30 before that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accountant standards used.Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate a business combination, require substantial financial and management resources, and increase the time and costs of completing an acquisition.Section 404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending December 31, 2019. Only in the event we are deemed to be a large accelerated filer or an accelerated filer will we be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. Further, for as long as we remain an emerging growth company, we will not be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target business with which we seek to complete our initial business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.Because we are incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. Federal courts may be limited.We are an exempted company incorporated under the laws of the Cayman Islands. As a result, it may be difficult for investors to effect service of process within the United States upon our directors or executive officers, or enforce judgments obtained in the United States courts against our directors or officers.45Our corporate affairs are governed by our amended and restated memorandum and articles of association, the Companies Law (as the same may be supplemented or amended from time to time) and the common law of the Cayman Islands. We are also subject to the federal securities laws of the United States. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the decisions of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are different from what they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws as compared to the United States, and certain states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate law. In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action in a Federal court of the United States.We have been advised by our Cayman Islands legal counsel that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any state; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a United States company.Provisions in our amended and restated memorandum and articles of association may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A ordinary shares and could entrench management.Our amended and restated memorandum and articles of association contain provisions that may discourage unsolicited takeover proposals that shareholders may consider to be in their best interests. These provisions include a staggered board of directors, advance notice procedures, inability of shareholders to call a meeting of shareholders, removal of directors only for cause and only by the board of directors and the ability of the board of directors to designate the terms of and issue new series of preferred shares, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.Cyber incidents or attacks directed at us could result in information theft, data corruption, operational disruption and/or financial loss.We depend on digital technologies, including information systems, infrastructure and cloud applications and services, including those of third parties with which we may deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential data. As an early stage company without significant investments in data security protection, we may not be sufficiently protected against such occurrences. We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business and lead to financial loss.46Risks Associated with Acquiring and Operating a Business in Foreign CountriesIf we effect our initial business combination with a company located outside of the United States, we could be subject to a variety of additional risks that may adversely affect us. If we pursue a target company with operations or opportunities outside of the United States for our initial business combination, we may face additional burdens in connection with investigating, agreeing to and completing such initial business combination, and if we effect such initial business combination, we would be subject to a variety of additional risks that may negatively impact our operations.If we pursue a target a company with operations or opportunities outside of the United States for our initial business combination, we would be subject to risks associated with cross-border business combinations, including in connection with investigating, agreeing to and completing our initial business combination, conducting due diligence in a foreign jurisdiction, having such transaction approved by any local governments, regulators or agencies and changes in the purchase price based on fluctuations in foreign exchange rates.If we effect our initial business combination with such a company, we would be subject to any special considerations or risks associated with companies operating in an international setting, including any of the following:·costs and difficulties inherent in managing cross-border business operations;·rules and regulations regarding currency redemption;·complex corporate withholding taxes on individuals;·laws governing the manner in which future business combinations may be effected;·exchange listing and/or delisting requirements;·tariffs and trade barriers;·regulations related to customs and import/export matters;·local or regional economic policies and market conditions;·unexpected changes in regulatory requirements;·challenges in managing and staffing international operations;·longer payment cycles;·tax issues, such as tax law changes and variations in tax laws as compared to the United States;·currency fluctuations and exchange controls;·rates of inflation;·challenges in collecting accounts receivable;47·cultural and language differences;·employment regulations;·underdeveloped or unpredictable legal or regulatory systems;·corruption;·protection of intellectual property;·social unrest, crime, strikes, riots and civil disturbances;·regime changes and political upheaval;·terrorist attacks and wars; and·deterioration of political relations with the United States.We may not be able to adequately address these additional risks. If we were unable to do so, we may be unable to complete such initial business combination, or, if we complete such initial business combination, our operations might suffer, either of which may adversely impact our business, financial condition and results of operations.If our management following our initial business combination is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such laws, which could lead to various regulatory issues.Following our initial business combination, our management may resign from their positions as officers or directors of the company and the management of the target business at the time of the business combination will remain in place. Management of the target business may not be familiar with United States securities laws. If new management is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our operations.After our initial business combination, substantially all of our assets may be located in a foreign country and substantially all of our revenue will be derived from our operations in such country. Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic, political and legal policies, developments and conditions in the country in which we operate.The economic, political and social conditions, as well as government policies, of the country in which our operations are located could affect our business. Economic growth could be uneven, both geographically and among various sectors of the economy and such growth may not be sustained in the future. If in the future such country’s economy experiences a downturn or grows at a slower rate than expected, there may be less demand for spending in certain industries. A decrease in demand for spending in certain industries could materially and adversely affect our ability to find an attractive target business with which to consummate our initial business combination and if we effect our initial business combination, the ability of that target business to become profitable.Exchange rate fluctuations and currency policies may cause a target business’ ability to succeed in the international markets to be diminished.In the event we acquire a non-U.S. target, all revenues and income would likely be received in a foreign currency, and the dollar equivalent of our net assets and distributions, if any, could be adversely affected by reductions in the value of the local currency. The value of the currencies in our target regions fluctuate and are affected by, among other things, changes in political and economic conditions. Any change in the relative value of such currency against our reporting currency may affect the attractiveness of any target business or, following consummation of our initial business combination, our financial condition and results of operations. Additionally, if a currency appreciates in value against the dollar prior to the consummation of our initial business combination, the cost of a target business as measured in dollars will increase, which may make it less likely that we are able to consummate such transaction.48We may reincorporate in another jurisdiction in connection with our initial business combination, and the laws of such jurisdiction may govern some or all of our future material agreements and we may not be able to enforce our legal rights.In connection with our initial business combination, we may relocate the home jurisdiction of our business from the Cayman Islands to another jurisdiction. If we determine to do this, the laws of such jurisdiction may govern some or all of our future material agreements. The system of laws and the enforcement of existing laws in such jurisdiction may not be as certain in implementation and interpretation as in the United States. The inability to enforce or obtain a remedy under any of our future agreements could result in a significant loss of business, business opportunities or capital.Item 1B. Unresolved Staff CommentsNone.We currently maintain our executive offices at 200 Park Avenue, 58th Floor, New York, New York 10166. The cost for our use of this space is included in the $10,000 per month fee we pay to an affiliate of our sponsor for office space, administrative and support services. We consider our current office space adequate for our current operations.To the knowledge of our management, there is no litigation currently pending or contemplated against us, any of our officers or directors in their capacity as such or against any of our property.Item 4. Mine Safety DisclosuresNot applicable.49Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities(a)Market InformationOur units, Class A ordinary shares and warrants are each traded on the NYSE under the symbols “CCH.U,” “CCH” and “CCH WS,” respectively. Our units commenced public trading on October 5, 2018. Our Class A ordinary shares and warrants began separate trading on November 26, 2018.(b)HoldersOn December 31, 2018, there was one holder of record of our units, one holder of record of our Class A ordinary shares, 5 holders of our Class B ordinary shares and two holders of record of our warrants.(c)DividendsWe have not paid any cash dividends on our ordinary shares to date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our initial business combination. The payment of any cash dividends subsequent to our initial business combination will be within the discretion of our board of directors at such time. Further, if we incur any indebtedness in connection with a business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.(d)Securities Authorized for Issuance Under Equity Compensation PlansNone.(e)Performance GraphNot applicable.50(f)Recent Sales of Unregistered Securities; Use of Proceeds from Registered OfferingsUnregistered SalesOn May 2, 2018, we issued 2,875,000 Class B ordinary shares to our sponsor in exchange for a capital contribution of $25,000. On September 7, 2018, we effected a share capitalization resulting in the sponsor holding an aggregate of 10,937,500 founder shares. On September 10, 2018, the sponsor transferred 45,000, 45,000, 52,500 and 52,500 founder shares to each of Antonio F. Fernandez, Matthew M. Mannelly, William D. Toler and Craig D. Steeneck, respectively. On October 4, 2018, we effected a share capitalization resulting in an aggregate of 12,375,000 founder shares. On October 10, 2018, the underwriters partially exercised the over-allotment option, and an aggregate of 500,000 founder shares were subsequently surrendered to us by our sponsor for no consideration on October 19, 2018. Of the 11,875,000 shares outstanding as of December 31, 2018, our sponsor owned an aggregate of 11,680,000 Class B ordinary shares and the independent director owned an aggregate of 195,000 Class B ordinary shares.The founder shares will automatically convert into Class A ordinary shares upon the consummation of a Business combination, or earlier at the option of the holder, on a one-for-one basis. However, if additional Class A ordinary shares or any other equity-linked securities are issued or deemed issued in connection with the initial Business combination, the number of Class A ordinary shares issuable upon conversion of all founder shares will equal, in the aggregate, 20% of the total number of Class A ordinary shares outstanding after such conversion (after giving effect to any redemptions of Class A ordinary shares by public shareholders), including the total number of Class A ordinary shares issued or deemed issued, or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by us in connection with or in relation to the consummation of the initial business combination (including the forward purchase shares, but not the forward purchase warrants (both as defined below)), excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, or to be issued, to any seller in the initial business combination and any private placement warrants issued to the sponsor upon conversion of working capital loans, provided that such conversion of founder shares will never occur on a less than one-for-one basis.The holders of the founder shares agreed not to transfer, assign or sell any of their founder shares until the earlier to occur of: (i) one year after the completion of the initial business combination or (ii) the date on which we complete a liquidation, merger, share exchange or other similar transaction after the initial business combination that results in all of our shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property (except to certain permitted transferees). Any permitted transferees will be subject to the same restrictions and other agreements of the initial shareholders with respect to any founder shares. Notwithstanding the foregoing, if the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial business combination, the founder shares will be released from the lock-up.Our sponsor purchased7,200,000 private placement warrants at a price of $1.50 per warrant in a private placement that occurred concurrently with the closing of our initial public offering and generated gross proceeds of $10.8 million. Each private placement warrant is exercisable for one Class A ordinary share at a price of $11.50 per share. A portion of the proceeds from the sale of the private placement warrants were added to the proceeds from the initial public offering to be held in the trust account. If we do not complete a business combination within 24 months from the closing of the initial public offering, the private placement warrants will expire worthless. The private placement warrants are non-redeemable and exercisable on a cashless basis so long as they are held by the sponsor or its permitted transferees.The sale of the private placement warrants was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.Use of ProceedsOn October 10, 2018, we consummated the initial public offering of 44,000,000 units, including the issuance of 4,000,000 units as a result of the underwriters’ partial exercise of their over-allotment option. The units were sold at a price of $10.00 per Unit, generating gross proceeds to the Company of $440 million. Following the closing of the initial public offering and the private placement, $440,000,000 (which amount includes $15,400,000 of the underwriters’ deferred discount) was placed in the trust account.51There has been no material change in the planned use of proceeds from such use as described in the Company’s final prospectus (File No. 333-227295), dated October 4, 2018, which was declared effective by the SEC on October 4, 2018.(g)Purchases of Equity Securities by the Issuer and Affiliated PurchasersNone.Item 6. Selected Financial DataNot applicable.Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.References to the “company,” “Collier Creek Holdings,” “our,” “us” or “we” refer to Collier Creek Holdings, except where the context requires otherwise. The following discussion and analysis of the company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.Cautionary Note Regarding Forward-Looking StatementsAll statements other than statements of historical fact included in this Annual Report including, without limitation, statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward looking statements. When used in this Annual Report, words such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions, as they relate to us or our management, identify forward looking statements. Such forward looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, our management. No assurance can be given that results in any forward-looking statement will be achieved and actual results could be affected by one or more factors, which could cause them to differ materially. The cautionary statements made in this Annual Report should be read as being applicable to all forward-looking statements whenever they appear in this Annual Report. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors, including but not limited to, those detailed in our filings with the Securities and Exchange Commission. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are qualified in their entirety by this paragraph.OverviewWe are a blank check company incorporated on April 30, 2018 (inception) as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. Although we are not limited to a particular industry or geographic region for purposes of consummating a Business combination, we focus our search on the consumer goods industry and related sectors.The registration statement for our initial public offering was declared effective on October 4, 2018. On October 10, 2018, we consummated the initial public offering of 44,000,000 units, including the issuance of 4,000,000 units as a result of the underwriters’ partial exercise of their over-allotment option, at $10.00 per unit, generating gross proceeds of $440 million, and incurring offering costs of approximately $25.02 million, inclusive of $15.45 million in deferred legal fees and underwriting commissions. Each unit consists of one Class A ordinary share and one-third of one redeemable warrant. Each whole public shares entitles the holder to purchase one Class A ordinary share at an exercise price of $11.50 per share, subject to adjustment.52Simultaneously with the closing of the initial public offering, we consummated the private placement of 7,200,000 warrants at a price of $1.50 per warrant to our sponsor, generating gross proceeds of $10.8 million. Each private placement warrant is exercisable for one Class A ordinary share at a price of $11.50 per share.Upon the closing of the initial public offering and private placement, $440 million ($10.00 per unit) of the net proceeds of the initial public offering and the private placement were placed in a trust account and were invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by us meeting the conditions of paragraphs (c)(2), (c)(3) and (c)(4) of Rule 2a-7 of the Investment Company Act, as determined by us, until the earlier of: (i) the completion of a Business combination and (ii) the distribution of the trust account.Our management has broad discretion with respect to the specific application of the net proceeds of the initial public offering and the private placement, although substantially all of the net proceeds are intended to be applied toward identifying and consummating an initial Business combination.If we are unable to complete a Business combination within 24 months from the closing of the initial public offering, or October 10, 2020, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than five business days thereafter, redeem 100% of the outstanding public shares which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and our board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution of our company, subject in each case to its obligations to provide for claims of creditors and the requirements of applicable law.Results of OperationsOur entire activity from April 30, 2018 (inception) through December 31, 2018, was in preparation for our initial public offering, and since, such offering, our activity has been limited to the search for a prospective initial business combination. We will not generate any operating revenues until the closing and completion of our initial business combination.For the period from April 30, 2018 (inception) through December 31, 2018, we had a net income of approximately $1.9 million, which consisted of approximately $2.0 million in investment income, offset by approximately $137,000 in general and administrative costs.Liquidity and Capital ResourcesAs indicated in the accompanying financial statements, at December 31, 2018, we had approximately $945,000 in cash and working capital of approximately $1.1 million. Our liquidity needs prior to and for the initial public offering were satisfied through receipt of a $25,000 capital contribution from our sponsor in exchange for the issuance of the Founder Shares (as defined below), $155,000 in loans available from our sponsor under a promissory note (the “Note”) and the net proceeds from the consummation of the Private Placement. We fully repaid the Note on October 17, 2018, after the closing of the initial public offering.Related Party TransactionsFounder SharesOn May 2, 2018, we issued 2,875,000 Class B ordinary shares to our sponsor in exchange for a capital contribution of $25,000. On September 7, 2018, we effected a share capitalization resulting in the sponsor holding an aggregate of 10,937,500 founder shares. On September 10, 2018, the sponsor transferred 45,000, 45,000, 52,500 and 52,500 founder shares to each of Antonio F. Fernandez, Matthew M. Mannelly, William D. Toler and Craig D. Steeneck, respectively. On October 4, 2018, we effected a share capitalization resulting in an aggregate of 12,375,000 founder shares. On October 10, 2018, the underwriters partially exercised the over-allotment option, and an aggregate of 500,000 founder shares were subsequently surrendered to us by our sponsor for no consideration on October 19, 2018. Of the 11,875,000 shares outstanding as of December 31, 2018, our sponsor owned an aggregate of 11,680,000 Class B ordinary shares and the independent director owned an aggregate of 195,000 Class B ordinary shares.53The founder shares will automatically convert into Class A ordinary shares upon the consummation of a Business combination, or earlier at the option of the holder, on a one-for-one basis. However, if additional Class A ordinary shares or any other equity-linked securities are issued or deemed issued in connection with the initial Business combination, the number of Class A ordinary shares issuable upon conversion of all founder shares will equal, in the aggregate, 20% of the total number of Class A ordinary shares outstanding after such conversion (after giving effect to any redemptions of Class A ordinary shares by public shareholders), including the total number of Class A ordinary shares issued or deemed issued, or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by us in connection with or in relation to the consummation of the initial business combination (including the forward purchase shares, but not the forward purchase warrants (both as defined below)), excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, or to be issued, to any seller in the initial business combination and any private placement warrants issued to the sponsor upon conversion of working capital loans, provided that such conversion of founder shares will never occur on a less than one-for-one basis.The holders of the founder shares agreed not to transfer, assign or sell any of their founder shares until the earlier to occur of: (i) one year after the completion of the initial business combination or (ii) the date on which we complete a liquidation, merger, share exchange or other similar transaction after the initial business combination that results in all of our shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property (except to certain permitted transferees). Any permitted transferees will be subject to the same restrictions and other agreements of the Initial Shareholders with respect to any founder shares. Notwithstanding the foregoing, if the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial business combination, the founder shares will be released from the lock-up.Private PlacementSimultaneously with the closing of the initial public offering, we consummated the private placement of 7,200,000 private placement warrants at a price of $1.50 per warrant to our sponsor, generating gross proceeds of $10.8 million. Each private placement warrant is exercisable for one Class A ordinary share at a price of $11.50 per share. A portion of the proceeds from the sale of the private placement warrants were added to the proceeds from the initial public offering to be held in the trust account. If we do not complete a business combination within 24 months from the closing of the initial public offering, the private placement warrants will expire worthless. The private placement warrants are non-redeemable and exercisable on a cashless basis so long as they are held by the sponsor or its permitted transferees.Related Party LoansUnder the Note, our sponsor loaned us $155,000 to be used for the payment of costs related to the initial public offering. The Note was non-interest bearing, unsecured and was due upon the closing of the initial public offering. We fully repaid the Note on October 17, 2018.In addition, in order to finance transaction costs in connection with a business combination, the sponsor or an affiliate of the sponsor, or certain of our officers and directors may, but are not obligated to, loan us funds as may be required (the “Working Capital Loans”). If we complete a business combination, we would repay the Working Capital Loans out of the proceeds of the trust account released to us. In the event that a business combination does not close, we may use a portion of proceeds held outside the trust account to repay the Working Capital Loans but no proceeds held in the trust account would be used to repay the Working Capital Loans. Up to $1.5 million of such Working Capital Loans may be convertible into warrants of the post-business combination entity at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants. Except as set forth above, the terms of the Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans.54Administrative Service FeeWe agreed, commencing on the effective date of the initial public offering through the earlier of our consummation of a business combination or our liquidation, to pay an affiliate of our sponsor a monthly fee of $10,000 for office space and secretarial and administrative services. We recorded an aggregate of approximately $27,000 in general and administrative expenses in connection with this administrative services agreement in the accompanying statement of operations during the period from April 30, 2018 (inception) through December 31, 2018.Forward Purchase AgreementsOn September 7, 2018, we entered into forward purchase agreements with the sponsor and our independent directors which provide for the purchase of an aggregate of 3,500,000 forward purchase shares, plus an aggregate of 1,166,666 redeemable forward purchase warrants to purchase one Class A ordinary share at $11.50 per share, for an aggregate purchase price of $35,000,000, or $10.00 per Class A ordinary share, in a private placement to close concurrently with the closing of the initial business combination. The forward purchase warrants will have the same terms as the public warrants. These purchases will be made regardless of whether any Class A ordinary shares are redeemed by public shareholders. The forward purchase shares and forward purchase warrants will be issued only in connection with the closing of the initial business combination. The proceeds from the sale of forward purchase securities may be used as part of the consideration to the sellers in the initial business combination, expenses in connection with the initial business combination or for working capital in the post-transaction company.Contractual ObligationsRegistration RightsThe holders of the founder shares, private placement warrants and warrants that may be issued upon conversion of working capital loans (and any Class A ordinary shares issuable upon the exercise of the private placement warrants and warrants that may be issued upon conversion of working capital loans) are entitled to registration rights pursuant to a registration rights agreement entered into on the effective date of the initial public offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a business combination. We will bear the expenses incurred in connection with the filing of any such registration statements.Pursuant to the forward purchase agreements, we agreed to use our commercially reasonable best efforts (i) to file within 30 days after the closing of a business combination a registration statement with the SEC for a secondary offering of the forward purchase shares and the forward purchase warrants (and underlying Class A ordinary shares), (ii) to cause such registration statement to be declared effective promptly thereafter and (iii) to maintain the effectiveness of such registration statement until the earliest of (A) the date on which the sponsor and all of the independent directors or their respective assignees cease to hold the securities covered thereby and (B) the date all of the securities covered thereby can be sold publicly without restriction or limitation under Rule 144 under the Securities Act. In addition, the forward purchase agreements provide these holders will have certain “piggy-back” registration rights to include their securities in other registration statements filed by us.Underwriting AgreementWe granted the underwriters a 45-day option from the date of the prospectus relating to the initial public offering to purchase up to 6,000,000 additional units to cover over-allotments, if any, at the initial public offering price less the underwriting discounts and commissions. On October 10, 2018, the underwriters partially exercised this option in respect of 4,000,000 units, and, as agreed with the company, the underwriters waived their right to further exercise the over-allotment option.55The underwriters were entitled to underwriting discounts of $0.20 per unit, or $8.8 million in the aggregate, paid upon the closing of the initial public offering. In addition, the underwriters were entitled to a deferred underwriting commission of $0.35 per unit, or $15.4 million in the aggregate. The deferred underwriting fee will become payable to the underwriters from the amounts held in the trust account solely in the event that we complete a Business combination, subject to the terms of the underwriting agreement.Deferred Legal FeesWe are obligated to pay deferred legal fees of $50,000 upon the consummation of an initial business combination for services performed in connection with the initial public offering. If no business combination is consummated, we will not be obligated to pay such fees.Critical Accounting Policies and EstimatesThis management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial instruments and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe there have been no significant changes in our critical accounting policies as discussed in our final prospectus relating to our initial public offering and our Current Report on Form 8-K filed with the SEC on February 14, 2018 and February 22, 2018, respectively.Off-Balance Sheet ArrangementsAs of December 31, 2018, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations.JOBS ActOn April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We will qualify as an “emerging growth company” and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As such, our financial statements may not be comparable to companies that comply with public company effective dates.Recent Accounting PronouncementsIn August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of shareholders' equity for interim financial statements. Under the amendments, an analysis of changes in each caption of shareholders' equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. We anticipate our first presentation of changes in shareholders' equity will be included in our Form 10-Q for the quarter ended March 31, 2019.Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.56Item 7A. Quantitative and Qualitative Disclosures About Market Risk.All activity as of December 31, 2018, related to our formation and the initial public offering and identifying and evaluating prospective acquisition targets for an initial business combination.Following the consummation of our initial public offering, the portion of the net proceeds of the initial public offering and the sale of the private placement warrants held in the trust account were invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by us meeting the conditions of paragraphs (c)(2), (c)(3) and (c)(4) of Rule 2a-7 of the Investment Company Act, as determined by us, until the earlier of: (i) the completion of a Business combination and (ii) the distribution of the trust account. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.At December 31, 2018, $442,048,296 was held in the trust account for the purposes of consummating an initial business combination. If we complete an initial business combination within 24 months after the consummation of our initial public offering, funds in the trust account will be used to pay for the business combination, redemptions of Class A ordinary shares, if any, the deferred underwriting compensation and deferred legal costs of $15,450,000, and expenses related to the business combination. Any funds remaining will be made available to us to provide working capital to finance our operation.We have not engaged in any hedging activities since our inception. We do not expect to engage in any hedging activities with respect to the market risk to which we are exposed.Item 8. Financial Statements and Supplementary Data.This information appears following Item 16 of this Annual Report and is incorporated herein by reference.Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.None.Item 9A. Controls and Procedures.Disclosure Controls and ProceduresDisclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.As of December 31, 2018, as required by Rules 13a-15 and 15d-15 under the Exchange Act, our principal executive officer and our principal financial and accounting officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon their evaluation, our principal executive officer and our principal financial and accounting officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective.Management’s Report on Internal Controls Over Financial ReportingThis Annual Report on Form 10-K does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of our independent registered public accounting firm due to a transition period established by rules of the SEC for newly public companies.57Changes in Internal Control over Financial ReportingDuring the most recently completed fiscal quarter, there has been no change in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.None.58Item 10. Directors, Executive Officers and Corporate GovernanceDirectors and Executive OfficersOur officers and directors are as follows:NameAgePositionRoger K. Deromedi65Co-Executive ChairmanJason K. Giordano40Co-Executive ChairmanChinh E. Chu52Vice ChairmanAntonio F. Fernandez59DirectorMatthew M. Mannelly61DirectorCraig D. Steeneck61DirectorWilliam D. Toler59DirectorRoger K. Deromedi, 65, has been our Co-Executive Chairman since June 1, 2018. Mr. Deromedi has over 40 years of operational experience in the consumer goods sector, overseeing multiple businesses and iconic consumer brands. Mr. Deromedi was Independent Chairman and Lead Director of Pinnacle Foods from April 2016 to October 2018 and was Non-Executive Chairman from July 2009 to April 2016 and Executive Chairman from April 2007 to July 2009. Mr. Deromedi also was an advisor to Blackstone in relation to their acquisition of the company in April 2007. Pinnacle Foods is a manufacturer and marketer of consumer branded food products, whose key brands includeBirds Eye (frozen vegetables, meals, and sides),Duncan Hines (desserts),Vlasic (pickles),Wishbone (salad dressings),Aunt Jemima (breakfast products),Mrs. Butterworth andLog Cabin (syrups),Udi’s and Glutino (gluten-free products), andGardein (plant-based entrees and meat substitutes), among others. During Mr. Deromedi’s tenure, the company acquired and successfully integrated multiple businesses including Birds Eye Foods, Wishbone, Gardein, and Boulder Brands, consistently meeting or exceeding synergy targets. From July 2013 to June 2015, Mr. Deromedi was an Executive Advisor for Blackstone in the consumer goods sector, and was an independent advisor to Blackstone from 2007 to 2013. From 2003 to 2006, Mr. Deromedi was Chief Executive Officer of Kraft, at the time one of the world’s largest food companies, with iconic brands such asKraft,Maxwell House,Nabisco,Oscar Mayer andPhiladelphia. During this time, he integrated Kraft’s separate North American and International businesses. Prior to this, he was Co-CEO of Kraft from 2001 to 2003 during which time there was an initial public offering of the company, raising approximately $8.7 billion in gross proceeds. Mr. Deromedi was previously President of Kraft Foods International, President of the company’s Asia Pacific business, and President of Kraft’s Western European business, based in Zurich. He also served as Area Director of the company’s business in France, Iberia and Benelux, based in Paris, and was General Manager of Kraft’s cheese and specialty products businesses in the United States. He began his career with General Foods, Kraft’s predecessor company, in 1977 where he held various marketing positions. Mr. Deromedi previously served on the board of directors of Pinnacle Foods from 2007 to 2018, Kraft from 2001 to 2006 and The Gillette Company, Inc. from 2003 to 2005 (when the company was merged with The Procter & Gamble Company). Mr. Deromedi earned an M.B.A. from the Stanford Graduate School of Business and a B.A. in economics and mathematics from Vanderbilt University.Mr. Deromedi’s qualifications to serve on our board of directors include: his experience as a senior executive officer and/or director of multiple businesses in the consumer sector, his track record of building significant shareholder value, his experience in evaluating, executing, and integrating acquisitions, and his history of serving as a director for several public and private companies.59Jason K. Giordano, 40, has been our Co-Executive Chairman since June 1, 2018. Mr. Giordano has over 15 years of investment and acquisition experience, with a focus in the consumer goods and related sectors. Mr. Giordano has been a Senior Managing Director at CC Capital since November 2018. Previously, Mr. Giordano was a Managing Director in the private equity group at Blackstone where he oversaw investments in the consumer, education, packaging and chemicals sectors. During his over 11 year tenure at Blackstone from August 2006 to October 2017, Mr. Giordano was involved in 12 initial and follow-on acquisitions representing over $10 billion of transaction value, including several investments in consumer, retail and related businesses. Prior to Blackstone, Mr. Giordano was a private equity investment professional at Bain Capital, LP and an investment banker with Goldman, Sachs, & Co. Mr. Giordano previously served on the board of directors of Pinnacle Foods, Inc., a U.S.-based manufacturer and marketer of branded food products, from 2007 to September 2015, Crocs, Inc. (Nasdaq: CROX), a global supplier of branded footwear, from January 2015 to October 2017, AVINTIV, a global supplier of specialty materials primarily sold to consumer goods manufacturers, from January 2011 to October 2015, Outerstuff LLC, a leading U.S. supplier of licensed children’s sports apparel, from May 2014 to October 2017, Ascend Learning, LLC, a provider of online professional training tools and educational software, from July 2017 to October 2017 and HealthMarkets, Inc., a direct-to-consumer provider of health, life, supplemental, and other insurance and related products, from February 2009 to October 2017. He also served as a board observer and advisor to Trilliant Food & Nutrition LLC, a manufacturer of private label food and beverage products, from September 2017 to July 2018. In April 2015, Mr. Giordano was named to the National Association of Corporate Directors’ “NextGen” list of prominent public company directors under 40 years of age. Mr. Giordano earned an M.B.A. with high distinction from Harvard Business School, where he was a Baker Scholar, and an A.B. with high honors in economics from Dartmouth College.Mr. Giordano’s qualifications to serve on our board of directors include: his substantial investment and acquisition experience at blue chip financial institutions; his in-depth knowledge and strong network of relationships in consumer and related sectors; and his experience serving as a director for various public and private companies.Chinh E. Chu, 52, has been our Vice Chairman since June 1, 2018. Mr. Chu has over 25 years of investment and acquisition experience. In 2016, Mr. Chu co-founded CF Corporation for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. CF Corporation sold 69,000,000 units in its initial public offering, generating gross proceeds of $690,000,000. On November 30, 2017, CF Corporation consummated the acquisition of Fidelity & Guaranty Life, a provider of annuities and life insurance products, for approximately $1,835,000,000 plus the assumption of $405,000,000 of existing debt, and related transactions. In connection with the FGL business combination, the name of the company was changed from “CF Corporation” to “FGL Holdings” (NYSE: FG). Mr. Chu serves as Co-Executive Chairman of FGL Holdings. Mr. Chu is also the Founder and the Managing Partner of CC Capital, a private investment firm which he founded in November 2015. Before founding CC Capital, Mr. Chu worked at Blackstone from 1990 to December 2015, where Mr. Chu led numerous investments across multiple sectors, including technology, financial services, chemicals, specialty pharma and healthcare products, and packaging. Mr. Chu was a Senior Managing Director at Blackstone from 2000 until his departure in December 2015, where he served, at various points, as a member of Blackstone’s Executive Committee, the Co-Chair of Blackstone’s Private Equity Executive Committee and as a member of Blackstone Capital Partners’ Investment Committee. Before joining Blackstone in 1990, Mr. Chu worked at Salomon Brothers in the Mergers & Acquisitions Department. In addition to his role as Co-Executive Chairman of FGL Holdings, Mr. Chu has served on the boards of directors of The Dun & Bradstreet Corporation since February 2019 and NCR Corporation (NYSE: NCR) and Stearns Mortgage since 2015. Mr. Chu previously served on the board of directors of AVINTIV from 2011 to 2012, BankUnited Inc. from 2009 to 2014, Kronos Incorporated from 2014 to 2015, Biomet, Inc. from July 2007 to September 2007 and from 2013 to 2015, Freescale Semiconductor, Ltd. from 2011 to 2015 and HealthMarkets, Inc. from 2006 to 2016. He also previously served on the board of directors of Alliant Insurance Services, Inc., AlliedBarton Security Services, Celanese Corporation, DJO Global, Inc., Graham Packaging, the London International Financial Futures and Options Exchange, Nalco Company, Nycomed, Stiefel Laboratories and SunGard Data Systems, Inc. Mr. Chu received a B.S. in Finance from the University of Buffalo.60Mr. Chu’s qualifications to serve on our board of directors include: his substantial experience in mergers and acquisitions, corporate finance and strategic business planning; his track record at Blackstone and in advising and managing multi-national companies; and his experience serving as a director for various public and private companies.Antonio F. Fernandez, 59, served as Executive Vice President and Chief Supply Chain Officer of Pinnacle Foods from February 2011 to June 2016, where he was responsible for managing all aspects of the supply chain including procurement, manufacturing, distribution, product quality, innovation and sustainability. Mr. Fernandez also led Pinnacle Foods’s “maximizing value through productivity” continuous improvement initiatives, realizing gross savings of approximately 4% of cost of products sold annually. He was also closely involved in Pinnacle Foods’s acquisition, integration and synergy realization efforts. Prior to Pinnacle Foods, Mr. Fernandez was Senior Vice President, Operations Excellence at Kraft from 2010 to 2011. Prior to Kraft, Mr. Fernandez was Chief Supply Chain Officer at Cadbury plc, or Cadbury, from 2008 to 2010, where he managed a supply chain with total costs of approximately $7 billion, 67 manufacturing facilities and over 20,000 employees. From 2000 to 2010, Mr. Fernandez held several supply chain roles within Cadbury. Prior to Cadbury, Mr. Fernandez held various supply chain and related roles at Dr. Pepper, PepsiCo, Inc., and Procter & Gamble Co. Mr. Fernandez is President of AFF Advisors, LLC, an independent consulting firm, and has been a Senior Advisor to McKinsey & Company since August 2017. He has served on the board of directors of Liberty Property Trust (NYSE: LPT) since November 2014 and has been a Trustee of Lafayette College since May 2017.Mr. Fernandez’s qualifications to serve on our board of directors include: his substantial supply chain and operations experience at several publicly-traded consumer companies; his record of realizing cost efficiencies and integrating acquisitions; and his experience serving as a director of a public company.Matthew M. Mannelly, 61, served from September 2009 to May 2015 as Chief Executive Officer of Prestige Brands Holdings, or Prestige (NYSE: PBH), a leading supplier of branded over-the-counter medications and consumer healthcare products. During his tenure, Mr. Mannelly implemented several organizational changes, refined supply chain strategy, modified new product development, and increased investments in marketing and brand building activities. During Mr. Mannelly’s tenure, Prestige also successfully completed and integrated six strategic acquisitions, which further enhanced performance. Prestige reported that from 2010 to 2015, its Adjusted EBITDA nearly tripled, as net income grew from $32.2 million to $78.3 million, while Adjusted EBITDA as a percentage of net sales expanded by over 500 basis points over the same period. Prestige’s stock price increased from approximately $7 per share (as of September 2009) to approximately $44 per share (as of May 2015), a cumulative increase of approximately 506% or approximately a 37% annualized return. Prior to Prestige, Mr. Mannelly was Chief Executive Officer of Cannondale Bicycle Corporation from 2003 to 2008, where he led the restructuring and growth of the company leading up to its sale to a strategic buyer in 2008. Previously, Mr. Mannelly was President, Americas for Paxar Corporation from 2002 to 2003 and Chief Marketing Officer for the United States Olympic Committee from 2000 to 2002. He held various management roles at Nike, Inc. from 1993 to 2000, Sara Lee Corporation from 1992 to 1993, and Quaker Oats Company from 1983 to 1992. Mr. Mannelly has an M.B.A. from the University of North Carolina and a B.S. from Boston College. Mr. Mannelly has served on the board of directors of Spartan Nash (NYSE: SPTN), a grocery retailer and wholesale distributor, since February 2018. He previously served on the board of directors for Bauer Performance Sports from 2013 to 2017 and Prestige Brands from September 2009 to May 2015.Mr. Mannelly’s qualifications to serve on our board of directors include: his managerial experience at several publicly-traded and private consumer businesses; his track record of shareholder value creation; his experience across several consumer sub-sectors; and his experience serving as a public company director.Craig D. Steeneck, 61, served as the Executive Vice President and Chief Financial Officer of Pinnacle Foods from July 2007 to January 2019, where he oversaw the company’s financial operations, treasury, tax, investor relations, corporate development and information technology functions and was an integral part of Pinnacle Foods’s integration team for several of its acquisitions. From 2005 to 2007, Mr. Steeneck served as Executive Vice President, Supply Chain Finance and IT of Pinnacle Foods, helping to redesign the supply chain to generate savings and improve financial performance. From 2003 to 2005, Mr. Steeneck served as Executive Vice President, Chief Financial Officer and Chief Administrative Officer of Cendant Timeshare Resort Group (now Wyndham Destinations, Inc.), playing key roles in wide-scale organization of internal processes and staff management. From 2001 to 2003, he served as Chief Financial Officer of Resorts Condominiums International (now Wyndham Worldwide Corp.). From 1999 to 2001, he was the Chief Financial Officer of International Home Foods, Inc., a manufacturer of packaged food products acquired by ConAgra Foods in 2000. Mr. Steeneck has served on the board of directors and chairman of the audit committee of Freshpet, Inc. (Nasdaq: FRPT) since November 2014 and as a director and chairman of the audit committee of Hostess Brands, Inc. (Nasdaq: TWNK) since November 2016. Mr. Steeneck became the lead independent director of Hostess Brands, Inc. in January 2019.61Mr. Steeneck’s qualifications to serve on our board of directors include: his substantial financial operations, investment and acquisition experience; and his experience serving as a director for public companies.William D. Toler, 59, is currently Chairman and Chief Executive Officer of Hydrofarm and has been since January 2019. Previously, Mr. Toler served from April 2014 to April 2018 as Chief Executive Officer and President of Hostess Brands (Nasdaq: TWNK), a leading manufacturer of branded snacks and baked goods. During this time, Mr. Toler led the rebuilding of the iconic Hostess brand following the company’s 2013 acquisition out of bankruptcy by financial sponsors. During his tenure, the company increased its revenues, increased its market share, and completed several accretive add-on acquisitions. Mr. Toler also served as Chief Executive Officer through the company’s merger with a special purpose acquisition company in July 2016 and its initial listing as a publicly-traded company in November 2016. From 2008 to 2013, Mr. Toler served as the Chief Executive Officer of AdvancePierre Foods (which period includes his time as Chief Executive Officer of its predecessor Pierre Foods from 2008 to 2010), a leading supplier of value-added protein and hand-held convenience products to the food service, school, retail, club, vending and convenience store markets. During Mr. Toler’s tenure, the company completed several strategic acquisitions, including Pierre Foods’ strategic acquisitions in 2010 of Advance Food Company, Inc., Advance Brands LLC, and Barber Foods LLC to form AdvancePierre Foods. From 2003 to 2008, Mr. Toler held key leadership roles at Pinnacle Foods, including President from 2005 to 2008 and EVP of Sales from 2003 to 2005, leading numerous customer-facing and other strategic initiatives. From 1981 to 2003, Mr. Toler held various leadership and sales positions at ICG Commerce, Campbell Soup Company, Nabisco, Reckitt & Colman and Procter & Gamble. Mr. Toler served on the board of directors of Hostess Brands from April 2014 to April 2018, AdvancePierre Foods from 2008 to 2013, and Pinnacle Foods from 2007 to 2008.Mr. Toler’s qualifications to serve on our board of directors include: his managerial experience at several consumer businesses; his track record of shareholder value creation; his experience leading and integrating acquisitions; and his history serving as a director at other public and private companies.Number and Terms of Office of Officers and DirectorsOur board of directors is divided into three classes, with only one class of directors being elected in each year, and with each class (except for those directors appointed prior to our first annual meeting of shareholders) serving a three-year term. In accordance with the NYSE corporate governance requirements, we are not required to hold an annual meeting until one year after our first fiscal year end following our listing on the NYSE. The term of office of the first class of directors, consisting of Messrs. Mannelly and Fernandez, will expire at our first annual meeting of shareholders. The term of office of the second class of directors, consisting of Mr. Toler and Mr. Steeneck, will expire at our second annual meeting of shareholders. The term of office of the third class of directors, consisting of Messrs. Chu, Deromedi and Giordano, will expire at our third annual meeting of shareholders.Our officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized to appoint persons to the offices set forth in our amended and restated memorandum and articles of association as it deems appropriate. Our amended and restated memorandum and articles of association provide that our officers may consist of one or more chairmen of the board, chief executive officers, a president, chief financial officer, vice presidents, secretary, treasurer and such other offices as may be determined by the board of directors.62Committees of the Board of DirectorsOur board of directors has three standing committees: an audit committee, a compensation committee and a nominating and corporate governance committee.Audit CommitteeOur board of directors has established an audit committee. Messrs. Steeneck, Mannelly and Toler serve as members of the audit committee. Under the NYSE listing standards and applicable SEC rules, we are required to have three members of the audit committee, all of whom must be independent, subject to certain exceptions. Messrs. Steeneck, Mannelly and Toler are independent.Mr. Steeneck serves as the Chairman of the audit committee. Each member of the audit committee meets the financial literacy requirements of the NYSE, and our board of directors has determined that Messrs. Mannelly and Toler each qualifies as an “audit committee financial expert” as defined in applicable SEC rules. The primary purposes of our audit committee are to assist the board’s oversight of:·the integrity of our financial statements;·our compliance with legal and regulatory requirements;·the qualifications, engagement, compensation, independence and performance of our independent registered public accounting firm;·our process relating to risk management and the conduct and systems of internal control over financial reporting and disclosure controls and procedures; and·the performance of our internal audit function.The audit committee is governed by a charter that complies with the rules of the NYSE.Compensation CommitteeOur board of directors has established a compensation committee. The members of our compensation committee are Messrs. Steeneck, Toler and Fernandez, with Mr. Toler serving as chairman of the compensation committee.The primary purposes of our compensation committee are to assist the board in overseeing our management compensation policies and practices, including:·determining and approving the compensation of our executive officers; and·reviewing and approving incentive compensation and equity compensation policies and programs.The compensation committee is governed by a charter that complies with the rules of the NYSE. This charter provides that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by the NYSE and the SEC.Nominating and Corporate Governance CommitteeOur board of directors has established a nominating and corporate governance committee. The members of our nominating and corporate governance are Messrs. Deromedi, Mannelly and Fernandez, with Mr. Deromedi serving as chairman of the nominating and corporate governance committee. Because our securities are listed on the NYSE, we have one year from the date of our initial public offering to have our nominating and corporate governance committee be comprised solely of independent directors, at which time Mr. Deromedi will resign from the committee.63The primary purposes of our nominating and corporate governance committee will be to assist the board in:·identifying, screening and reviewing individuals qualified to serve as directors and recommending to the board of directors candidates for nomination for election at the annual meeting of shareholders or to fill vacancies on the board of directors;·developing, recommending to the board of directors and overseeing implementation of our corporate governance guidelines;·coordinating and overseeing the annual self-evaluation of the board of directors, its committees, individual directors and management in the governance of the company; and·reviewing on a regular basis our overall corporate governance and recommending improvements as and when necessary.The nominating and corporate governance committee is governed by a charter that complies with the rules of the NYSE.Director NominationsThe board of directors will also consider director candidates recommended for nomination by our shareholders during such times as they are seeking proposed nominees to stand for election at the next annual meeting of shareholders (or, if applicable, a special meeting of shareholders). Our shareholders that wish to nominate a director for election to our board of directors should follow the procedures set forth in our amended and restated memorandum and articles of association.We have not formally established any specific minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, our board of directors considers educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom and the ability to represent the best interests of our shareholders.Compensation Committee Interlocks and Insider ParticipationNone of our executive officers currently serves, and in the past year has not served, as a member of the compensation committee of any entity that has one or more executive officers serving on our board of directors.Section 16(a) Beneficial Ownership Reporting ComplianceSection 16(a) of the Exchange Act requires our officers, directors and persons who beneficially own more than ten percent of our ordinary shares to file reports of ownership and changes in ownership with the SEC. These reporting persons are also required to furnish us with copies of all Section 16(a) forms they file. Based solely upon a review of such forms, we believe that during the year ended December 31, 2018 there were no delinquent filers with the following exception: a Form 3 for Mr. Craig D. Steeneck, disclosing his beneficial ownership of 52,500 Class B ordinary shares, was not filed on time. On March 22, 2019, Mr. Steeneck took corrective action and filed a Form 3.Code of EthicsWe adopted a Code of Ethics applicable to our directors, officers and employees. We filed a copy of our Code of Ethics as an exhibit to the registration statement relating to our initial public offering. You will be able to review our Code of Ethics and the charters of the committees of our board of directors by accessing our public filings at the SEC’s web site at www.sec.gov. In addition, a copy of the Code of Ethics will be provided without charge upon request from us. We will disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.64Corporate Governance GuidelinesOur board of directors adopted corporate governance guidelines in accordance with the corporate governance rules of the NYSE that serve as a flexible framework within which our board of directors and its committees operate. These guidelines cover a number of areas including board membership criteria and director qualifications, director responsibilities, board agenda, roles of the chairman of the board, chief executive officer and presiding director, meetings of independent directors, committee responsibilities and assignments, board member access to management and independent advisors, director communications with third parties, director compensation, director orientation and continuing education, evaluation of senior management and management succession planning. A copy of our corporate governance guidelines has been posted on our website.Conflicts of InterestUnder Cayman Islands law, directors and officers owe the following fiduciary duties:·duty to act in good faith in what the director or officer believes to be in the best interests of the company as a whole;·duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose;·directors should not improperly fetter the exercise of future discretion;·duty to exercise powers fairly as between different sections of shareholders;·duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests; and·duty to exercise independent judgment.In addition to the above, directors also owe a duty of care which is not fiduciary in nature. This duty has been defined as a requirement to act as a reasonably diligent person having both the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company and the general knowledge skill and experience of that director.As set out above, directors have a duty not to put themselves in a position of conflict and this includes a duty not to engage in self-dealing, or to otherwise benefit as a result of their position. However, in some instances what would otherwise be a breach of this duty can be forgiven and/or authorized in advance by the shareholders provided that there is full disclosure by the directors. This can be done by way of permission granted in the amended and restated memorandum and articles of association or alternatively by shareholder approval at general meetings.Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to another entity pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such entity, subject to their fiduciary duties under Cayman Islands law. Our amended and restated memorandum and articles of association provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the company and it is an opportunity that we are able to complete on a reasonable basis. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our initial business combination.65In addition, our sponsor and our officers and directors may sponsor or form other special purpose acquisition companies similar to ours or may pursue other business or investment ventures during the period in which we are seeking an initial business combination. Any such companies, businesses or investments may present additional conflicts of interest in pursuing an initial business combination. However, we do not believe that any such potential conflicts would materially affect our ability to complete our initial business combination.Below is a table summarizing the entities to which our executive officers and directors currently have fiduciary duties or contractual obligations:IndividualEntityEntity’s BusinessAffiliationChinh E. ChuCC Capital Private InvestmentsFounder and Managing PartnerFGL HoldingsInsuranceCo-Executive ChairmanNCR CorporationSoftware, Computer Hardware and ElectronicsDirectorStearns MortgageMortgage ServicesDirectorThe Dun & Bradstreet CorporationBusiness ServicesDirectorAntonio F. FernandezAFF AdvisorsLiberty Property TrustMcKinsey & CompanyConsulting Firm Real Estate Investment TrustConsulting FirmPresident Board MemberSenior AdvisorJason K. GiordanoCC Capital Private InvestmentsSenior Managing DirectorMatthew M. MannellySpartan NashGrocery Retailer and Wholesale DistributorBoard MemberCraig D. SteeneckHostess BrandsFreshpetConsumer Food ProductsConsumer ProductsDirectorDirectorWilliam D. TolerHydrofarmHydroponic Garden SuppliesChairman and Chief Executive OfficerPotential investors should also be aware of the following other potential conflicts of interest:·Our executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a business combination and their other businesses. We do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our executive officers is engaged in several other business endeavors for which he may be entitled to substantial compensation, and our executive officers are not obligated to contribute any specific number of hours per week to our affairs.66·Our initial shareholders entered into agreements with us, pursuant to which they agreed to waive their redemption rights with respect to their founder shares and public shares in connection with the completion of our initial business combination. The other members of our management team entered into agreements similar to the one entered into by our sponsor with respect to any public shares acquired by them in or after our initial public offering. Additionally, our initial shareholders agreed to waive their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination within the prescribed time frame. If we do not complete our initial business combination within the prescribed time frame, the private placement warrants will expire worthless. Our initial shareholders agreed not to transfer, assign or sell any of their founder shares until the earlier to occur of: (i) one year after the completion of our initial business combination or (ii) the date following the completion of our initial business combination on which we complete a liquidation, merger, share exchange or other similar transaction that results in all of our shareholders having the right to exchange their ordinary shares for cash, securities or other property. Notwithstanding the foregoing, if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, the founder shares will be released from the lockup. The private placement warrants will not be transferable until 30 days following the completion of our initial business combination. Because each of our executive officers and directors will own ordinary shares or warrants directly or indirectly, they may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination.·Our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.·We are not prohibited from pursuing an initial business combination with a business combination target that is affiliated with our sponsor, officers or directors or making the acquisition through a joint venture or other form of shared ownership with our sponsor, officers or directors. In the event we seek to complete our initial business combination with an business combination target that is affiliated with our sponsor, executive officers or directors, we, or a committee of independent directors, would obtain an opinion from an independent investment banking which is a member of FINRA or an independent accounting firm, that such initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.·In no event will our sponsor or any of our existing officers or directors, or any of their respective affiliates, be paid by the company any finder’s fee, consulting fee or other compensation for services rendered prior to, or for any services they render in order to effectuate, the completion of our initial business combination. Commencing on the date our securities are first listed on the NYSE, we will pay $10,000 per month to an affiliate of our sponsor for office space, secretarial and administrative services provided to us. In addition, our sponsor, executive officers and directors, or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations.We cannot assure you that any of the above mentioned conflicts will be resolved in our favor.In the event that we submit our initial business combination to our public shareholders for a vote, our initial shareholders agreed to vote their founder shares, and they and the other members of our management team agreed to vote any shares purchased during or after the offering, in favor of our initial business combination.Limitation on Liability and Indemnification of Officers and DirectorsCayman Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against willful default, fraud or the consequences of committing a crime. Our amended and restated memorandum and articles of association provide for indemnification of our officers and directors to the maximum extent permitted by law, including for any liability incurred in their capacities as such, except through their own actual fraud, willful default or willful neglect. We have purchased a policy of directors’ and officers’ liability insurance that insures our officers and directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors.67Our officers and directors agreed to waive any right, title, interest or claim of any kind in or to any monies in the trust account, and agreed to waive any right, title, interest or claim of any kind they may have in the future as a result of, or arising out of, any services provided to us and will not seek recourse against the trust account for any reason whatsoever (except to the extent they are entitled to proceeds from the trust account due to their ownership of public shares). Accordingly, any indemnification provided will only be able to be satisfied by us if (i) we have sufficient funds outside of the trust account or (ii) we consummate an initial business combination.Our indemnification obligations may discourage shareholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful, might otherwise benefit us and our shareholders. Furthermore, a shareholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.We believe that these provisions, the insurance and the indemnity agreements are necessary to attract and retain talented and experienced officers and directors.Item 11. Executive Compensation.None of our executive officers or directors received any cash compensation for services rendered to us. Since the consummation of our initial public offering and until the earlier of consummation of our initial business combination and our liquidation, we will pay $10,000 per month to an affiliate of our sponsor for office space, secretarial and administrative services provided to us. In addition, our sponsor, executive officers and directors, or any of their respective affiliates are reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee reviews on a quarterly basis all payments that were made to our sponsor, executive officers or directors, or our or their affiliates. Any such payments prior to an initial business combination are made using funds held outside the trust account. Other than quarterly audit committee review of such reimbursements, we do not have any additional controls in place governing our reimbursement payments to our directors and executive officers for their out-of-pocket expenses incurred in connection with identifying and consummating an initial business combination. Other than these payments and reimbursements, no compensation of any kind, including finder’s and consulting fees, is paid by the company to our sponsor, executive officers and directors, or any of their respective affiliates, prior to completion of our initial business combination.After the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting or management fees from the combined company. All of these fees will be fully disclosed to shareholders, to the extent then known, in the proxy solicitation materials or tender offer materials furnished to our shareholders in connection with a proposed business combination. We have not established any limit on the amount of such fees that may be paid by the combined company to our directors or members of management. It is unlikely the amount of such compensation will be known at the time of the proposed business combination, because the directors of the post-combination business will be responsible for determining executive officer and director compensation. Any compensation to be paid to our executive officers will be determined, or recommended to the board of directors for determination, either by a compensation committee constituted solely by independent directors or by a majority of the independent directors on our board of directors.68We do not intend to take any action to ensure that members of our management team maintain their positions with us after the consummation of our initial business combination, although it is possible that some or all of our executive officers and directors may remain directors or negotiate employment or consulting arrangements to remain with us after our initial business combination. The existence or terms of any such employment or consulting arrangements to retain their positions with us may influence our management’s motivation in identifying or selecting a target business but we do not believe that the ability of our management to remain with us after the consummation of our initial business combination will be a determining factor in our decision to proceed with any potential business combination. We are not party to any agreements with our executive officers and directors that provide for benefits upon termination of employment.Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersThe following table sets forth information available to us at March 28, 2019 with respect to our ordinary shares held by:each person known by us to be the beneficial owner of more than 5% of our outstanding ordinary shares;each of our executive officers, and director that beneficially owns ordinary shares; andall our executive officers and directors as a group.Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all of our ordinary shares beneficially owned by them. The following table does not reflect beneficial ownership of the private placement warrants as these warrants are not exercisable within 60 days of March 28, 2019. The table also excludes Class A ordinary shares issuable pursuant to the forward purchase agreements, as such shares will only be issued concurrently with the closing of our initial business combination. Class B ordinary shares(2) Class A ordinary shares Name of Beneficial Owners(1) Number of
Shares
Beneficially
Owned Approximate
Percentage of
Class Number of
Shares
Beneficially
Owned Approximate
Percentage of
Class Approximate
Percentage of
Voting
Control T. Rowe Price Associates, Inc.(3) — — 5,095,679 11.58 % 9.12 % Manulife Asset Management Limited(4) — — 3,175,040 7.22 % 5.68 % Collier Creek Partners LLC (our sponsor)(5) 11,680,000 98.36 % — — 20.90 % Chinh E. Chu(5) 11,680,000 98.36 % — — 20.90 % Roger K. Deromedi(5) 11,680,000 98.36 % — — 20.90 % Jason K. Giordano(5) 11,680,000 98.36 % — — 20.90 % Antonio F. Fernandez 45,000 * — — * Matthew M. Mannelly 45,000 * — — * William D. Toler 52,500 * — — * Craig D. Steeneck 52,500 * — — * 1 officer and the directors as a group (seven individuals) 11,875,000 100 % — — 21.25 % *Less than one percent.(1) Unless otherwise noted, the business address of each of our shareholders is 200 Park Avenue, 58th Floor, New York, New York 10166(2) Interests shown consist of Class B ordinary shares, which will automatically convert into Class A ordinary shares concurrently with or immediately following the consummation of our initial business combination, or earlier at the option of the holder thereof.(3) Incudes Class A ordinary shares beneficially held by T. Rowe Price Associates, Inc. (“Price Associates”), based solely on the Schedule 13G filed by Price Associates with the SEC on February 14, 2019. The business address of Price Associates is 100 E. Pratt Street, Baltimore, MD 21202.69(4) Incudes Class A ordinary shares beneficially held by Manulife Financial Corporation (“MFC”) and MFC’s indirect, wholly-owned subsidiaries, Manulife Asset Management Limited (“MAML”), based solely on the Schedule 13G filed jointly by MFC and MAML with the SEC on February 14, 2019. The business address of MFC and MAML is 200 Bloor Street East, Toronto, Ontario, Canada, M4W 1E5.(5) Collier Creek Partners LLC is the record holder of such ordinary shares. Chinh E. Chu, Roger K. Deromedi and Jason K. Giordano are the managers of Collier Creek Partners LLC and share voting and investment discretion with respect to the ordinary shares held of record by Collier Creek Partners LLC. Each of Messrs. Chu, Deromedi and Giordano disclaims beneficial ownership over any securities owned by Collier Creek Partners LLC other than to the extent of any pecuniary interest he may have therein, directly or indirectly.Our initial shareholders beneficially own 21.25% of the issued and outstanding ordinary shares and have the right to elect all of our directors prior to our initial business combination. Holders of our public shares do not have the right to elect any directors to our board of directors prior to our initial business combination. Because of this ownership block, our initial shareholders may be able to effectively influence the outcome of all other matters requiring approval by our shareholders, including amendments to our amended and restated memorandum and articles of association and approval of significant corporate transactions including our initial business combination.Our sponsor purchased an aggregate of 7,200,000 private placement warrants, each exercisable to purchase one Class A ordinary share at $11.50 per share, at a price of $1.50 per warrant ($10,800,000 in the aggregate), in a private placement that closed simultaneously with the closing of our initial public offering. If we do not complete our initial business combination within 24 months from the closing of our initial public offering, the private placement warrants will expire worthless. The private placement warrants are subject to the transfer restrictions described below. The private placement warrants will not be redeemable by us so long as they are held by the initial purchasers or their permitted transferees. Our sponsor, or its permitted transferees, has the option to exercise the private placement warrants on a cashless basis. If the private placement warrants are held by holders other than initial purchasers or their permitted transferees, the private placement warrants will be redeemable by us and exercisable by the holders on the same basis as the warrants included in the units being sold in our initial public offering. Otherwise, the private placement warrants have terms and provisions that are identical to those of the warrants being sold as part of the units in our initial public offering.Our sponsor and our independent directors have agreed to make an aggregate investment of $35,000,000 in us at the time of our initial business combination. We entered into forward purchase agreements with our sponsor and our independent directors which provide for the purchase of an aggregate of 3,500,000 Class A ordinary shares, plus an aggregate of 1,166,666 redeemable warrants to purchase one Class A ordinary share at $11.50 per share, for an aggregate purchase price of $35,000,000, or $10.00 per Class A ordinary share, in a private placement that will close concurrently with the closing of our initial business combination. The forward purchase warrants have the same terms as our public warrants. These purchases will be made regardless of whether any Class A ordinary shares are redeemed by our public shareholders. The forward purchase securities will be issued only in connection with the closing of the initial business combination. The proceeds from the sale of forward purchase securities may be used as part of the consideration to the sellers in our initial business combination, expenses in connection with our initial business combination or for working capital in the post-transaction company.Collier Creek Partners LLC, our sponsor, and Messrs. Chu, Deromedi and Giordano are deemed to be our “promoters” as such term is defined under the federal securities laws.70Transfers of Founder Shares and Private Placement WarrantsThe founder shares, private placement warrants and any Class A ordinary shares issued upon conversion or exercise thereof are each subject to transfer restrictions pursuant to lock-up provisions in the agreements entered into by our initial shareholders and management team. Our initial shareholders agreed to not transfer, assign or sell any of their founder shares until the earlier of (A) one year after the completion of our initial business combination or earlier if, subsequent to our initial business combination, the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination and (B) the date following the completion of our initial business combination on which we complete a liquidation, merger, share exchange or other similar transaction that results in all of our shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property. The private placement warrants and the respective Class A ordinary shares underlying such warrants are not transferable or salable until 30 days after the completion of our initial business combination except in each case (a) to our officers or directors, any affiliates or family members of any of our officers or directors, any members of our sponsor, or any affiliates of our sponsor, (b) in the case of an individual, by gift to a member of one of the individual’s immediate family or to a trust, the beneficiary of which is a member of the individual’s immediate family, an affiliate of such person or to a charitable organization; (c) in the case of an individual, by virtue of laws of descent and distribution upon death of the individual; (d) in the case of an individual, pursuant to a qualified domestic relations order; (e) by private sales or transfers made in connection with any forward purchase agreement or similar arrangement or in connection with the consummation of a business combination at prices no greater than the price at which the shares were originally purchased; (f) by virtue of the laws of the State of Delaware or the limited liability company agreement of our sponsor upon dissolution of the sponsor in the event of our liquidation prior to our completion of our initial business combination; (g) in the event of the company’s liquidation prior to the completion of a business combination; or (h) in the event of our completion of a liquidation, merger, share exchange or other similar transaction which results in all of our shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property subsequent to our completion of our initial business combination; provided, however, that in the case of clauses (a) through (f) these permitted transferees must enter into a written agreement agreeing to be bound by these transfer restrictions and the other restrictions contained in the letter agreements.Registration RightsThe holders of the founder shares, private placement warrants and warrants that may be issued upon conversion of working capital loans will have registration rights to require us to register a sale of any of our securities held by them pursuant to a registration rights agreement to be entered into prior to or on the effective date of our initial public offering. These holders will be entitled to make up to three demands, excluding short form registration demands, that we register such securities for sale under the Securities Act. In addition, these holders will have “piggy-back” registration rights to include their securities in other registration statements filed by us.Pursuant to the forward purchase agreements, we agreed that we will use our commercially reasonable best efforts (i) to file within 30 days after the closing of the initial business combination a registration statement with the SEC for a secondary offering of the forward purchase shares and the forward purchase warrants (and underlying Class A ordinary shares), (ii) to cause such registration statement to be declared effective promptly thereafter and (iii) to maintain the effectiveness of such registration statement until the earliest of (A) the date on which the sponsor and all of the independent directors or their respective assignees cease to hold the securities covered thereby and (B) the date all of the securities covered thereby can be sold publicly without restriction or limitation under Rule 144 under the Securities Act. In addition, the forward purchase agreements provide these holders will have certain “piggy-back” registration rights to include their securities in other registration statements filed by us.Equity Compensation PlansAs of December 31, 2018, we had no compensation plans (including individual compensation arrangements) under which equity securities were authorized for issuance.Item 13. Certain Relationships and Related Transactions, and Director IndependenceOn May 2, 2018, we issued 2,875,000 Class B ordinary shares to our sponsor in exchange for a capital contribution of $25,000. On September 7, 2018, we effected a share capitalization resulting in the sponsor holding an aggregate of 10,937,500 founder shares. On September 10, 2018, the sponsor transferred 45,000, 45,000, 52,500 and 52,500 founder shares to each of Antonio F. Fernandez, Matthew M. Mannelly, William D. Toler and Craig D. Steeneck, respectively. On October 4, 2018, we effected a share capitalization resulting in an aggregate of 12,375,000 founder shares. On October 10, 2018, the underwriters partially exercised the over-allotment option, and an aggregate of 500,000 founder shares were subsequently surrendered to us by our sponsor for no consideration on October 19, 2018. Of the 11,875,000 shares outstanding as of December 31, 2018, our sponsor owned an aggregate of 11,680,000 Class B ordinary shares and the independent director owned an aggregate of 195,000 Class B ordinary shares. The total number of Class B ordinary shares outstanding equals 20% of the sum of the total number of Class A ordinary shares and Class B ordinary shares outstanding plus the number of Class A ordinary shares to be sold pursuant to the forward purchase agreements. The Class B ordinary shares will automatically convert into Class A ordinary shares concurrently with or immediately following the consummation of our initial business combination, or earlier at the option of the holder thereof, on a one-for-one basis, subject to adjustment.71Our sponsor purchased an aggregate of 7,200,000 private placement warrants, each exercisable to purchase one ordinary share at $11.50 per share, at a price of $1.50 per warrant ($10,800,000 in the aggregate), in a private placement that closed simultaneously with the closing of our initial public offering. Each private placement warrant entitles the holder to purchase one ordinary share at $11.50 per share. The private placement warrants (including the Class A ordinary shares issuable upon exercise of the private placement warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold until 30 days after the completion of our initial business combination.Our sponsor and our independent directors have agreed to make an aggregate investment of $35,000,000 in us at the time of our initial business combination. We entered into forward purchase agreements with our sponsor and our independent directors which provide for the purchase of an aggregate of 3,500,000 Class A ordinary shares, plus an aggregate of 1,166,666 redeemable warrants to purchase one Class A ordinary share at $11.50 per share, for an aggregate purchase price of $35,000,000, or $10.00 per Class A ordinary share, in a private placement to close concurrently with the closing of our initial business combination. Our sponsor, Antonio F. Fernandez, Matthew M. Mannelly, William D. Toler and Craig D. Steeneck agreed to purchase, individually or through entities owned and/or controlled by them, 3,000,000, 100,000, 100,000, 150,000 and 150,000 Class A ordinary shares, respectively (or a price of $30.0 million, $1.0 million, $1.0 million, $1.5 million and $1.5 million respectively). Our founders Chinh E. Chu, Roger K. Deromedi and Jason K. Giordano are the managers of our sponsor and share voting and investment discretion over any securities owned by our sponsor. Each of our founders, individually or through entities controlled by them, is a member of our sponsor, together with certain individuals with longstanding relationships with our founders.We currently maintain our executive offices at 200 Park Avenue, 58th Floor, New York, New York 10166. The cost for our use of this space is included in the $10,000 per month fee we pay to an affiliate of our sponsor for office space, administrative and support services, commencing on the closing of initial public offering. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees.Other than these monthly fees, no compensation of any kind, including finder’s and consulting fees, is paid by the company to our sponsor, executive officers and directors, or any of their respective affiliates, for services rendered prior to or in connection with the completion of an initial business combination. However, these individuals are reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee reviews on a quarterly basis all payments that were made to our sponsor, officers, directors or our or their affiliates.In order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required on a non-interest basis. If we complete an initial business combination, we would repay such loaned amounts from funds in the trust account. In the event that the initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such loans may be converted into warrants of the post business combination entity at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants. Except as set forth above, the terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.72After our initial business combination, members of our management team who remain with us may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed to our shareholders, to the extent then known, in the proxy solicitation or tender offer materials, as applicable, furnished to our shareholders. It is unlikely the amount of such compensation will be known at the time of distribution of such tender offer materials or at the time of a shareholder meeting held to consider our initial business combination, as applicable, as it will be up to the directors of the post-combination business to determine executive and director compensation.Policy for Approval of Related Party TransactionsThe audit committee of our board of directors operates pursuant to a charter, setting forth the policies and procedures for its review and approval or ratification of “related party transactions.” A “related party transaction” is any consummated or proposed transaction or series of similar transactions: (i) in which the company was or is to be a participant; (ii) the amount of which exceeds (or is reasonably expected to exceed) $120,000 in the aggregate over the duration of the transaction (without regard to profit or loss); and (iii) in which a “related party” had, has or will have a direct or indirect material interest. “Related parties” under this charter will include: (i) our directors or executive officers; (ii) any beneficial owner of more than 5% of any class of our voting securities; and (iii) any immediate family member of any of the foregoing.Pursuant to the charter, the audit committee will consider (i) the relevant facts and circumstances of each related party transaction, including if the transaction is on terms comparable to those that could be obtained in arms’-length dealings with an unrelated third party, (ii) the extent of the related party’s interest in the transaction, (iii) whether the transaction contravenes our code of ethics or other policies, (iv) whether the audit committee believes the relationship underlying the transaction to be in the best interests of the company and its shareholders and (v) the effect that the transaction may have on a director’s status as an independent member of the board and on his or her eligibility to serve on the board’s committees. Management will present to the audit committee each proposed related party transaction, including all relevant facts and circumstances relating thereto. Under the charter, we may consummate related party transactions only if our audit committee approves or ratifies the transaction in accordance with the guidelines set forth in the charter. The charter will not permit any director or executive officer to participate in the discussion of, or decision concerning, a related person transaction in which he or she is the related party.Director IndependenceAn “independent director” is defined generally as a person who has no material relationship with the listed company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the company). Our board of directors has determined that Messrs. Steeneck, Fernandez, Mannelly, and Toler are “independent directors” as defined in the NYSE listing standards and applicable SEC rules. Our independent directors have regularly scheduled meetings at which only independent directors are present.Item 14. Principal Accounting Fees and ServicesThe firm of WithumSmith+Brown, PC (“Withum”) acts as our independent registered public accounting firm. The following is a summary of fees paid WithumSmith+Brown, PC for services rendered.Audit FeesAudit fees consist of fees for professional services rendered for the audit of our year-end financial statements and services that are normally provided by Withum in connection with regulatory filings. The aggregate fees of Withum related to audit and review totaled approximately $80,000 for period from April 30, 2018 (inception) through December 31, 2018. The above amounts include services in connection with interim review procedures and audit services in connection with our initial public offering, as well as attendance at audit committee meetings.73Audit-Related FeesAudit-related fees consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our year-end financial statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute or regulation and consultation concerning financial accounting and reporting standards. During the period from April 30, 2018 (inception) through December 31, 2018, we did not pay Withum any audit-related fees.Tax FeesDuring the year ended December 31, 2018, we had no fees for tax services.All Other FeesDuring the year ended December 31, 2018, we had no fees for other services.Pre-Approval PolicyOur audit committee was formed upon the consummation of our Initial Public Offering. As a result, the audit committee did not pre-approve all of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by our board of directors. Since the formation of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve all auditing services and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject to thede minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit).74Item 15. Exhibits, Financial Statement Schedules(a)The following documents are filed as part of this Annual Report:(1)Financial Statements(2) ExhibitsWe hereby file as part of this Annual Report the exhibits listed in the attached Exhibit Index.101.INSXBRL Instance Document101.SCHXBRL Taxonomy Extension Schema 101.CALXBRL Taxonomy Extension Calculation Linkbase101.DEFXBRL Taxonomy Extension Definition Linkbase101.LABXBRL Taxonomy Extension Label Linkbase101.PREXBRL Taxonomy Extension Presentation Linkbase *Filed herewith.**These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.(1)Incorporated by reference to the registrant’s Current Report on Form 8-K, filed with the SEC on October 10, 2018.Item 16.Form 10-K SummaryNot applicable.75SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized. March 28, 2019COLLIER CREEK HOLDINGSBy:/s/ Jason K. GiordanoName:Jason K. GiordanoTitle: Co-Executive ChairmanPursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.NamePositionDate/s/ Roger K. DeromediRoger K. DeromediCo-Executive ChairmanMarch 28, 2019/s/ Jason K. GiordanoCo-Executive ChairmanJason K. Giordano(principal executive officer and principal financial and accounting officer)March 28, 2019/s/ Chinh E. ChuChinh E. ChuVice ChairmanMarch 28, 2019/s/ Antonio F. FernandezAntonio F. FernandezDirectorMarch 28, 2019/s/ Matthew M. MannellyMatthew M. MannellyDirectorMarch 28, 2019/s/ Craig D. SteeneckCraig D. SteeneckDirectorMarch 28, 2019/s/ William D. TolerWilliam D. TolerDirectorMarch 28, 201976COLLIER CREEK HOLDINGSINDEX TO FINANCIAL STATEMENTSF-1Report of Independent Registered Public Accounting FirmTo the Shareholders and the Board of Directors ofCollier Creek HoldingsOpinion on the Financial StatementsWe have audited the accompanying balance sheet of Collier Creek Holdings (the “Company”) as of December 31, 2018, the related statements of operations, changes in shareholders’ equity and cash flows, for the period from April 30, 2018 (inception) through December 31, 2018, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018, and the results of its operations and its cash flows for the period from April 30, 2018 (inception) through December 31, 2018, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, we express no such opinion.Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion./s/ WithumSmith+Brown, PCWe have served as the Company’s auditor since 2018.New York, New YorkMarch 28, 2019F-2BALANCE SHEETDECEMBER 31, 2018Assets: Current assets: Cash $ 944,890 Prepaid expenses 321,529 Total current assets 1,266,419 Cash and marketable securities held in Trust Account 442,048,296 Total assets $ 443,314,715 Liabilities and Shareholders' Equity: Current liabilities: Accounts payable $ 115,112 Accrued expenses 7,500 Accrued expenses - related parties 26,774 Total current liabilities 149,386 Deferred underwriting commissions and legal fees 15,450,000 Total liabilities 15,599,386 Commitments Class A ordinary shares, $0.0001 par value; 42,061,226 shares subject to possible redemption at $10.05 per share 422,715,321 Shareholders' Equity: Preferred shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding - Class A ordinary shares, $0.0001 par value; 400,000,000 shares authorized; 1,938,774 shares issued and outstanding (excluding 42,061,226 shares subject to possible redemption) 194 Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 11,875,000 shares issued and outstanding 1,188 Additional paid-in capital 3,087,484 Retained earnings 1,911,142 Total shareholders' equity 5,000,008 Total Liabilities and Shareholders' Equity $ 443,314,715 The accompanying notes are an integral part of these financial statements.F-3STATEMENT OF OPERATIONS For The Period From April 30, 2018 (inception) through December 31, 2018 General and administrative expenses $ 137,154 Loss from operations (137,154 ) Investment income on Trust Account 2,048,296 Net income $ 1,911,142 Weighted average shares outstanding of Class A ordinary shares 44,000,000 Basic and diluted net income per share, Class A $ 0.05 Weighted average shares outstanding of Class B ordinary shares 11,875,000 Basic and diluted net loss per share, Class B $ (0.01 ) The accompanying notes are an integral part of these financial statements.F-4STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITYFOR THE PERIOD FROM APRIL 30, 2018 (INCEPTION) through DECEMBER 31, 2018 Ordinary Shares Total Class A Class B Additional Paid-In Retained Shareholders' Shares Amount Shares Amount Capital Earnings Equity Balance - April 30, 2018 (inception) - $ - - $ - $ - $ - $ - Issuance of Class B ordinary shares to Sponsor - - 12,375,000 1,238 23,762 - 25,000 Sale of units in initial public offering 44,000,000 4,400 - - 439,995,600 - 440,000,000 Offering costs - - - - (25,020,813 ) - (25,020,813 ) - - - - 10,800,000 - 10,800,000 Forfeiture of Class B ordinary shares - - (500,000 ) (50 ) 50 - - (42,061,226 ) (4,206 ) - - (422,711,115 ) - (422,715,321 ) Net income - - - - - 1,911,142 1,911,142 Balance - December 31, 2018 1,938,774 $ 194 11,875,000 $ 1,188 $ 3,087,484 $ 1,911,142 $ 5,000,008 The accompanying notes are an integral part of these financial statements.F-5STATEMENT OF CASH FLOWSFOR THE PERIOD FROM APRIL 30, 2018 (INCEPTION) through december 31, 2018Cash Flows from Operating Activities: Net income $ 1,911,142 Adjustments to reconcile net income to net cash used in operating activities: General and administrative expenses paid by related parties 5,000 Interest income held in Trust Account (2,048,296 ) Changes in operating assets and liabilities: Prepaid expenses (321,529 ) Accounts payable 30,112 Accrued expenses 7,500 Accrued expenses - related parties 26,774 Net cash used in operating activities (389,297 ) Cash Flows from Investing Activities Cash deposited in Trust Account (440,000,000 ) Net cash used in investing activities (440,000,000 ) Cash Flows from Financing Activities: Proceeds from issuance of Class B ordinary shares to Sponsor 25,000 Proceeds received from note payable to related parties 150,000 Repayment of note payable and general and administrative expenses paid by related parties (155,000 ) Proceeds received from initial public offering 440,000,000 Proceeds received from private placement 10,800,000 Payment of offering costs (9,485,813 ) Net cash provided by financing activities 441,334,187 Net increase in cash 944,890 Cash - beginning of the period - Cash - end of the period $ 944,890 Supplemental disclosure of noncash activities: Offering costs included in accounts payable $ 85,000 Deferred legal fees and underwriting commissions in connection with the initial public offering $ 15,450,000 Value of Class A ordinary shares subject to possible redemption $ 422,715,321 The accompanying notes are an integral part of these financial statements.F-6NOTES TO FINANCIAL STATEMENTSNOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONSCollier Creek Holdings (the “Company”) is a blank check company incorporated in the Cayman Islands on April 30, 2018. The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses that the Company has not yet identified (a “Business Combination”). Although the Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination, the Company focuses on the consumer goods industry and related sectors. The Company’s sponsor is Collier Creek Partners LLC, a Delaware limited liability company (the “Sponsor”).All activity for the period from April 30, 2018 (inception) through December 31, 2018 relates to the Company’s formation, its initial public offering (the “Initial Public Offering”), which is described below, and its search for a Business Combination target. The Company has selected December 31 as its fiscal year end.The registration statement for the Initial Public Offering was declared effective on October 4, 2018. On October 10, 2018, the Company consummated the Initial Public Offering of 44,000,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units being offered, the “Public Shares”), including the issuance of 4,000,000 Units as a result of the underwriters’ partial exercise of their over-allotment option, at $10.00 per Unit, generating gross proceeds of $440 million, and incurring offering costs of approximately $25.02 million, inclusive of $15.45 million in deferred legal fees and underwriting commissions (Note 5).Simultaneously with the closing of the Initial Public Offering, the Company consummated the private placement (the “Private Placement”) of 7,200,000 warrants (the “Private Placement Warrants”) at a price of $1.50 per warrant to the Sponsor, generating gross proceeds of $10.8 million (Note 4).Upon the closing of the Initial Public Offering and the Private Placement, $440 million ($10.00 per Unit) of the net proceeds of the sale of the Units in the Initial Public Offering and the Private Placement was placed in a trust account (the “Trust Account”) and was invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of paragraphs (c)(2), (c)(3) and (c)(4) of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described below.The Company’s management has broad discretion with respect to the specific application of the net proceeds of its Initial Public Offering and Private Placement, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The Company’s initial Business Combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the Trust Account (net of amounts disbursed to management for working capital purposes and excluding the amount of any deferred underwriting discount held in trust) at the time the Company signs a definitive agreement in connection with the initial Business Combination. However, the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act.F-7COLLIER CREEK HOLDINGSNOTES TO FINANCIAL STATEMENTSThe Company will provide its shareholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially approximately $10.00 per share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). The per-share amount to be distributed to public shareholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 5). These Public Shares subject to potential redemption were recorded at a redemption value and classified as temporary equity, in accordance with Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” In such case, the Company will proceed with a Business Combination if (i) the Company has net tangible assets of at least $5,000,001 upon such consummation of such Business Combination and meets any additional requirements (including but not limited to cash requirements) agreed to in connection with such Business Combination and (ii) a majority of the shares voted are voted in favor of the Business Combination. If a shareholder vote is not required by the law and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its second amended and restated memorandum and articles of association (the “Second Amended and Restated Memorandum and Articles of Association”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (the “SEC”), and file tender offer documents with the SEC prior to completing a Business Combination. If, however, a shareholder approval of the transactions is required by law, or the Company decides to obtain shareholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Additionally, each public shareholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction. If the Company seeks shareholder approval in connection with a Business Combination, the Initial Shareholders (as defined below) agreed to vote their Founder Shares (as defined in Note 4) and any Public Shares purchased during or after the Initial Public Offering in favor of a Business Combination. In addition, the Initial Shareholders agreed to waive their redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of a Business Combination.Notwithstanding the foregoing, the Company’s Second Amended and Restated Memorandum and Articles of Association provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”"Exchange Act")), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares without the prior consent of the Company.The Company’s Sponsor, officers and directors (the “Initial Shareholders”) agreed not to propose an amendment to the Company’s Second Amended and Restated Memorandum and Articles of Association to modify the substance or timing of the Company’s obligation to provide for the redemption of its Public Shares in connection with a Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination, unless the Company provides the public shareholders with the opportunity to redeem their Class A ordinary shares in conjunction with any such amendment.If the Company is unable to complete a Business Combination within 24 months from the closing of the Initial Public Offering (the “Combination Period”), the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than five business days thereafter, redeem 100% of the outstanding Public Shares which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the Company’s board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution of the Company, subject in each case to its obligations to provide for claims of creditors and the requirements of applicable law.F-8COLLIER CREEK HOLDINGSNOTES TO FINANCIAL STATEMENTSIn connection with the redemption of 100% of the Company’s outstanding Public Shares for a portion of the funds held in the Trust Account, each holder will receive a full pro rata portion of the amount then in the Trust Account, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay the Company’s taxes (less taxes payable and up to $100,000 of interest to pay dissolution expenses). The Initial Shareholders agreed to waive their liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Initial Shareholders should acquire Public Shares in or after the Initial Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination within the Combination Period. The underwriters agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within in the Combination Period and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of Public Shares. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be only $10.00 per share initially held in the Trust Account, or less due to reductions in the value of the Trust Account Assets. In order to protect the amounts held in the Trust Account, the Sponsor agreed that it will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per Public Share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.LiquidityAs indicated in the accompanying financial statements, at December 31, 2018, the Company had approximately $945,000 in cash and working capital of approximately $1.1 million. The Company’s liquidity needs prior to and for the initial public offering were satisfied through receipt of a $25,000 capital contribution from the Sponsor in exchange for the issuance of the Founder Shares (as defined below), to the Sponsor and $155,000 in loans available from the Sponsor under a promissory note, and the net proceeds from the consummation of the Private Placement. The Company fully repaid the promissory note on October 17, 2018, after the closing of the Initial Public Offering.Based on the foregoing, management believes that the Company will have sufficient working capital to meet the Company's needs for the next twelve months from the report date. Over this time period, the Company will be using these funds for paying existing accounts payable, identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the business combination.NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of presentationThe accompanying balance sheet is presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC.Emerging Growth CompanyThe Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.F-9COLLIER CREEK HOLDINGSNOTES TO FINANCIAL STATEMENTSFurther, section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company hashad elected not to opt out of such extended transition period which means that when a standard iswas issued or revised and it has different application dates for public or private companies, the Company, when it was as an emerging growth company, cancould adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neithereither not an emerging growth company noror is an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accountantaccounting standards used.Use68Reclassification – Certain prior year amounts have been reclassified for consistency with the current year presentation. In our Consolidated Statements of estimatespreparationreclassification had no impact on total operating costs, earnings from operations, net earnings, earnings per share or total equity.Prior Period Revision - Statement of Cash Flows – For the fiscal year ended December 31, 2023, the Company disclosed the borrowings of lines of credit and repayments of lines of credit as separate line items within the financing activities section of the financial statementsConsolidated Statement of Cash Flows. The Company has corrected these line items for the fiscal years ended January 1, 2023 and January 2, 2022 for comparability purposes and deems the change to those periods to be immaterial.Operations – The Company has been a premier producer, marketer and distributor of snack food products since 1921. The Company has steadily expanded its distribution channels to where it now sells products to supermarkets, mass merchants, club stores, dollar and discount stores, convenience stores, independent grocery stores, drug stores, food service, vending, military, and other channels in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the datemost regions of the United States through routes to market, that include direct-store-delivery (“DSD”), direct to warehouse, and third-party distributors. The Company manufactures and distributes a full line of high-quality salty snack items, such as potato chips, tortilla chips, pretzels, cheese balls, pork skins, party mixes, and popcorn. The Company also sells dips, crackers, dried meat products and other snack food items packaged by other manufacturers.Segment Reporting – The Company operates in one reportable segment: the manufacturing, distribution, marketing and sale of snack food products. The Company defines reporting segments as components of an organization for which discrete financial statements.Making estimates requires managementinformation is available and operating results are evaluated on a regular basis by the chief operating decision maker ("CODM”) in order to exercise significant judgment. Itassess performance and allocate resources. The CODM is at least reasonably possiblethe Chief Executive Officer of the Company. Characteristics of the organization which were relied upon in making the determination that the Company operates in one reportable segment include the similar nature of all of the products that the Company sells, the functional alignment of the Company’s organizational structure, and the reports that are regularly reviewed by the CODM for the purpose of assessing performance and allocating resources.Cash and Cash Equivalents – The Company considers all highly-liquid investments purchased with an original maturity of three months or less to be cash equivalents. The majority of the Company’s cash is held in financial institutions with insurance provided by the Federal Deposit Insurance Corporation ("FDIC”) of $250,000 per depositor. At various times, account balances may exceed federally insured limits.Accounts Receivables – Accounts receivable are reported at net realizable value. The net realizable value is based on Company management’s estimate of the effectamount of receivables that will be collected based on analysis of historical data and trends, as well as review of significant customer accounts. Accounts receivable are considered to be past due when payments are not received within the customer’s credit terms. The Company's methodology to measure the provision for credit losses requires an estimation of loss rates based upon historical loss experience adjusted for factors that are relevant to determining the expected collectability of accounts receivable. Some of these factors include current market conditions, delinquency trends, aging behavior of receivables, and customer classes or individual customers as well as expectations of future credit losses and the customers ability to pay.The Company's estimates are reviewed and revised periodically based on the ongoing evaluation of credit quality indicators. Historically, actual write-offs for uncollectible accounts have not significantly differed from prior estimates. The Company's bad debt expense was $1.2 million and $0.9 million for the fiscal years ended December 31, 2023 and January 1, 2023, respectively.Inventories – Inventories are stated at the lower of cost (based on a method that approximates first-in, first-out or weighted average) or net realizable value. Inventory write-downs are recorded for shrinkage, damaged, stale and slow-moving items.Property, Plant and Equipment – Property, plant and equipment are stated at cost net of accumulated depreciation. Major additions and betterments are recorded to the asset accounts, while maintenance and repairs, which do not improve or extend the lives of the assets, are charged to expense accounts as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in operations in the disposal period. Depreciation is determined utilizing the straight-line method over the estimated useful lives of the various assets, which generally range from 2 to 20 years for machinery and equipment, 3 to 10 years for transportation equipment and 8 to 40 years for buildings. Assets held for sale are reported at the lower of the carrying amount or fair value less costs to sell. The Company assesses for impairment on property, plant and equipment upon the occurrence of a condition, situation or settriggering event.69Hosting arrangements –Certain of circumstancesour service contracts have been deemed to be hosting arrangements. Certain costs incurred for the implementation of a hosting arrangement that existed atis a service contract are capitalized and amortized on a straight–line basis over the dateterm of the financial statements, which management consideredrespective contract. Amortization begins for each component of the hosting arrangement when the component becomes ready for its intended use. Capitalized implementation costs are presented in formulating its estimate, could changeOther assets of the Consolidated Balance Sheets. Amortization expense of the capitalized implementation costs is presented in Administrative in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.Offering costsThe Company complies with the requirementsConsolidated Statements of the FASB ASC 340-10-S9901 and SEC Staff Accounting Bulletin Topic 5AOperations.Income Taxes – “Expenses of Offerings.” Offering costs, consisting of legal, accounting, underwriting fees and other costs directly related to the Initial Public Offering, were charged to additional paid-in capital upon the completion of the Initial Public Offering.Class A ordinary shares subject to possible redemptionits Class A ordinary shares subjectincome taxes pursuant to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Conditionally redeemable Class A ordinary shares (including Class A ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, Class A ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, at December 31, 2018, 42,061,226 Class A ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet.Net Income per ShareNet income per share is computed by dividing net income by the weighted-average number of ordinary shares outstanding during the periods. The Company has not considered the effect of the warrants sold in the initial Public Offering and Private Placement to purchase an aggregate of 21,866,667 shares of the Company’s Class ordinary shares in the calculation of diluted income per share, since their inclusion would be anti-dilutive under the treasury stock method.The Company��s statement of operations includes a presentation of income per share for ordinary shares subject to redemption in a manner similar to the two-class method of income per share. Net income per share, basic and diluted for Class A ordinary shares is calculated by dividing the interest income earned on the Trust Account, by the weighted average number of Class A ordinary shares outstanding since the initial issuance. Net income per share, basic and diluted for Class B ordinary shares is calculated by dividing the net income, less income attributable to Public Shares, by the weighted average number of Class B ordinary shares outstanding for the period.F-10COLLIER CREEK HOLDINGSNOTES TO FINANCIAL STATEMENTSIncome taxesThe Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset and liability approachmethod of Accounting Standards Codification (“ASC”) 740, Income Taxes, which requires it to financial accountingrecognize current tax liabilities or receivables for the amount of taxes it estimates are payable or refundable for the current year, and reporting for income taxes. Deferred incomedeferred tax assets and liabilities are computed for the expected future tax consequences attributable to temporary differences between the financial statementsstatement carrying amounts and their respective tax bases of assets and liabilities that will result in future taxable or deductible amounts, based onand the expected benefits of net operating loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax laws and rates applicableexpected to apply to taxable income in the periodsyears in which thethose temporary differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reducebe recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period enacted. A valuation allowance is provided when it is more likely than not that a portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the reversal of deferred tax liabilities during the period in which related temporary differences become deductible.The Company follows the provisions of ASC 740-10 related to the amount expected to be realized.Topic 740740-10 prescribes a recognition threshold and a measurement attributecomprehensive model for the financial statement recognition, measurement, presentation and measurementdisclosure of uncertain tax positions taken or expected to be taken in income tax returns.The benefit of tax positions taken or expected to be taken in the Company’s income tax returns is recognized in the financial statements if such positions are more likely than not of being sustained upon examination by taxing authorities. Differences between tax positions taken or expected to be taken in a tax return. For those benefitsreturn and the benefit recognized and measured pursuant to bethe interpretation are referred to as "unrecognized benefits.” A liability is recognized (or amount of net operating loss carryover or amount of tax refundable is reduced) for an unrecognized tax benefit because it represents an enterprise’s potential future obligation to the taxing authority for a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company’s management determined that was not recognized as a result of applying the Cayman Islands is the Company’s only major tax jurisdiction. The Company recognizes accrued interestprovisions of ASC 740-10. Interest costs and related penalties related to unrecognized tax benefits are required to be calculated, if applicable. The Company’s policy is to classify assessments, if any, for tax related interest as income tax expense. There wereinterest expense and penalties as selling, distribution, general and administrative expenses ("SD&A"). As of December 31, 2023 and January 1, 2023, no liability for unrecognized tax benefits was required to be reported. The Company does not expect any significant changes in its unrecognized tax benefits in the next fiscal year.Distribution Route Acquisition and no amounts accrued for interestSale Transactions – The Company acquires and penaltiessells distribution routes as a part of the Company’s maintenance of its DSD network. As new independent operators ("IOs”) are identified, the Company either sells its newly-created or existing Company-managed routes to IOs or sells routes that were previously acquired by the Company to IOs. Gain/loss from the sale of a distribution route is recorded upon the completion of the sale transaction, and is calculated based on the difference between the sale price of the distribution route and the asset carrying value of the distribution route as of December 31, 2018.the date of sale. The Company is currently not awarerecords intangible assets for distribution routes that it purchases based on the payment that the Company makes to acquire the route, and records the purchased distribution routes as indefinite-lived intangible assets under Financial Accounting Standards Board ("FASB") ASC 350, Intangibles – Goodwill and Other. The indefinite lived intangible assets are subject to annual impairment testing.Goodwill and Other Identifiable Intangible Assets – The Company allocates the cost of any issues underacquired companies to the identifiable tangible and intangible assets acquired and liabilities assumed, with the remaining amount classified as goodwill. The identification and valuation of these intangible assets and the determination of the estimated useful lives at the time of acquisition, as well as the completion of impairment tests, require significant management judgments and estimates. These estimates are made based on, among other factors, review thatof projected future operating results and business plans, economic projections, anticipated highest and best use of future cash flows and the cost of capital. The use of alternative estimates and assumptions could increase or decrease the estimated fair value of goodwill and other intangible assets, and potentially result in a different impact to the Company’s results of operations. Further, changes in business strategy and/or market conditions may significantly impact these judgments and thereby impact the fair value of these assets, which could result in significant payments, accruals or material deviation from its position.There is currently no taxation imposed on income by the Governmentan impairment of the Cayman Islands. goodwill or intangible assets.Finite-lived intangible assets consist of distribution/customer relationships, technology, certain master distribution rights and certain trademarks. These assets are being amortized over their estimated useful lives. Finite-lived intangible assets are tested for impairment only when management has determined that potential impairment indicators are present.70Goodwill and other indefinite-lived intangible assets (including certain trademarks, trade names, certain master distribution rights and Company-owned sales routes) are not amortized but are tested for impairment at least annually and whenever events or circumstances change that indicate impairment may have occurred. The Company tests goodwill for impairment at the reporting unit level. The Company has identified the existing snack food operations as its sole reporting unit.In accordance with Cayman federal income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected inFASB Accounting Standards Update ("ASU”) No. 2017-04, Intangibles - Goodwill and Other ("Topic 350”): Simplifying the Company’s financial statements. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.Concentration of credit riskFinancial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal depository insurance coverage of $250,000. At December 31, 2018, the Company had not experienced losses on this account and management believesTest for Goodwill Impairment, the Company is required to record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value.Topic 350, also permits an entity to first assess qualitative factors to determine whether it is necessary to perform quantitative impairment tests for goodwill and indefinite-lived intangibles. If an entity believes, as a result of each qualitative assessment, it is more likely than not exposed to significant risks on such account.Fairthat the fair value of goodwill or an indefinite-lived intangible asset exceeds its carrying value then a quantitative impairment test is not required.For the latest qualitative analysis performed, which took place on the first day of the fourth quarter of 2023, we had taken into consideration all the events and circumstances listed in Topic 350, in addition to other entity-specific factors that have taken place. Our fiscal year 2023 qualitative analysis concluded that Goodwill and our intangible assets were not impaired.Share-Based Compensation – Share-based compensation is rewarded to associates and directors of the Company and accounted for in accordance with ASC 718, Compensation—Stock Compensation ("ASC 718”). Share-based compensation expense is recognized for equity awards over the vesting period based on their grant-date fair value. The Company uses various forms of long-term incentives including, but not limited to, stock options, restricted stock units ("RSUs”) and performance share units ("PSUs”). The fair value of stock options is estimated at the date of grant using the Black-Scholes valuation model. The exercise price of each stock option equals or exceeds the estimated fair value of the Company’s stock price on the date of grant. Stock options can generally be exercised over a maximum term of ten years. The grant date fair value of the PSUs is determined using the Monte Carlo simulation model. The grant date fair value of the RSUs is determined using the Company’s closing trading price on the grant date. Share-based compensation expense is included within the same financial statement caption where the recipient’s other compensation is reported. The Company accounts for forfeitures as they occur.Fair Value of Financial Instruments – Financial instrumentsSelf-Insurance – The Company is primarily self-insured, up to certain limits, for employee group health claims. The Company purchases stop-loss insurance, which will reimburse the Company for individual and aggregate claims in excess of certain annual established limits. Operations are charged with the cost of claims reported and an estimate of claims incurred but not reported. Total health care expense under the program was $22.2 million for the fiscal year ended December 31, 2023, and $18.7 million for the fiscal year ended January 1, 2023, and $18.0 million for the fiscal year ended January 2, 2022 The reserve for unpaid claims, which includes an estimate of claims incurred but not reported, was $2.0 million and $1.6 million at December 31, 2023 and January 1, 2023, respectively.The Company is primarily self-insured through large deductible insurance plans for automobile, general liability and workers’ compensation. The Company has utilized a number of different insurance vehicles and programs for these insurable risks and recognizes expenses and reserves in accordance with the provisions of each insurance vehicle/program. The expense associated with automobile, general liability and workers’ compensation insurance programs totaled $11.1 million for the fiscal year ended December 31, 2023, $8.5 million for the fiscal year ended January 1, 2023, and $8.7 million for the fiscal year ended January 2, 2022. The Company also records reserves for unpaid claims and an estimate for claims incurred but not yet reported, including an estimate for the development of any such claim. As of December 31, 2023 and January 1, 2023, the Company had reserves totaling $4.1 million and $4.6 million, respectively, for these insurance programs.Shipping and Handling – The Company records shipping and handling expenses within selling expenses. Shipping and handling expenses for products shipped to customers totaled $45.0 million for the fiscal year ended December 31, 2023, $59.5 million for the fiscal year ended January 1, 2023, and $57.0 million for the fiscal year ended January 2, 2022.71Advertising Costs – Advertising costs are charged to operations when incurred. The Company had no significant direct response advertising. Advertising expenses totaled $12.3 million for the fiscal year ended December 31, 2023, $9.9 million for the fiscal year ended January 1, 2023, and $11.8 million for the fiscal year ended January 2, 2022. Cooperative advertising, primarily consisting of in-print advertising, point-of-sale displays, and in-store demos, totaled $29.8 million for the fiscal year ended December 31, 2023, $21.6 million for the fiscal year ended January 1, 2023, and $17.7 million for the fiscal year ended January 2, 2022.Employee Benefits – The Company maintains several contributory 401(k) retirement plans (the "Plans”) for its associates. Profit sharing contributions are made at the discretion of the Board of Directors and expenses recognized related to the profit sharing contribution was $5.5 million for the fiscal year ended December 31, 2023, $6.3 million for the fiscal year ended January 1, 2023, and $3.9 million for the fiscal year ended January 2, 2022. The Plans provide associates with matching contributions primarily at 20% of their contributions as defined in the Plans. The expense related to the matching contributions was $1.7 million for the fiscal year ended December 31, 2023, $1.4 million for the fiscal year ended January 1, 2023, and $1.9 million for the fiscal year ended January 2, 2022.Revenue Recognition – The Company’s revenues primarily consist of the sale of salty snack items to customers, including supermarkets, mass merchants, club stores, dollar and discount stores, convenience stores, independent grocery stores, drug stores, food service, vending, military, and other channels. The Company sells its products in most regions of the United States primarily through its DSD network, direct to warehouse shipments, and third-party distributors. These revenue contracts generally have a single performance obligation. Revenue, which includes shipping and handling charges billed to the customer, is reported net of variable consideration and consideration payable to customers, including applicable discounts, returns, allowances, trade promotion, consumer coupon redemption, unsaleable product, and other costs, some of which are recorded in Selling and distribution. Amounts billed and due from customers are classified as accounts receivables and require payment on a short-term basis and, therefore, the Company does not have any significant financing components.The Company recognizes revenue when (or as) performance obligations are satisfied by transferring control of the goods to customers. Control is transferred upon delivery of the goods to the customer. Shipping and/or handling costs that occur before the customer obtains control of the goods are deemed to be fulfillment activities and are accounted for as fulfillment costs. Applicable shipping and handling are included in customer billing and are recorded as revenue as the products’ control is transferred to customers. The Company assesses the goods promised in customer purchase orders and identifies a performance obligation for each promise to transfer a good that is distinct.The Company offers various forms of trade promotions and the methodologies for determining these provisions are dependent on local customer pricing and promotional practices, which range from contractually fixed percentage price reductions to provisions based on actual occurrence or performance. The Company’s promotional activities are conducted either through the retail trade or directly with consumers and include activities such as in store displays and events, feature price discounts, consumer coupons, and loyalty programs. The costs of these activities are recognized at the time the related revenue is recorded, which normally precedes the actual cash expenditure. The recognition of these costs therefore requires management judgment regarding the volume of promotional offers that will be redeemed by either the retail trade customer or consumer. These estimates are made using various techniques including historical data on performance of similar promotional programs. The Company has reserves in place of $17.4 million as of December 31, 2023, which include adjustments taken by customers of $6.2 million that are awaiting final processing and reserves of $46.3 million as of January 1, 2023, which include adjustments taken by customers of $32.8 million that are awaiting final processing. Differences between estimated expense and actual redemptions are recognized as a change in management estimate as actual redemptions are incurred.Customer Concentrations –One customer provided in excess of 10% of the Company's net sales during the fiscal years ended December 31, 2023, January 1, 2023 and January 2, 2022 in the amount of 13%, 12% and 15%, respectively. In addition, one customer provided in excess of 10% of the Company's accounts receivable at January 1, 2023 and January 2, 2022 in the amount of 11% and 10%, respectively. No customer provided greater than 10% of the Company's accounts receivable at December 31, 2023.Business Combinations – The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen is met, the transaction is accounted for as an asset acquisition. If the screen is not met, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs which would meet the definition of a business. Significant judgment is required in the application of the screen test to determine whether an acquisition is accounted for as business combination or an acquisition of assets.72The Company uses the acquisition method of accounting for acquired businesses. Under the acquisition method, the Company’s financial statements reflect the operations of an acquired business starting from the completion of the acquisition. The assets acquired and liabilities assumed are recorded at their respective estimated fair values at the date of the acquisition. Any excess of the purchase price over the estimated fair values of the identifiable net assets acquired is recorded as goodwill.Distributor Buyouts - During the fiscal years ended December 31, 2023 and January 1, 2023 2022, the Company bought out and terminated the contracts of multiple third-party distributors who had previously been providing services to the Company. These transactions, which were accounted for as contract terminations and asset purchases, resulted in expense of $1.5 million and $23.0 million for the fiscal years ended December 31, 2023 and January 1, 2023, respectively and are included within selling and distribution expenses on the Consolidated Statement of Operations and Comprehensive Income (Loss) for such period.Use of Estimates – Management uses estimates and assumptions in preparing the consolidated financial statements in accordance with U.S. GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, which qualify asthe disclosure of contingent assets and liabilities, and the reported revenues and expenses. Some examples, but not a comprehensive list, include sales and promotional allowances, customer returns, allowances for doubtful accounts, inventory valuations, useful lives of fixed assets and related impairment, long-term investments, hedge transactions, goodwill and intangible asset valuations and impairments, incentive compensation, income taxes, self-insurance, contingencies, litigation, and inputs used to calculate deferred tax liabilities, tax valuation allowances, and tax receivable agreements. Actual results could vary materially from the estimates that were used.Recently Issued Accounting Standards – In June 2016, the FASB issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments ("Topic 326"). Topic 326 requires entities to measure the impairment of certain financial instruments, under ASCincluding accounts receivables, notes receivables and off balance sheet notes receivables, based on expected losses rather than incurred losses. Topic 820, “Fair Value Measurements326 was effective for the Company beginning in fiscal year 2023. The adoption of this standard did not have a material effect on the Company’s consolidated financial statements or related disclosures.In December 2023, FASB issued ASU 2023-09, Income Taxes: Improvements to Income Tax Disclosures, to amend existing income tax disclosure guidance, primarily requiring more detailed disclosures for income taxes paid and Disclosures,” approximates the carrying amounts representedeffective tax rate reconciliation. The ASU is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted and can be applied on either a prospective or retroactive basis. The Company is currently evaluating the ASU to determine its impact on the Company's income tax disclosures.In November 2023, the FASB issued ASU 2023-07, Segment Reporting:Improvements to Reportable Segment Disclosures, to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. Among other changes, the amendments will require disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and should be applied on a retrospective basis. Early adoption is permitted. The Company is currently evaluating the ASU to determine its impact on the Company's disclosures.2.ACQUISITIONSVitner'sOn January 11, 2021, the Company announced that its subsidiary, UQF, entered into a definitive agreement with Snak-King Corp. to acquire certain assets of the C.J. Vitner business ("Vitner's acquisition" or the "acquisition of Vitner's"), a leading brand of salty snacks in the accompanyingChicago, Illinois area. The Company closed this transaction on February 8, 2021 and the purchase price of approximately $25.2 million was funded from current cash-on-hand. The fair values to which the purchase price was allocated were $2.9 million to trademarks, $0.8 million to customer relationships, $1.7 million to DSD routes, $1.9 million of other net assets, and $17.9 million to goodwill. The trademarks and customer relationships are being amortized over a period of 15 years. As of February 8, 2022, the purchase price allocation had been finalized.73Festida FoodsOn May 11, 2021, the Company announced that its subsidiary, UQF, entered into a definitive agreement with Great Lakes Festida Holdings, Inc. to acquire all assets including real estate located in Grand Rapids, Michigan related to the operations of Festida Foods ("Festida Foods acquisition" or the "acquisition of Festida Foods"), a manufacturer of tortilla chips, corn chips, and pellet snacks, and the largest manufacturer of tortilla chips for the Company's ON THE BORDER® brand. The Company closed this transaction on June 7, 2021 and the purchase price of approximately $40.3 million was funded in part from incremental financing on an existing term loan. The customer relationships are being amortized over a period of 10 years. As of June 7, 2022, the purchase price allocation had been finalized.The following table summarizes the fair values of the assets acquired and liabilities assumed by the Company for the acquisition of Festida Foods at the date of the acquisition:(in thousands) Purchase consideration $ 40,324 Assets acquired: Accounts receivable 2,776 Inventory 2,704 Prepaid expenses and other assets 182 Property, plant and equipment 24,650 Customer relationships 1,270 Total assets acquired: 31,582 Liabilities assumed: Accounts payable 2,017 Accrued expenses 844 Total liabilities assumed: 2,861 Net identifiable assets acquired 28,721 Goodwill $ 11,603 The customer relationships are being amortized over a period of 10 years.RW GarciaOn November 2, 2021, the Company announced that certain of its subsidiaries, entered into a definitive agreement to acquire the equity of R.W. Garcia Holdings, LLC and its wholly-owned subsidiary, R.W. Garcia Co., Inc. (together "RW Garcia"), an artisan maker of high-quality organic tortilla chips, crackers, and corn chips ("RW Garcia acquisition" or the “acquisition of RW Garcia”). The Company closed on this transaction on December 6, 2021, and the cash purchase price of approximately $57.9 million funded in part from a draw on the Company's line of credit and cash on hand. In addition to this acquisition on December 6, 2021, the Company closed on an acquisition of a manufacturing facility of which RW Garcia was a tenant. The cost of the manufacturing facility was approximately $6.0 million.Please see "Note 20. Subsequent Events" for the discussion of the disposition of RW Garcia by the Company in February 2024.74The following table summarizes the fair values of the assets acquired and liabilities assumed by the Company for the RW Garcia acquisition at the date of the acquisition:(in thousands) Purchase consideration $ 56,430 Tax consideration 1,458 Total consideration 57,888 Assets acquired: Cash 5,401 Accounts receivable 4,660 Inventory 5,674 Prepaid expenses and other assets 2,102 Property, plant and equipment 20,210 Trade name 3,100 Customer relationships 4,720 Total assets acquired: 45,867 Liabilities assumed: Accounts payable 6,017 Accrued expenses 1,838 Deferred tax liability 5,898 Total liabilities assumed: 13,753 Net identifiable assets acquired 32,114 Goodwill $ 25,774 The trade name and customer relationships are being amortized over a period of 15 years. The purchase price allocation was finalized prior to December 6, 2022.3.INVENTORIESInventories consisted of the following:(in thousands) As of
December 31, 2023As of January 1, 2023 Finished goods $ 65,673 $ 67,386 Raw materials 29,757 42,204 Maintenance parts 9,236 8,416 Total inventories $ 104,666 $ 118,006 754.PROPERTY, PLANT AND EQUIPMENT, NETProperty, plant and equipment, net, consisted of the following:(in thousands) As of
December 31, 2023As of January 1, 2023 Land $ 28,561 $ 30,582 Buildings 123,603 129,824 Machinery and equipment 248,886 255,505 Land improvements 3,887 3,756 Building improvements 5,163 3,709 Construction-in-progress 35,533 21,934 445,633 445,310 Less: accumulated depreciation (126,752) (100,112) Property, plant and equipment, net $ 318,881 $ 345,198 On April 28, 2022, certain of the Company's subsidiaries purchased a brand new, recently completed snack food manufacturing facility in Kings Mountain, North Carolina from Evans Food Group Ltd. d/b/a Benestar Brands and related affiliates. The total purchase price of the facility was approximately $38.4 million, plus assumed liabilities of $1.3 million. The Company paid the full cash purchase price of $38.4 million at the closing and concurrently with the facility purchase, the Company sold 2.1 million shares of the Company’s Class A Common Stock for $28.0 million, to affiliates of Benestar in a private placement pursuant to Section 4(a)(2) of the Securities Act of 1933.During the fiscal year ended January 1, 2023, the Company recorded impairments totaling $2.7 million related to property and equipment damaged in one of the Company's smaller manufacturing facilities by a natural disaster. During the fiscal year ended January 1, 2023, the Company received $3.9 million in insurance proceeds related to a partial settlement of damaged property and equipment, resulting in a gain during fiscal the year ended January 1, 2023 of $1.2 million. As a result of the damage to the facility the Company has had to shift production to other facilities as well as utilize a co-manufacturer which has resulted in additional production and distribution costs. In addition, during the fiscal year ended January 1, 2023, the Company received $6.0 million in proceeds related to a partial settlement of a business interruption insurance claim. During the fiscal year ended December 31, 2023, the Company received an additional $1.7 million in insurance proceeds related to the settlement of damaged property and equipment and additional $1.3 million related to the settlement of the business interruption insurance claim. The Company has recognized receipts of the business interruption insurance as a reduction of the cost of goods sold and the receipts related to the damage to property plant and equipment within the (loss) gain on sale of assets, net in the Company's Consolidated Statement of Operations and Comprehensive Income (Loss). The Company recognizes gains from insurance proceeds, at the earliest, after receipt of insurance proceeds. The Company intends to sell this facility and expects to dispose of the property within the next twelve months. As a result, the Company recorded additional impairments for the fiscal year ended December 31, 2023 totaling $1.9 million recorded to Administrative expenses on the Consolidated Statement of Operations and has reclassified this facility on its consolidated balance sheet to Assets held for sale in the amount of $1.6 million. The fair value of this facility was based upon prices of similar assets.During the fiscal year ended December 31, 2023, the Company recorded expenses of $8.9 million in connection with the closure of the Company's manufacturing facility in Birmingham, Alabama, which included $1.3 million in severance and related costs and $10.6 million of asset impairments related to fixed assets. The severance and related expenses are recorded in the cost of goods sold line on the Consolidated Statement of Operations and Comprehensive Income (Loss) for the fiscal year ended December 31, 2023. The fixed asset impairments are recorded in the administrative expenses line on the Consolidated Statement of Operations and Comprehensive Income (Loss). The Company has identified a potential buyer for this property and has reclassified this property to Assets held for sale on the consolidated balance sheet at December 31, 2023 in the amount of $6.0 million.76During the fiscal year ended December 31, 2023, the Company completed the sale of the Company's manufacturing facility in Bluffton, Indiana, which resulted in a loss on sale of the assets of $13.4 million. Also, in connection with the sale the Company recorded $4.7 million of expense related to the termination of a contract that was settled with the sale. Additionally, the Company entered into a supply agreement with the buyer pursuant to which the buyer is obligated to co-manufacture certain products at below market rates for up to one year. The Company recorded a tolling asset of $0.6 million for the difference between the rate charged and the market rate for these services. If the buyer defaults on its obligations to manufacture any of the committed products, a financial penalty will be assessed based on the contractual terms required in the supply agreement. In a separate transaction, the Company completed the sale of land in Hanover, Pennsylvania to a separate third-party for a gain of $4.0 million.Depreciation expense was $40.5 million for the fiscal year ended December 31, 2023, $47.8 million for the fiscal year ended January 1, 2023, and $43.1 million for the fiscal year ended January 2, 2022. Depreciation expense is classified in cost of goods sold, selling, distribution, and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income (loss).5.GOODWILL AND INTANGIBLE ASSETS, NETA roll forward of goodwill is as follows:(in thousands) Balance as of January 2, 2022 $ 915,438 RW Garcia acquisition adjustment (143) Balance as of January 1, 2023 915,295 Balance as of December 31, 2023 $ 915,295 Intangible assets, net, consisted of the following:(in thousands) As of December 31, 2023 As of January 1, 2023 Subject to amortization: Distributor/customer relationships $ 677,930 $ 677,930 Trademarks 63,850 63,850 Amortizable assets, gross 741,780 741,780 Accumulated amortization (120,405) (82,738) Amortizable assets, net 621,375 659,042 Not subject to amortization Trade names 434,513 434,513 IO routes 7,525 6,010 Intangible assets, net $ 1,063,413 $ 1,099,565 Previously, the Company was granted certain exclusive distribution rights for certain products manufactured by another manufacturer. During the fiscal year ended January 1, 2023, the Company shifted the relationship with that manufacturer and converted that shelf space to Company-branded products. As a result, the Company recorded impairment expense of $2.0 million and the amortizable master distribution rights decreased by $2.2 million. There were no other significant changes to intangible assets during the fiscal years ended December 31, 2023 and January 1, 2023, other than those which arise from the ordinary course of business related to the purchase and sale of Company-owned route assets and amortization.Amortization of the distributor/customer relationships, technology, and trademarks amounted to $37.7 million for the fiscal year ended December 31, 2023, $37.7 million for the fiscal year ended January 1, 2023, and $37.0 million for the fiscal year ended January 2, 2022. The expense related to the amortization of intangibles is classified in administrative expenses on the Consolidated Statements of Operations and Comprehensive Income (Loss).77Amortization expense is classified in administrative expenses on the consolidated statements of operations and comprehensive income (loss). Estimated future amortization expense is as follows:(in thousands) As of December 31, 2023 2024 $ 37,668 2025 37,668 2026 37,668 2027 37,668 2028 37,668 Thereafter 433,035 Total $ 621,375 6.NOTES RECEIVABLEThe Company has undertaken a program in recent years to sell Company-managed DSD distribution routes to IOs. Contracts are executed between the Company and the IOs for the sale of the product distribution route, including a note in favor of the Company, in certain cases. The notes bear interest at rates ranging from 0.00% to 10.40% with terms ranging generally from one to ten years. The notes receivable balances due from IOs at December 31, 2023 and January 1, 2023 totaled $17.6 million and $22.0 million, respectively, and are collateralized by the routes for which the loans are made. The Company has a corresponding notes payable liability, related to the IOs notes receivables, of $16.5 million and $21.1 million at December 31, 2023 and January 1, 2023, respectively. The related notes payable liability is discussed in further detail within Note 8. "Long-Term Debt."Other notes receivable totaled $0.1 million as of each of December 31, 2023 and January 1, 2023.7.ACCRUED EXPENSES AND OTHERCurrent accrued expenses and other consisted of the following:(in thousands) As of December 31, 2023 As of January 1, 2023 Accrued compensation and benefits $ 21,466 $ 38,974 Operating right of use liability 14,992 12,389 Insurance liabilities 6,811 6,701 Accrued freight and manufacturing related costs 4,424 10,817 Accrued dividends and distributions 7,972 7,989 Accrued interest 13,280 1,151 Other accrued expenses 8,645 13,991 Total accrued expenses and other $ 77,590 $ 92,012 Non-current accrued expenses and other consisted of the following:(in thousands) As of December 31, 2023 As of January 1, 2023 Operating right of use liability $ 43,928 $ 35,331 Tax Receivable Agreement liability 24,297 25,426 Supplemental retirement and salary continuation plans 6,559 6,512 Long-term portion of an interest rate hedge liability 1,936 — Total accrued expenses and other $ 76,720 $ 67,269 788.LONG-TERM DEBTRevolving Credit FacilityOn November 21, 2017, UBH entered into an asset based revolving credit facility (as amended, the "ABL facility") in an initial aggregate principal amount of $100.0 million. The ABL facility was set to expire on the fifth anniversary of closing, or November 21, 2022. On April 1, 2020, the ABL facility was amended to increase the credit limit up to $116.0 million and to extend the maturity through August 22, 2024. On December 18, 2020, the ABL facility was amended to further increase the credit limit up to $161.0 million. On September 22, 2022, the ABL facility was amended to further increase the credit limit up to $175.0 million, and replaced the interest rate benchmark from London Inter-Bank Rate ("LIBOR") to the Secured Overnight Financing Rate ("SOFR"). As of December 31, 2023 and January 1, 2023, $0.4 million and $0.0 million, respectively, were outstanding under this facility. Availability under the ABL facility is based on a monthly accounts receivable and inventory borrowing base certification, which is net of outstanding letters of credit and amounts borrowed. As of December 31, 2023 and January 1, 2023, $158.4 million and $163.0 million, respectively, was available for borrowing, net of letters of credit. The ABL facility is also subject to unused line fees (0.5% at both December 31, 2023 and January 1, 2023) and other fees and expenses. On July 20, 2023, the ABL facility was further amended to increase the credit limit to $225.0 million and extend the maturity through the earlier of July 20, 2028, or 91 days prior to the maturity of the Term Loan B (as defined below). The Company incurred fees of $0.7 million in connection with the amendment to the ABL facility.Standby letters of credit in the amount of $12.2 million and $12.0 million have been issued as of December 31, 2023 and January 1, 2023, respectively. The standby letters of credit are primarily issued for insurance purposes.Term LoansOn December 14, 2020, the Company entered into a Bridge Credit Agreement with a syndicate of banks, led by Bank of America, N.A. (the "Bridge Credit Agreement”). The proceeds of the Bridge Credit Agreement were used to fund the Company’s acquisition of Truco Holdco Inc. (“Truco”) and the IP Purchase (as defined below) from OTB Acquisition, LLC, in which the Company withdrew $490.0 million to finance the acquisition of Truco (such acquisition, the "Truco Acquisition") and certain intellectual property from OTB Acquisition, LLC (the "IP Purchase"). The Bridge Credit Agreement bore interest at an annual rate based on 4.25% plus 1-month LIBOR with scheduled incremental increases to the base rate, as defined in the Bridge Credit Agreement. The loan converts into an Extended Term Loan if the loan remains open 365 days after the closing date. As of January 3, 2021, the outstanding balance of the Bridge Credit Agreement was $370.0 million, with $120.0 million being repaid from the exercise of the Company's warrants. Commitment fees and deferred financing costs on the Bridge Credit Agreement totaled $7.2 million, of which $2.6 million remained on the books as of January 3, 2021. On January 20, 2021, the Bridge Credit Agreement was repaid in full by the refinancing of term debt. In connection with Amendment No. 2 (as defined below), and a $12.0 million repayment in the first quarter of 2021, the outstanding balance of $370.0 million was repaid in full and the Bridge Credit Agreement was terminated.On January 20, 2021, the Company entered into Amendment No. 2 to the Bridge Credit Agreement ("Amendment No. 2") which provided additional operating flexibility and revisions to certain restrictive covenants. Pursuant to the terms of Amendment No. 2, the Company raised $720.0 million in aggregate principal of Term Loan B ("Term Loan B") which bore interest at LIBOR plus 3.00%, and extended the maturity of the Bridge Credit Agreement to January 20, 2028. The proceeds were used, together with cash on hand and proceeds from our exercised warrants, to redeem the outstanding principal amount of existing Term Loan B and Bridge Credit Agreement of $410.0 million and $358.0 million, respectively. The refinancing was accounted for as an extinguishment. The Company incurred debt issuance costs and original issuance discounts of $8.4 million.On June 22, 2021, the Company entered into Amendment No. 3 to the Bridge Credit Agreement ("Amendment No. 3"). Pursuant to the terms of Amendment No. 3, the Company increased the principal balance of Term Loan B by $75.0 million to bring the aggregated balance of Term Loan B proceeds to $795.0 million. The Company incurred additional debt issuance costs and original issuance discounts of $0.7 million related to the incremental funding.On September 22, 2022, the Company entered into Amendment No. 4 to the Bridge Credit Agreement ("Amendment No. 4"), which replaced the interest rate benchmark from LIBOR to SOFR. The weighted average interest rate on the Term Loan B debt for the fiscal year ended December 31, 2023 and the fiscal year ended January 1, 2023 was 5.74% and 4.93%, respectively.79On October 12, 2022, the Company, through its subsidiaries UQF, Kennedy and Condor Snack Foods, LLC (together with UQF and Kennedy, the “Real Estate Financing Borrowers”), entered into a loan agreement (the “Real Estate Term Loan”) with City National Bank which was secured by a majority of the Real Estate Financing Borrowers’ real estate assets. The Real Estate Term Loan holds a principal balance of $88.1 million, with net proceeds of approximately $85.0 million after transaction fees and expenses. The Real Estate Term Loan has a ten-year maturity and amortizes approximately $3.5 million in principal annually, with a balloon payment due at maturity. The Company used a portion of the proceeds from the Real Estate Term Loan to their short-term nature.The Term Loan B and the ABL facility are collateralized by substantially all of the assets and liabilities of UBH and its subsidiaries excluding the real estate assets secured by the Real Estate Term Loan, including equity interests in certain of UBH’s subsidiaries. The credit agreements contain certain affirmative and negative covenants as to operations and the financial condition of UBH and its subsidiaries. UBH and its subsidiaries were in compliance with its financial covenants as of December 31, 2023.Long-term debt consisted of the following:Debt (in thousands)Issue Date Principal Balance Maturity Date December 31, 2023 January 1, 2023 Term loan B(1)June-21 $ 795,000 January-28 $ 771,335 $ 779,286 Real Estate Loan October-22 88,140 October-32 80,184 88,140 Equipment loans(2)56,482 54,053 ABL facility(3)October-27 368 — Net impact of debt issuance costs and original issue discounts (8,772) (9,672) Total long-term debt 899,597 911,807 Less: current portion (21,086) (18,472) Long term portion of term debt and financing obligations $ 878,511 $ 893,335 (1) On September 22, 2022, the Company entered into Amendment No. 4.(2) In July 2021, the Company entered into two separate finance lease obligations with Banc of America Leasing & Capital, LLC, which have been treated as secured borrowing. The Company has made the following draws upon these agreements: $26.5 million in fiscal year 2021, $32.4 million in fiscal year 2022, and $13.1 million in fiscal year 2023. These draws bear interest ranging from 3.26% through 7.25% and have varying maturities up through 2028.(3) The facility bore interest at an annual rate based on LIBOR, or SOFR plus a 0.10% credit spread adjustment after the amendment on September 22, 2022, plus an applicable margin of 1.50% (ranging from 1.50% to 2.00% based on availability) or the prime rate plus an applicable margin of 0.50% (ranging from 0.50% to 1.00%). The Company generally utilizes the prime rate for amounts that the Company expects to pay down within 30 days, the interest rate on the facility as of December 31, 2023 and January 1, 2023, was 9.25% and 8.25%, respectively, under the prime rate. The Company elected to use the LIBOR, prior to the amendment on September 22, 2022 which changed the reference rate to SOFR as described above, for balances that are expected to be carried longer than 30 days, the interest rate on the ABL facility as of December 31, 2023 was 7.19%.80As of December 31, 2023, the minimum debt repayments under term debt and financing obligations consisted of the following:(in thousands) 2024 $ 21,086 2025 21,401 2026 20,555 2027 18,018 2028 746,187 Thereafter 81,122 Total $ 908,369 Term loan B, the Revolving Credit Facility, and the equipment loans are debt of UBH and its’ subsidiaries. There are no material differences between the financial statements of UBI and its consolidated subsidiaries and the financial statements of UBH and its consolidated subsidiaries, except for the warrant liability and associated gain (loss) on remeasurement of warrant liability as described in "Note 17. "Warrants,” the Tax Receivable Agreement described in "Note 15. Income Taxes” and accrued dividends to shareholders which flow out of UBH.Other Notes Payable and Capital LeasesDuring the first fiscal quarter of 2022, the Company bought out and terminated the contracts of multiple distributors who had previously been providing services to the Company. These transactions were accounted for as contract terminations and asset purchases and resulted in expense of $23.0 million for the fiscal year ended January 1, 2023. The outstanding payable balance of these transactions was $0.5 million as of January 1, 2023.During the first fiscal quarter of 2020, the Company purchased intellectual property that included a deferred purchase price of $0.5 million, of which $0.2 million and $0.3 million was outstanding as of December 31, 2023 and January 1, 2023, respectively.Amounts outstanding under notes payable consisted of the following:(in thousands) As of
December 31, 2023As of January 1, 2023 Note payable – IO notes $ 16,478 $ 21,098 Finance lease obligations(1)10,145 10,995 Other 200 835 Total notes payable 26,823 32,928 Less: current portion (7,649) (12,589) Long term portion of notes payable $ 19,174 $ 20,339 (1) See “Note 16. Leases” for further discussion on our finance lease obligations.During fiscal year 2021, the Company sold $12.5 million of notes receivable from IOs for proceeds of $11.8 million in a series of transactions to a financial institution. During fiscal year 2022, the Company sold an additional $5.0 million of notes receivable from IOs for proceeds of $5.0 millionto a financial institution. During fiscal year 2023, the Company sold an additional $5.2 million of notes receivable from IOs for proceeds of $5.4 millionto a financial institution. Due to the structure of these transactions, they did not qualify for sale accounting treatment and the Company has recorded the notes payable obligation owed by the IOs to the financial institution on its books; the corresponding notes receivable also remained on the Company’s books. The Company services the loans for the financial institution by collecting principal and interest from the IOs and passing it through to the institution. The underlying notes have various maturity dates through June 2032. The Company partially guarantees the outstanding loans, as discussed in further detail within "Note 12. Contingencies”. These loans are collateralized by the routes for which the loans are made. Accordingly, the Company has the ability to recover substantially all of the outstanding loan value upon default.81Interest ExpenseInterest expense consisted of the following:(in thousands) For the Fiscal Year Ended December 31, 2023 For the Fiscal Year Ended January 1, 2023 For the Fiscal Year Ended January 2, 2022 Company’s ABL facility and other long-term debt $ 57,881 $ 41,231 $ 29,270 Amortization of deferred financing fees 1,556 1,933 3,847 IO loans 1,153 1,260 1,591 Total interest $ 60,590 $ 44,424 $ 34,708 9.DERIVATIVE FINANCIAL INSTRUMENTS AND PURCHASE COMMITMENTSDerivative Financial InstrumentsTo reduce the effect of interest rate fluctuations, on December 21, 2021, with an effective date of December 31, 2021, the Company entered into an accreting interest rate swap contract with a counter-party to make a series of payments based on a fixed interest rate of 1.39% and receive a series of payments based on the greater of LIBOR or 0.00%. Both the fixed and floating payment streams were based on a notional amount of $250 million and have accreted to $500 million and are maturing on September 30, 2026. Effective on September 30, 2022 the Company amended the swap contract to reference the 1-month SOFR plus a credit spread adjustment (“CSA”) of 11.448 basis points, as well as setting the new fixed rate to 1.41%; under this amended swap agreement the Company will receive a series of payments based on the greater of SOFR plus CSA, or 0.00%.On October 12, 2022, the Company entered into a 10-year swap contract, with an effective date of November 1, 2022, with a counter-party to make a series of payments based on a fixed interest rate of 3.83% and receive a series of payments based on the greater of the 1-month SOFR or 0.00%. The agreement covers $84.6 million as of December 31, 2023. This swap effectively fixes the rate of the Real Estate Term Loan to 5.93%. The balance that the hedge covers is designed to abate as principal payments on the Real Estate Term Loan are made. The Company entered into these transactions to reduce its exposure to changes in cash flows associated with the Real Estate Term Loan and has designated this derivative as a cash flow hedge. The Company assesses hedge effectiveness both at the onset of the hedge and at regular intervals throughout the life of the derivative instrument. If it is probable that the hedged forecasted transaction will not occur, the derivative instrument's gain or loss reported in accumulated other comprehensive income will be reclassified into earnings.As of December 31, 2023, the effective fixed interest rate on the long-term debt hedged by these contracts was 5.88%. For further treatment of the Company’s interest rate swap, refer to "Note 10. Fair Value MeasurementsFair valueMeasurements” and "Note 13. Accumulated Other Comprehensive Income.”82Warrant LiabilitiesThe Company has outstanding warrants which are accounted for as derivative liabilities pursuant to ASC 815-40. See Note 17. "Warrants" for additional information on our warrant liabilities. A reconciliation of the changes in the warrant liability during the fiscal year ended December 31, 2023 is defined as the price that would be receivedfollows:(in thousands) Fair value of warrant liabilities as of January 1, 2023 $ 45,504 Gain on remeasurement of warrant liability (2,232) Fair value of warrant liabilities as of December 31, 2023 $ 43,272 Purchase CommitmentsThe Company has outstanding purchase commitments for salespecific quantities at fixed prices for certain key ingredients to economically hedge commodity input prices. These purchase commitments totaled $66.7 million as of an asset or paidDecember 31, 2023 and $54.0 million as of January 1, 2023. The Company accrues for transfer oflosses on firm purchase commitments in a liability, in an orderly transaction between market participantsloss position at the measurement date. U.S. GAAPend of each reporting period to the extent that there is an active observable market. The Company has recorded purchase commitment (losses) gains totaling $(3.3) million for the fiscal year ended December 31, 2023, $0.0 million for the fiscal year ended January 1, 2023, and $1.0 million for the fiscal year ended January 2, 2022, respectively.10.FAIR VALUE MEASUREMENTSThe Company follows the guidance relating to fair value measurements and disclosures with respect to financial assets and liabilities that are re-measured and reported at fair value each reporting period, and with respect to non-financial assets and liabilities that are not required to be measured at fair value on a recurring basis. The guidance establishes a three-tier fair value hierarchy whichthat prioritizes the inputs to the valuation techniques used in measuringto measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements)I) and the lowest priority to unobservable pricing inputs (Level 3 measurements)III). These tiers include:·Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;·Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and·Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
A financial asset or liability’s level within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are described below:F-11Level I - Valuations are based on unadjusted quoted prices in active markets for identical, unrestricted assets or liabilities;COLLIER CREEK HOLDINGSNOTES TO FINANCIAL STATEMENTSLevel II - Valuations are based on quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active. Financial asset or liabilities which are included in this category are securities where all significant inputs are observable, either directly or indirectly; andLevel III - Prices or valuations that are unobservable and where there is little, if any, market activity for these financial assets or liabilities. The inputs into the determination of fair value inputs for these investments require significant management judgment or estimation. The availability of observable inputs can vary depending on the financial asset or liability and is affected by a wide variety of factors. To the extent that valuation is based on inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment.The fair values of the Company’s Level 2 derivative instruments were determined using valuation models that use market observable inputs including interest rate curves and both forward and spot prices for commodities. Derivative assets and liabilities included in Level 2 primarily represent commodity and interest rate swap contracts.83The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis based upon the level within the fair value hierarchy in which the fair value measurements fall, as of December 31, 2023:(in thousands) Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 52,023 $ — $ — $ 52,023 Commodity contracts — 211 — 211 Interest rate swaps — 33,332 — 33,332 Total assets $ 52,023 $ 33,543 $ — $ 85,566 Liabilities: Commodity contracts $ — $ 2,094 $ — $ 2,094 Interest rate swaps — 1,936 — 1,936 Private placement warrants — 43,272 — 43,272 Debt — 899,597 — 899,597 Total liabilities $ — $ 946,899 $ — $ 946,899 The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis based upon the level within the fair value hierarchy in which the fair value measurements fall, as of January 1, 2023: (in thousands) Level I Level II Level III Total Assets: Cash and cash equivalents $ 72,930 $ — $ — $ 72,930 Commodity contracts — 1,586 — 1,586 Interest rate swaps — 45,088 — 45,088 Total assets $ 72,930 $ 46,674 $ — $ 119,604 Liabilities: Private placement warrants — 45,504 — 45,504 Debt — 911,807 — 911,807 Total liabilities $ — $ 957,311 $ — $ 957,311 8411.SHARE-BASED COMPENSATIONFor the periods presented, compensation expense included primarily in selling, distribution, and administrative expense for all types of stock-based compensation programs and the related income tax benefit recognized were as follows:(in thousands) Fiscal Year Ended December 31, 2023 Fiscal Year Ended January 1, 2023 Fiscal Year Ended January 2, 2022 RSUs $ 9,705 $ 5,136 $ 8,574 PSUs 4,279 2,253 1,228 Stock Options 1,281 1,056 493 Pre-tax compensation expense $ 15,265 8,445 $ 10,295 Related income tax benefit (3,452) Impact to net income $ 4,993 The tax benefit recognized from the share-based compensation expense is nominal for the fiscal years ended December 31, 2023 and January 2, 2022 due to a valuation allowance.Unrecognized compensation expense related to nonvested share-based compensation grants was as follows:(in thousands) As of December 31, 2023 As of January 1, 2023 RSUs $ 7,372 $ 8,710 PSUs 6,800 7,791 Stock Options 819 1,945 Total $ 14,991 $ 18,446 Restricted and Performance Share Units2020 Long-term Incentive Plan ("LTIP") RSUsIn connection with the Business Combination, the Phantom Units issued under the Utz Quality Foods, LLC 2018 Long-Term Incentive Plan (the “2018 LTIP”) were converted into restricted stock units (the “2020 LTIP RSUs”) issued under Utz Quality Foods, LLC 2020 Long-Term Incentive Plan (the “2020 LTIP”), with each 2020 LTIP RSU vesting on December 31, 2021. Holders of 2020 LTIP RSUs were subject to substantially similar terms to the holders of phantom unit awards issued under the 2018 LTIP (the “2018 LTIP Phantom Units”), including requisite service period and vesting conditions. The conversion of the 2018 LTIP Phantom Units was accounted for as a modification under ASC 820, Fair Value Measurement718. The 2020 LTIP RSUs are equity-classified due to settlement being in shares.As a result of the Business Combination, the Company converted the Phantom Units under the 2018 LTIP into 2020 LTIP RSUs, which settled into 1,479,445 shares of Class A Common Stock. The fair value of the Phantom Units being replaced was approximately $11.2 million at the Closing, which was attributable to the pre-combination service period and Disclosures, requires all entities to disclosewas included in the purchase price of the Business Combination. The fair value of the 2020 LTIP RSUs at the Closing of the Business Combination in excess of the fair value of financial instruments, both assetsthe replaced Phantom Units attributable to the pre-combination period was approximately $13.9 million and liabilitiesis attributable to the post-combination requisite service period. All 2020 LTIP RSUs settled January 3, 2022.2020 Omnibus Equity Incentive PlanIn connection with the consummation of the Business Combination, the Company adopted, with stockholder approval, the Utz Brands, Inc. 2020 Omnibus Equity Incentive Plan (as amended, the “2020 Plan”), which provides our executive officers and other participating associates with equity-based, long-term incentives, including RSUs, PSUs and Stock Options.85Restricted Share UnitsUnder the 2020 Plan, the Company grants RSUs representing the right to receive one share of the Company’s Class A Common Stock upon vesting, provided that the recipient remains employed with the Company through the vesting and subject to certain forfeiture conditions and restrictions. The RSUs vest according to specific vesting conditions set forth in the RSU award agreements. RSUs that become vested also generally entitle the holder to be credited with dividend equivalent payments in cash, with such dividend equivalents payable when, and to the extent, the RSUs are settled (or such accrued dividend equivalents will be forfeited to the extent the RSUs are forfeited).Performance Share UnitsThe Company issues PSUs under the 2020 Plan, which provide the participant with the opportunity to earn shares of the Company’s Class A Common Stock if the Company achieves certain performance goals determined by the administrator of the 2020 Plan. All PSUs granted since the adoption of the 2020 Plan contain vesting based on the Company’s performance with respect to relative total stockholder return. The number of shares subject to the PSUs that vest and are settled at the end of each performance period is based on the Company’s cumulative total stockholder return relative to the total stockholder returns of members of a peer group, which is typically consistent with the peer group used for which itcompensation disclosures.At the end of the performance period, the Company’s total stockholder return position is practicableranked relative to estimate fair value,the total stockholder returns of each member of the performance peer group that remains within the performance peer group for the entire performance period. The total number of PSUs that vest is based on the ranking of the Company’s total stockholder return relative to the total stockholder return of each of the Company’s peer companies, and definesranges from a 200% payout for ranking in the 90th percentile or above to 0% payout for ranking below the 30th percentile with percentiles interpolated between these payouts.PSUs that become vested also generally entitle the holder to be credited with dividend equivalent payments in cash, with such dividend equivalents payable when, and to the extent, the PSUs are settled (or such accrued dividend equivalents will be forfeited to the extent the PSUs are forfeited).Because the PSUs vest based on market conditions, Monte Carlo simulation models were used to determine the grant-date fair value of the PSUs. The assumptions used in the Monte Carlo simulation models included weighted average expected terms ranging from 2.8 years to 3.0 years, weighted average expected volatility ranging from 40.0% to 53.6%, and weighted average risk-free rates ranging from 0.2% to 3.9%.PSUs and RSUs Number of Units Weighted-average grant date fair value for equity awards (per unit) Weighted Average Remaining Contractual Term Outstanding at beginning of fiscal year 2023 1,288,342 $ 18.27 1.8 Years Granted 746,200 17.44 Vested (477,577) 17.66 Forfeited (95,199) 17.50 Outstanding at end of fiscal year 2023 1,461,766 $ 18.28 1.5 Years 86Stock OptionsThe Company granted its Executive Leadership Team non-qualified stock options exercisable for Class A Common Stock of the Company, provided that the exercise of such stock options was contingent upon the Company filing a financial instrumentregistration statement on Form S-8 with the SEC, which occurred on November 2, 2020. For non-cash, stock-based awards exchanged for employee services, the Company measures stock-based compensation on the grant date, based on the fair value of the award, and recognizes expense over the requisite service period, which for the Company is generally the vesting period. To estimate the fair value of an award, the Company uses the Black-Scholes pricing model. This model requires inputs such as expected term, expected volatility and risk-free interest rate. These inputs are subjective and generally require significant analysis and judgment to develop. For all grants during fiscal year 2022, the amount at whichCompany calculated the instrument couldexpected term based on the simplified method as allowable under ASC 718 due to a lack of sufficient trading history for the Company’s Class A Common Stock. The use of this method effectively assumes that exercise occurs evenly over the period from vesting until expiration, and therefore the expected term is the midpoint between the service period and the contractual term of the award. The Company estimates the volatility of its Class A Common Stock by analyzing its historical volatility and considering volatility data of its peer group and their implied volatility. The Company recognizes forfeitures when they occur.Options issued under the 2020 Plan generally have a maximum contractual life of 10 years from the grant date and must be exchangedissued with an exercise price equal to or greater than the fair market value of the shares of Class A Common Stock on the date of grant, as determined by the administrator of the 2020 Plan. Options issued under the 2020 Plan are subject to time-based vesting, continued employment, and other conditions outlined in a current transaction between willing parties. Asthe 2020 Plan with the fair value determined using the Black-Scholes Option Pricing Model.On January 31, 2022, the Company granted its Executive Leadership Team stock options exercisable for Class A Common Stock of the Company pursuant to the terms set forth above, and 100% of these options will vest and become exercisable on December 31, 2018,2024. The Company granted stock options with an aggregate of 377,550 shares of Class A Common Stock underlying such options, on January 31, 2022 and the recorded valuesexercise price of cash, cashthese options is the Company’s closing share price of $15.51 on January 31, 2022. The fair value of each stock option granted was determined to be $6.06 using the Black-Scholes Option Pricing Model based on an expected volatility of 40.0%, expected option term of approximately 6.4 years, and marketable securities heldrisk-free rate of return of 1.4%. The risk-free rates are based on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent remaining term. In May 2022, an additional 16,923 stock option awards were granted.Stock Options Number of Units Weighted-Average Grant Date Fair Value for Equity Awards (per unit) Weighted Average Remaining Contractual Term Aggregate Intrinsic Value(1)Outstanding at beginning of fiscal year 2023 522,203 $ 5.60 1.8 Years Granted — — Vested (127,730) — Forfeited — — Outstanding and exercisable at end of fiscal year 2023 394,473 $ 6.01 1.0 Year 0.00 (1) The aggregate intrinsic value in the Trust Account, prepaid expenses, accounts payable, and accrued expenses approximateabove table represents the fair values due tototal pre-tax amount that a participant would receive if the short-term natureoption had been exercised on the last day of the instruments.Recent Accounting PronouncementsIn August 2018,respective fiscal period. Options with a market value less than its exercise value are not included in the SEC adoptedintrinsic value amount.Employee Stock Purchase PlanOn December 10, 2020, the final rule under SEC Release No. 33-10532, Disclosure UpdateBoard of Directors approved the 2021 Employee Stock Purchase Plan ("ESPP”), subject to stockholder approval. The ESPP was effective January 1, 2021, and Simplification, amending certain disclosure requirementsany purchase rights that were redundant, duplicative, overlapping, outdated or superseded. In addition,granted under the amendments expandedESPP prior to stockholder approval could not be exercised unless and until stockholder approval was obtained.87Under the disclosure requirementsESPP, associates are offered the option to purchase discounted shares of Class A Common Stock during offering periods designated by the administrator. Each offering period will be one year, consisting of two six-month purchase periods, commencing on each January 1 and July 1 following the effective date of the ESPP. Shares are purchased on the analysis of shareholders' equity for interim financial statements. Underapplicable exercise dates, which is the amendments, an analysis of changes in each caption of shareholders' equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balancelast trading day of each period for which a statement of comprehensive income is requiredpurchase period. The ESPP permits participants to be filed. The Company anticipates its first presentation of changes in shareholders' equity will be included in its Form 10-Q for the quarter ended March 31, 2019.Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have an effect onpurchase the Company’s financial statements.NOTE 3. INITIAL PUBLIC OFFERINGOn October 10, 2018, the Company sold 44,000,000 UnitsClass A Common Stock at a purchase price of $10.00 per Unit innot less than 85% of the Initial Public Offering, including 4,000,000 Units issued pursuantlesser of (i) the “fair market value” of a share on the first day of a purchase period, rounded up to the partial exercise of the underwriters’ over-allotment option. Each Unit consists of one Class A ordinarynearest whole cent per share and one-third(ii) the “fair market value” of one redeemable warrant (“Public Warrant”). Eacha share on the purchase date of such purchase period, rounded up to the nearest whole Public Warrant entitles the holder to purchase one Class A ordinary share at an exercise price of $11.50cent per share, subject to adjustment (see Note 6).NOTE 4. RELATED PARTY TRANSACTIONSFounder SharesOn May 2, 2018, the Company issued 2,875,000 Class B ordinary shares to the Sponsor (the “Founder Shares”) in exchange for a capital contribution of $25,000. On September 7, 2018, the Company effected a share capitalization resulting in the Sponsor holding an aggregate of 10,937,500 Founder Shares. On September 10, 2018, the Sponsor transferred 45,000, 45,000, 52,500 and 52,500 Founder Shares to each of Antonio F. Fernandez, Matthew M. Mannelly, William D. Toler and Craig D. Steeneck, respectively. On October 4, 2018, the Company effected a share capitalization resulting in an aggregate of 12,375,000 Founder Shares. On October 10, 2018, the underwriters partially exercised the over-allotment option, and an aggregate of 500,000 Founder Shares were subsequently surrendered to the Companylimits set by the Sponsor for no consideration on October 19, 2018. Of the 11,875,000 shares outstandingInternal Revenue Code of 1986, as of December 31, 2018, the Sponsor owned an aggregate of 11,680,000 Class B ordinary sharesamended (the “Code”) and the independent directors owned an aggregate of 195,000 Class B ordinary shares.Founder Shares will automatically convert into Class A ordinary shares concurrently with or immediately following the consummation of a Business Combination, or earlier at the option of the holder, on a one-for-one basis. However, if additional Class A ordinary shares or any other equity-linked securities are issued or deemed issuedpurchase price used was 90% in connection with the initial Business Combination, the2021, 92.5% in 2022 and 95% in 2023.The maximum number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, 20% of the total number of Class A ordinary shares outstanding after such conversion (after giving effect to any redemptions of Class A ordinary shares by public shareholders), including the total number of Class A ordinary shares issued or deemed issued, or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial Business Combination (including the Forward Purchase Shares, but not the Forward Purchase Warrants (both as defined below)), excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, or to be issued, to any seller in the initial Business Combination and any Private Placement Warrants issued to the Sponsor upon conversion of working capital loans, provided that such conversion of Founder Shares will never occur on a less than one-for-one basis.F-12COLLIER CREEK HOLDINGSNOTES TO FINANCIAL STATEMENTSThe holders of the Founder Shares agreed not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (i) one year after the completion of the initial Business Combination or (ii) the date on which we complete a liquidation, merger, share exchange or other similar transaction after the initial Business Combination that results in all of the Company’s shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property (except to certain permitted transferees). Any permitted transferees will be subject to the same restrictions and other agreements of the Initial Shareholders with respect to any Founder Shares. Notwithstanding the foregoing, if the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination, the Founder Shares will be released from the lock-up.Private Placement WarrantsOn October 10, 2018, the Company sold 7,200,000 Private Placement Warrants to the Sponsor at $1.50 per warrant, generating gross proceeds of $10.8 million in the Private Placement. Each Private Placement Warrant is exercisable to purchase one Class A ordinary share at $11.50 per share. A portion of the net proceeds from the Private Placement was added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the Private Placement Warrants will expire worthless.Related Parties LoansThe Company’s Sponsor had agreed to loan the Company up to $200,000 to be used for the payment of costs related to the Initial Public Offering (the “Note”). The Note was non-interest bearing, unsecured and was due on the earlier of December 31, 2018 or the closing of the Initial Public Offering. The Company had borrowed $155,000 under the Note, which was fully repaid on October 17, 2018.Administrative Service FeeThe Company agreed, commencing on the effective date of the Initial Public Offering through the earlier of the Company’s consummation of a Business Combination and its liquidation, to pay an affiliate of the Sponsor a monthly fee of $10,000 for office space, and secretarial and administrative services. The Company recorded an aggregate of approximately $27,000 in general and administrative expenses in connection with this administrative services agreement in the accompanying statement of operations during the period from April 30, 2018 (inception) through December 31, 2018.Forward Purchase AgreementsOn September 7, 2018, the Company entered into forward purchase agreements with the Sponsor and the Company’s independent directors (the “Forward Purchase Agreements”) which provide for the purchase of an aggregate of 3,500,000 Class A ordinary shares (the “Forward Purchase Shares”), plus an aggregate of 1,166,666 redeemable warrants (the “Forward Purchase Warrants”) to purchase one Class A ordinary share at $11.50 per share, for an aggregate purchase price of $35,000,000, or $10.00 per Class A ordinary share, in a private placement to close concurrently with the closing of the initial Business Combination. The Forward Purchase Warrants will have the same terms as the Public Warrants. These purchases will be made regardless of whether any Class A ordinary shares are redeemed by public shareholders. The Forward Purchase Shares and Forward Purchase Warrants will be issued only in connection with the closing of the initial Business Combination. The proceeds from the sale of Forward Purchase Shares may be used as part of the consideration to the sellers in the initial Business Combination, expenses in connection with the initial Business Combination or for working capital in the post-transaction company.F-13COLLIER CREEK HOLDINGSNOTES TO FINANCIAL STATEMENTSNOTE 5. COMMITMENTS & CONTINGENCIESRegistration RightsThe holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of working capital loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of working capital loans) are entitled to registration rights pursuant to a registration rights agreement entered into on the effective date of the Initial Public Offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.Pursuant to the Forward Purchase Agreements, the Company agreed to use its commercially reasonable best efforts (i) to file within 30 days after the closing of a Business Combination a registration statement with the SEC for a secondary offering of the Forward Purchase Shares and the Forward Purchase Warrants (and underlying Class A ordinary shares), (ii) to cause such registration statement to be declared effective promptly thereafter and (iii) to maintain the effectiveness of such registration statement until the earliest of (A) the date on which the Sponsor and all of the independent directors or their respective assignees cease to hold the securities covered thereby and (B) the date all of the securities covered thereby can be sold publicly without restriction or limitation under Rule 144 under the Securities Act. In addition, the Forward Purchase Agreements provide these holders will have certain “piggy-back” registration rights to include their securities in other registration statements filed by the Company.Underwriting AgreementThe Company granted the underwriters a 45-day option from the date of the prospectus relating to the Initial Public Offering to purchase up to 6,000,000 additional Units to cover over-allotments, if any, at the Initial Public Offering price less the underwriting discounts and commissions. On October 10, 2018, the underwriters partially exercised this option in respect of 4,000,000 Units and, as agreed with the Company, the underwriters waived their right to further exercise the option.The underwriters were entitled to underwriting discounts of $0.20 per unit, or $8.8 million in the aggregate, paid upon the closing of the Initial Public Offering. In addition, the underwriters were entitled to a deferred underwriting commission of $0.35 per unit, or $15.4 million in the aggregate. The deferred underwriting fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.Deferred Legal FeesThe Company is obligated to pay deferred legal fees of $50,000 upon the consummation of an initial Business Combination for services performed in connection with the Initial Public Offering. If no Business Combination is consummated, the Company will not be obligated to pay such fee.NOTE 6. SHAREHOLDERS’ EQUITYClass A Ordinary Shares — The Company is authorized to issue 400,000,000 Class A ordinary shares with a par value of $0.0001 per share. Holders of the Company’s Class A ordinaryCommon Stock available for sale under the ESPP shall not exceed in the aggregate 1,500,000 shares, are entitled to one voteand may be unissued shares or treasury shares or shares bought on the market for each share.purposes of the ESPP. As of December 31, 2018, there were 44,000,0002023, 1,133,522 shares of Class A ordinarycommon stock remain available for issuance under the ESPP. For the fiscal year ended December 31, 2023, the Company granted 99,788 shares issuedwith a fair value of $1.5 million, and outstanding, including 42,061,226 Class A ordinarythe Company recognized compensation expense of $0.3 million. For the fiscal year ended January 1, 2023, the Company granted 138,096 shares subject to possible redemption.Class B Ordinary Shares — with a fair value of $2.0 million, and the Company recognized compensation expense of $0.4 million. For the fiscal year ended January 2, 2022, the Company granted 128,642 shares with a fair value of $2.7 million, and the Company recognized compensation expense of $0.5 million.12.CONTINGENCIESLitigation MattersThe Company is authorizedinvolved in litigation and other matters incidental to issue 50,000,000 Class B ordinary sharesthe conduct of its business, the results of which, in the opinion of management, are not likely to be material to the Company’s financial condition, results of operations or cash flows.Tax MattersThe Company received an assessment from the Commonwealth of Pennsylvania pursuant to a sales and use tax audit for the period from January 1, 2014 through December 31, 2016. As of January 2, 2022, the Company had a reserve of $1.3 million to cover the assessment. On January 7, 2022, the Company settled the audit with a parthe Commonwealth of Pennsylvania for $0.9 million.GuaranteesThe Company partially guarantees loans made to IOs by Cadence Bank for the purchase of routes. The outstanding balance of loans guaranteed was $0.7 million and $1.5 million at December 31, 2023 and January 1, 2023, respectively, all of which was recorded by the Company as off balance sheet arrangements. The maximum amount of future payments the Company could be required to make under the guarantees equates to 25% of the outstanding loan balance up to $2.0 million. These loans are collateralized by the routes for which the loans are made. Accordingly, the Company has the ability to recover substantially all of the outstanding loan value upon default.The Company partially guarantees loans made to IOs by Bank of $0.0001 per share. HoldersAmerica for the purchase of routes. The outstanding balance of loans guaranteed that were issued by Bank of America was $52.8 million and $36.0 million at December 31, 2023 and January 1, 2023, respectively, which are accounted for as an off balance sheet arrangement. As discussed in "Note 8. Long-Term Debt”, the Company also sold notes receivable on its books to Bank of America during fiscal year 2021, fiscal year 2022 and fiscal year 2023, which the Company partially guarantees. The outstanding balance of notes purchased by Bank of America at December 31, 2023 and January 1, 2023 was $14.8 million and $17.9 million, respectively. Due to the structure of the transactions, the sale did not qualify for sale accounting treatment, and as such the Company records the notes payable obligation owed by the IOs to the financial institution on its Consolidated Balance Sheets; the corresponding note receivable also remained on the Company’s Consolidated Balance Sheets. The maximum amount of future payments the Company could be required to make under these guarantees equates to 25% of the outstanding loan balance on the first day of each calendar year plus 25% of the amount of any new loans issued during such calendar year. These loans are collateralized by the routes for which the loans are made. Accordingly, the Company has the ability to recover substantially all of the outstanding loan value upon default.88The Company guarantees loans made to IOs by M&T Bank for the purchase of routes. The agreement with M&T Bank was amended in January 2020 so that the Company guaranteed up to 25% of the greater of the aggregate principal amount of loans outstanding on the payment date or January 1st of the subject year. The outstanding balance of loans guaranteed was $2.2 million and $3.4 million at December 31, 2023 and January 1, 2023, respectively, all of which were included in the Company's Consolidated Balance Sheets. These loans are collateralized by the routes for which the loans are made. Accordingly, the Company has the ability to recover substantially all of the outstanding loan value upon default.Unclaimed PropertyThe Company was notified in September 2016 that several states requested an audit of the Company’s Class B ordinary shares are entitledunclaimed property practices. The states initiating the audit include Connecticut, Idaho, Maryland, Massachusetts, New Hampshire, New York, South Dakota, and Tennessee but was later expanded to one vote for each share. On May 2, 2018, 2,875,000 Class B ordinary shares were issuedinclude a total of 22 states. The audit is limited to UQF and outstanding. On September 7, 2018,does not include any other legal entities. The audit consists of three components including accounts payable, payroll, and accounts receivable customer over-payments. As of early fiscal year 2023, the Company effected asettled the audit with the various jurisdictions for $0.1 million.13.ACCUMULATED OTHER COMPREHENSIVE INCOMETotal accumulated other comprehensive income was $37.5 million as of December 31, 2023 and $51.0 million as of January 1, 2023. Total accumulated other comprehensive income consists solely of unrealized gains (losses) from the Company’s derivative financial instruments accounted for as cash flow hedges.Changes to the balance in accumulated other comprehensive income were as follows:(in thousands) Gains (Losses) onCash Flow HedgesBalance as of January 3, 2021 $ 924 Unrealized gain on cash flow hedges 2,791 Balance as of January 2, 2022 3,715 Unrealized gain on cash flow hedges 47,279 Balance as of January 1, 2023 50,994 Unrealized loss on cash flow hedges (13,543) Balance as of December 31, 2023 37,451 Less balance attributable to noncontrolling interest as of December 31, 2023 (14,493) Balance attributable to controlling interest as of December 31, 2023 $ 22,958 14.SUPPLEMENTARY CASH FLOW INFORMATION(in thousands) For the Fiscal Year Ended December 31, 2023 For the Fiscal Year Ended January 1, 2023 For the Fiscal Year Ended January 2, 2022 Cash paid for interest $ 46,905 $ 41,711 $ 31,638 Refunds related to income taxes $ 1,686 $ 4,663 $ 726 Payments for income taxes $ 8,820 $ 6,988 $ 3,653 8915.INCOME TAXESThe Company is subject to federal and state income taxes with respect to our allocable share capitalization resulting in an aggregate of 10,937,500 Class B ordinary shares outstanding. On October 4, 2018,any taxable income or loss of UBH, as well as any standalone income or loss the Company effectedgenerates. UBH is treated as a share capitalization resultingpartnership for federal income tax purposes, and for most applicable state and local income tax purposes, and generally does not pay income taxes in an aggregatemost jurisdictions. Instead, UBH taxable income or loss is passed through to its members, including the Company. Despite its partnership treatment, UBH is liable for income taxes in those states not recognizing its pass-through status and for certain of 12,375,000 Class B ordinary shares outstanding. On October 10, 2018,its subsidiaries not taxed as pass-through entities. The Company has acquired various domestic entities taxed as corporations, which are now wholly-owned by us or our subsidiaries. Where required or allowed, these subsidiaries also file and pay tax as a consolidated group for federal and state income tax purposes. The Company anticipates this structure to remain in existence for the underwriters partially exercisedforeseeable future.The provision (benefit) for income taxes was as follows:(in thousands) For the Fiscal Year Ended December 31, 2023 For the Fiscal Year Ended January 1, 2023 For the Fiscal Year Ended January 2, 2022 Current: Federal $ 7,816 $ 4,038 $ 1,553 State 1,879 1,403 2,010 Total current 9,695 5,441 3,563 Deferred: Federal (7,591) (20,986) (1,949) State (1,347) (8,374) 6,472 Total deferred (8,938) (29,360) 4,523 Total $ 757 $ (23,919) $ 8,086 A reconciliation of the over-allotment option,expected statutory federal tax and an aggregatethe total income tax (benefit) expense was as follows:(in thousands) For the Fiscal Year Ended December 31, 2023 For the Fiscal Year Ended January 1, 2023 For the Fiscal Year Ended January 2, 2022 Federal statutory rate (21%) $ (8,248) $ (7,972) $ 3,378 State income taxes, net of federal benefit (528) (2,435) 6,440 Investment in UBH 177 31 (31) Noncontrolling interest in UBH 2,610 2,792 2,448 Valuation allowance 5,878 (17,177) 5,195 Remeasurement of warrant liability (469) (151) (7,702) Return to provision 2 (79) (771) Permanent book to tax differences — — (593) Credits (41) (201) (239) IRC §162(m) 1,401 875 191 Nondeductible expenses 88 12 12 Other (113) 386 (242) $ 757 $ (23,919) $ 8,086 90The tax effect of 500,000 Founder Shares were surrenderedtemporary differences that gave rise to us bysignificant components of deferred tax assets and liabilities consisted of the Sponsorfollowing at December 31, 2023 and January 1, 2023:(in thousands) As of December 31, 2023 As of January 1, 2023 Deferred Tax Assets: Accrued expenses $ 427 $ 390 Pension, retirement and other benefits 419 449 Inventories, including uniform capitalization 145 320 Investment in UBH, operations 20,943 25,237 Acquisition costs 592 708 Net operating losses 23,596 22,291 IRC §163(j) 12,753 7,480 Credits 713 422 Charitable contributions 149 98 Other deferred tax assets 172 215 Total gross deferred tax assets 59,909 57,610 Valuation allowance (36,947) (27,339) Net deferred tax assets 22,962 30,271 Deferred Tax Liabilities: Plant and equipment, accelerated depreciation (6,957) (13,984) Intangibles (66,556) (71,883) Investment in UBH, nonreversing (63,900) (68,957) Other deferred tax liabilities (239) (249) Total deferred tax liabilities (137,652) (155,073) Net deferred tax liabilities $ (114,690) $ (124,802) The U.S. federal government enacted the Coronavirus Aid, Relief and Economic Security Act (the CARES Act) on March 27, 2020, the Consolidated Appropriations Act, 2021 on December 27, 2020, and the Inflation Reduction Act of 2022 on August 16, 2022, none of which had a material impact on our provision for no consideration on October 19, 2018. income taxes.Net Operating Loss and Tax Credit CarryforwardAs of December 31, 2018, there were 11,875,000 Class B ordinary shares outstanding.
2023 and January 1, 2023, the Company and certain subsidiaries had federal net operating loss ("NOL") carryforwards of $102.2 million and $93.6 million, respectively.Of these, $30.7 million will expire, if not utilized, by 2037.F-14COLLIER CREEK HOLDINGSNOTES TO FINANCIAL STATEMENTSClass B ordinary shares will automatically convert into Class A ordinary shares onstate NOL carryforwards continue to expire in 2023, however, some state NOL's are able to be carried forward indefinitely.As of December 31, 2023 and January 1, 2023, the first business day followingCompany and certain subsidiaries had federal tax credit carryforwards in the consummationamount of $0.7 million and $0.4 million, respectively.As of December 31, 2023 and January 1, 2023, certain subsidiaries had nominal state tax credit carryforwards.Utilization of some of the initialfederal and state net operating loss and credit carryforwards are subject to annual limitations due to the "change in ownership” provisions of the Code and similar state provisions. The annual limitations may result in the expiration of net operating losses and credits before utilization.91Valuation AllowanceThe Company recorded a valuation allowance of $36.9 million and $27.3 million at December 31, 2023 and January 1, 2023, respectively. In determining the need for a valuation allowance, the Company assessed the available positive and negative evidence to estimate whether future taxable income would be generated to permit use of the existing deferred tax assets ("DTA's”). As of December 31, 2023, a significant piece of objective negative evidence evaluated was the three-year cumulative loss before taxes. Such objective evidence limits the ability to consider other subjective evidence, such as projections for future growth. The Company determined that there is uncertainty regarding the utilization of certain DTA's such as some of the investment in UBH, federal operating losses subject to annual limitations due to "change in ownership” provisions, and state net operating losses where the Company does not expect to continue to have nexus. Therefore, a valuation allowance has been recorded against the DTA's for which it is more-likely-than-not they will not be realized. The Company has DTA’s related to its investment in the partnership that are expected to be realized in the ordinary course of operations or generate future net operating losses for which a portion will have an indefinite carryforward period. Additionally, the Company has deferred tax liabilities ("DTL’s”) related to its investment in the partnership that will not reverse in the ordinary course of business and will only reverse when the partnership is sold or liquidated. The Company has no intention of disposing of or liquidating the partnership and therefore has not considered the indefinite lived DTL as a source of income to offset other DTA’s. In weighing positive and negative evidence, both objective and subjective, including its three-year cumulative loss and the ability to offset DTA’s with definite lived DTL’s, the Company has recorded a valuation allowance against its DTA’s related to net operating losses and deductible book/tax differences and recorded a DTL primarily related to the book over tax basis in the investment in the partnership that will not reverse in the ordinary course of operations. The Company considered that an indefinite lived DTL may be considered as a source of taxable income for an indefinite lived DTA; however, given our indefinite lived DTL will only reverse upon sale or liquidation, the Company determined that it was more appropriate to record a valuation allowance against a portion of its DTA’s. The amount of DTA considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as projections for growth.The net change in valuation allowance of $9.6 million was recorded as an increase to income tax expense for $6.4 million and an adjustment to equity for $3.2 million.As of December 31, 2023, tax years 2020 through 2023 remain open and subject to examination by the Internal Revenue Service and the majority of the states where the Company has nexus, and tax years 2019 through 2023 remain open and subject to examination in selected states that have a four year statute of limitations.Upon audit, tax authorities may challenge all or part of a tax position. A tax position successfully challenged by a taxing authority could result in an adjustment to our provision for income taxes in the period in which a final determination is made. The Company did not maintain any unrecognized tax benefits as of December 31, 2023 and January 1, 2023.Tax receivable agreement liabilityPursuant to an election under section 754 of the Code, the Company obtained an increase in its share of the tax basis in the net assets of UBH when it was deemed to purchase UBH units from a third party then holding common and preferred interests of the Continuing Members and purchased UBH units from the Continuing Members per the Business Combination or earlier atAgreement. The Continuing Members have the option to exchange UBH units along with the forfeiture of a corresponding number of Class V Common Stock of the holder thereof,Company for UBI common stock post-Business Combination. The Company intends to treat any such exchanges as direct purchases for U.S. federal income tax purposes, which is expected to further increase its share of the tax basis in the net assets of UBH. The increases in tax basis may reduce the amounts the Company would otherwise pay in the future to various tax authorities. They may also decrease gains (or increase losses) on a one-for-one basis. However, if additional Class A ordinary shares or any other equity-linked securities are issued or deemed issuedfuture dispositions of certain capital assets to the extent tax basis is allocated to those capital assets.92Pursuant to the Business Combination Agreement, the Company entered into the Tax Receivable Agreement in connection with the initial Business Combination (the “Tax Receivable Agreement” or “TRA”), which provides for the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, 20% of the total number of Class A ordinary shares outstanding after such conversion (after giving effect to any redemptions of Class A ordinary shares by public shareholders), including the total number of Class A ordinary shares issued or deemed issued, or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued,payment by the Company in connection with or in relation to the consummationof 85% of the initial Business Combination (including the Forward Purchase Shares, but not the Forward Purchase Warrants), excludingamount of any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, or to be issued, to any sellertax benefits realized as a result of (i) increases in the initialshare of the tax basis in the net assets of UBH resulting from the Business Combination and any future exchanges by the Continuing Members of UBH units for UBI common stock; (ii) tax basis increases attributable to payments made under the TRA; and (iii) tax amortization deductions attributable to the acquisition of Kennedy and the election to treat the transaction as an asset deal for tax purposes (the "TRA Payments"). The rights of each party under the TRA other than the Company are assignable, subject to certain restrictions. The timing and amount of aggregate payments due under the TRA may vary based on a number of factors, including the timing and amount of taxable income generated by the Company each year, as well as the tax rate then applicable, among other factors.As of December 31, 2023, the Company recorded a TRA liability of $24.3 million, but it has a total liability of $38.5 million related to its projected obligations under the TRA. The total TRA liability includes $24.3 million that relates to payments that originated with the Business Combination and the acquisition of Kennedy and $14.2 million that relates to equity transactions that occurred during the fourth quarter of 2020 and third quarter of 2021. The Company recorded a partial valuation allowance on its DTA, that fully covers the tax basis that originated with the equity transactions that occured during the fourth quarter of 2020 and third quarter of 2021 as they are not more likely than not to be realized based on the positive and negative evidence that the Company considered. The Company has not recorded the $14.2 million of TRA liability that relates to the equity transactions that occured during the fourth quarter of 2020 and third quarter of 2021 as the liability is not probable under ASC 450 since the related DTA is not more likely than not to be realized as evidenced by the valuation allowance. The Company will continue to monitor positive and negative evidence to analyze its valuation allowance and it believes that sufficient positive evidence may arise to permit the release of a significant portion of its valuation allowance. If that were to occur, it would result in the need to record $14.2 million of additional TRA liability for the equity transactions that occured during the fourth quarter of 2020 and third quarter of 2021, which would result in a non-cash charge to pretax results.16.LEASESWe determine if a contractual arrangement is a lease at inception. Our lease arrangements provide the Company the right to utilize certain specified tangible assets for a period of time in exchange for consideration. Our leases primarily relate to building space, vehicles, and equipment. Our leases generally have remaining terms ranging from one month to twelve years.We separate lease components from vehicles leases and do not separate non-lease components from our building leases for the purposes of measuring our lease liabilities and assets. Our leases consist of operating leases which are presented within current accrued expenses and other, non-current accrued expenses and other, and finance leases are presented within current portion of other notes payable, and non-current portion of other notes payable on our consolidated balance sheets. Leases with an initial term of 12 months or lease are not recorded on the balance sheet.We recognize a lease liability and a right-of-use asset at the lease commencement date based on the present value of future lease payments over the lease term discounted using our incremental borrowing rate. As many of our leases do not provide an implicit rate, we use our incremental borrowing rate based on information available at the commencement date in determining the present value of lease payments.We recognize operating lease expenses on a straight-line basis over the term of the lease within operating expenses. Expenses associated with our finance leases consists of two components, including interest on our outstanding finance lease obligations and amortization of the related right-of-use assets. The interest component is recorded in interest expense and depreciation of the finance lease asset is recognized over a straight-line basis over the term of the lease within cost of goods sold, selling expenses, and administrative expenses on the consolidated statements of operations and comprehensive income (loss).Our leases do not contain material residual value guarantees or material restrictive covenants. Some of our leases include optional renewal periods or termination provisions which we assess at inception to determine the term of the lease, subject to reassessment in certain circumstances.93The following table presents lease expense we have recorded on our consolidated statements of operations for the fiscal years ended December 31, 2023, January 1, 2023 and January 2, 2022:(in thousands) For the Fiscal Year Ended December 31, 2023 For the Fiscal Year Ended January 1, 2023 For the Fiscal Year Ended January 2, 2022 Finance lease expense: Amortization of finance ROU asset $ 2,973 $ 2,585 $ 2,553 Interest of finance ROU asset 550 318 254 Total finance lease expense 3,523 2,903 2,807 Operating lease expense (1)22,437 16,679 9,118 Total lease expense $ 25,960 $ 19,582 $ 11,925 (1) Included variable and short-term lease expense of $4.6 million and $5.3 million, respectively, for the fiscal year ended December 31, 2023, $3.2 million and $3.8 million, respectively, for the fiscal year ended January 1, 2023 and $2.1 million and $3.4 million, respectively, for the fiscal year ended January 2, 2022.Finance leases, net, are included in Property, Plant and Equipment, net as follows:(in thousands) As of
December 31, 2023As of
January 1, 2023Leases $ 17,956 $ 16,340 Less: accumulated depreciation 8,007 5,571 Leases, net $ 9,949 $ 10,769 Maturities of lease liabilities as of December 31, 2023:(in thousands) Operating Leases Finance Leases Total 2024 $ 17,630 $ 3,314 $ 20,944 2025 15,500 2,761 18,261 2026 12,940 2,465 15,405 2027 9,061 1,937 10,998 2028 5,008 752 5,760 2029 and thereafter 5,690 167 5,857 Total undiscounted obligations 65,829 11,396 77,225 Less imputed interest (6,909) (1,251) (8,160) Present value of lease obligations $ 58,920 $ 10,145 $ 69,065 94The following table summarizes supplemental balance sheet information related to leases as of December 31, 2023 and January 1, 2023:As of December 31, 2023 As of January 1, 2023 (in thousands, except lease term and discount rate) Operating Leases Finance Leases Operating Leases Finance Leases ROU asset, non-current(1)$ 56,705 $ 9,949 $ 46,075 $ 10,769 Lease liability, current $ 14,992 $ 2,808 $ 12,389 $ 2,839 Lease liability, non-current 43,928 7,337 35,331 8,156 Total lease liabilities $ 58,920 $ 10,145 $ 47,720 $ 10,995 Weighted average remaining lease term (in years) 4.4 3.9 4.8 4.4 Weighted average discount rate 4.04 % 5.80 % 3.22 % 4.43 % (1) Finance ROU assets are reflected within property, plant, and equipment, net on our consolidated balance sheets and operating leases ROU assets are reflected within other assets on our consolidated balance sheets.The following table presents other information related to leases for the fiscal year ended December 31, 2023, January 1, 2023 and January 2, 2022 (in thousands):For the Fiscal Year Ended December 31, 2023 For the Fiscal Year Ended January 1, 2023 For the Fiscal Year Ended January 2, 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 16,717 $ 12,531 $ 8,755 Operating cash flows from finance leases $ 550 $ 318 $ 254 Financing cash flows from finance leases $ 2,973 $ 2,585 $ 2,741 Leased assets obtained in exchange for new lease liabilities: Operating leases $ 26,315 $ 24,958 $ 11,412 Finance leases $ 2,761 $ 6,379 $ 2,157 17.WARRANTSAs a result of the Business Combination, the Company assumed 7,200,000 Private Placement Warrants that were initially issued to the Sponsor upon conversion of working capital loans, provided that such conversion of Class B ordinary shares will never occur on a less than one-for-one basis.Preferred Shares — The Company is authorized to issue 1,000,000 preferred sharessimultaneously with a par value of $0.0001 per share. At December 31, 2018, there were no preferred shares issued or outstanding.Warrants — Public Warrants may only be exercised for a whole number of shares. No fractional Public Warrants will be issued upon separation of the Units and only whole Public Warrants will trade. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12 months from the closing of the Initial Public Offering; provided in each caseits initially public offering that the Company has an effective registration statement under the Securities Act covering theare exercisable for shares of UBI Class A ordinary shares issuable upon exerciseCommon Stock. The Private Placement Warrants have a term of the Public Warrants and a current prospectus relating to them is available (or the Company permits holders to exercise their Public Warrants on a cashless basis and such cashless exercise is exempt from registration under the Securities Act). The Company agreed that as soon as practicable, but in no event later than 15 business days, after the closing of a Business Combination, the Company will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the Public Warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Public Warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the sixtieth (60th) day after the closing of the initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. The Public Warrants will expire five years after the completionand expire in August 2025. As of a Business Combination or earlier upon redemption or liquidation.The Private Placement Warrants are identical toexercisable on a cashless basis, at the Public Warrants underlyingholder’s option, and are non-redeemable by the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A ordinary shares issuable upon exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be non-redeemableCompany so long as they are held by the initial purchasers or such purchasers’their permitted transferees. If the Private Placement Warrants are held by someone other than the Initial Shareholdersinitial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.F-15COLLIER CREEK HOLDINGSNOTES TO FINANCIAL STATEMENTSThe Company may call its warrants for redemption (except with respect to the Private Placement Warrants):·in whole and not in part;·at a price of $0.01 per warrant;·upon a minimum of 30 days’ prior written notice of redemption; and·if, and only if, the last reported last sale price of the Class A ordinary shares equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.Additionally, commencing ninety days after the Public Warrants become exercisable, the Company may redeem its outstanding warrants (except with respect to the Private Placement Warrants) in whole and not in part, for the number of Class A ordinary shares determined by reference to the table set forth in the warrant agreement with respect to such warrants.The Warrants are accounted for as derivative liabilities in accordance with ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity ("ASC 815-40”), due to certain settlement provisions in the corresponding warrant agreement that do not meet the criteria to be classified in stockholders’ equity. Pursuant to ASC 815-40, the Warrants are classified as a liability at fair value on the Company’s prospectusConsolidated Balance Sheet, and the change in the fair value of such liability in each period is recognized as a non-cash gain or loss in the Company’s Consolidated Statements of Operations and Comprehensive Income (loss). The Warrants are deemed equity instruments for income tax purposes, and accordingly, there is no tax accounting relating to changes in the fair value of the Warrants recognized.95The remeasurement of the warrant liability resulted in a gain of $2.2 million for the fiscal year ended December 31, 2023 and $0.7 million for the fiscal year ended January 1, 2023, and $36.7 million for the fiscal year ended January 2, 2022. Such gains are not attributable to the noncontrolling interest.18.EQUITYClass A Common StockThe Company is authorized to issue 1,000,000,000 shares of Class A Common Stock, par value $0.0001 per share, of which 81,187,977 and 80,882,334 shares of UBI were issued and outstanding as of December 31, 2023 and January 1, 2023, respectively.Class V Common StockThe Company is also authorized to issue 61,249,000 shares of Class V Common Stock, par value of $0.0001 all of which were issued to the Continuing Members in connection with the closing of the Business Combination. Each of the Continuing Members' common limited liability company units of UBH along with a share of Class V Common Stock may be exchanged for one share of Class A Common Stock of the Company upon certain restrictions being satisfied. As of both December 31, 2023 and January 1, 2023 there was 59,349,000 shares of Class V Common Stock outstanding. On September 21, 2021, the Continuing Members exchanged 1,000,000 Common Company Units together with the surrender and cancellation of the same number of Class V Common Stock for an equal number of shares of Class A Common Stock. The Company did not receive any proceeds as a result of this exchange.19.EARNINGS PER SHAREBasic earnings per share is based on the weighted average number of shares of Class A Common Stock issued and outstanding. Diluted earnings per share is based on the weighted average number shares of Class A Common Stock issued and outstanding and the effect of all dilutive common stock equivalents and potentially dilutive share-based awards outstanding. There is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company's net loss position. The potentially dilutive securities that would be anti-dilutive due to the Company's net loss are not included in the calculation of diluted net loss per share attributable to controlling interest. The anti-dilutive securities are included in the table below. Refer to Note 11. "Share-Based Compensation" for further information on the share-based awards considered in the diluted EPS computation.96The following tables reconcile the numerators and denominators used in the computations of both basic and diluted earnings pershare:(in thousands, except share data) For the Fiscal Year Ended December 31, 2023 For the Fiscal Year Ended January 1, 2023 For the Fiscal Year Ended January 2, 2022 Numerator: Net income (loss) attributable to controlling interest $ (24,937) $ (392) $ 20,555 Denominator: Weighted average Class A Common Stock shares, basic 81,081,458 80,093,094 76,677,981 Dilutive securities included in diluted earnings per share calculation Warrants — — 3,316,122 RSUs — — 1,055,003 PSUs — — 32,256 Stock options — — 8,867 Total dilutive weighted average shares 81,081,458 80,093,094 81,090,229 Basic earnings per share $ (0.31) $ — $ 0.26 Diluted earnings per share $ (0.31) $ — $ 0.25 Weighted average Class V Common Stock not subject to earnings per share calculation 59,349,000 59,349,000 60,063,286 Net loss attributable to noncontrolling interest $ 15,095 $ 13,649 12,557 The diluted earnings per share computation excludes the effect of certain RSUs and Options granted to directors and management which convert into, or are exercisable for, shares of Class A Common Stock upon vesting as their inclusion would have been anti-dilutive. Anti-dilutive securities excluded from diluted earnings per share calculation:(in thousands) For the Fiscal Year Ended December 31, 2023 For the Fiscal Year Ended January 1, 2023 For the Fiscal Year Ended January 2, 2022 Warrants 1,882,627 1,888,256 — RSUs 271,330 83,261 — PSUs 125,958 62,408 — Shares of the Company’s Class V Common Stock do not participate in earnings or losses of the Company and, therefore, are not participating securities. The PSUs, RSUs granted to our directors and certain employees in fiscal year 2020, and 2020 LTIP RSUs were not considered participating securities despite the holders of these stock-based compensation awards being entitled to participate in dividends declared on Class A Common Stock, if and when declared, on a one-to-one per-share basis, because the dividends are only payable upon full vesting of the awards, and as such, the dividend is forfeitable. At both December 31, 2023 and January 1, 2023, the Continuing Members held all 59,349,000 shares of Class V Common Stock issued and outstanding and also held an equal number of common limited liability company units of UBH, which comprise the noncontrolling interest. The net loss attributable to the noncontrolling interest was $15.1 million for the fiscal year ended December 31, 2023, $13.6 million for the fiscal year ended January 1, 2023, and net loss attributable to non-controlling interest of $12.6 million for the fiscal year ended January 2, 2022, respectively.9720.SUBSEQUENT EVENTSOn February 5, 2024, the Company sold certain assets and brands to affiliates of Our Home™, an operating company of Better-for-You brands (“Our Home”). Under the agreement, affiliates of Our Home agreed to purchase the Good Health® and R.W. Garcia® brands, the Lincolnton, NC, and Lititz, PA manufacturing facilities and certain related assets, and assume the Company’s Las Vegas, NV facility lease and manufacturing operations.In addition, the Company and Our Home will operate under a Transition Services Agreement for 12 months. The total consideration for the transactions is $182.5 million, subject to customary adjustments. In addition, post-closing, the parties will operate under reciprocal co-manufacturing agreements under which Our Home will co-manufacture certain of the Company's products and the Company will co-manufacture certain Good Health® products. Certain Good Health® products will continue to be distributed and sold on the Company's DSD network for Our Home. At this time, the Company cannot estimate the impact of this transaction on its consolidated financial statements.Item 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureNone.Item 9A. Controls and ProceduresEvaluation of Disclosure Controls and ProceduresWe have established disclosure controls and procedures (as defined in Rules 13a-15e) of the Exchange Act, that are designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that information relating to the Initial Public Offering basedCompany is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Based on that evaluation, the redemption dateChief Executive Officer and Chief Financial Officer have concluded that our current disclosure controls and procedures are effective at a level of reasonable assurance.Management’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over our financial reporting, as defined in Exchange Act Rule 13a-15(f). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the “fair market value”preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the Class A ordinary shares, upon a minimum of 30 days’ prior written notice of redemption and if, and only if, the last sale priceassets of the Class A ordinary shares equals or exceeds $10.00 per share (as adjusted per share splits, share dividends, reorganizations, recapitalizationsCompany; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and the like) on the trading day prior to the date on whichthat receipts and expenditures of the Company sends the noticeare being made only in accordance with authorizations of redemption to the Public Warrant holders. The “fair market value”management and directors of the Class A ordinary shares is the average last reported sale priceCompany; and (iii) provide reasonable assurance regarding prevention or timely detection of the Class A ordinary shares for the 10 trading days ending on the third trading day prior to the date on which the noticeunauthorized acquisition, use, or disposition of redemption is sent to the holders of warrants.If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.The exercise price and number of Class A ordinary shares issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share capitalization, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of Class A ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants shares. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.NOTE 7. FAIR VALUE MEASUREMENTSThe following table presents information about the Company’s assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are measured at fair valuesubject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.Management, with the participation of the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our internal control over financial reporting based on a recurring basiscriteria established in Internal Control – Integrated Framework (2013) by the Committee of Sponsoring Organization of the Treadway Commission. Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2018 and indicates the fair value hierarchy2023. The effectiveness of the valuation techniques that the Company utilized to determine such fair value. Quoted Prices Significant Other Significant Other in Active Markets Observable Inputs Unobservable Inputs Description (Level 1) (Level 2) (Level 3) Money market funds $ 442,048,296 $ - $ - None of the balance in the Trust Account was held in cashCompany’s internal control over financial reporting as of December 31, 2018.NOTE 8. SUBSEQUENT EVENTSAttestation Report of the Registered Public Accounting FirmThe Company's internal control over financial reporting as of December 31, 2023 has been audited by Grant Thornton LLP, an independent registered public accounting firm, as stated in their report which is included in Item 8 of this Annual Report on Form 10-K.98Changes in Internal Control Over Financial ReportingThere was no other change in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during its most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.Item 9B. Other InformationDuring the three months ended December 31, 2023, no director or officer of the Company evaluated subsequent eventsadopted or terminated a ‘Rule 10b5-1 trading arrangement’ or ‘non-Rule 10b5-1 trading arrangement,’ as each term is defined in Item 408(a) of Regulation S-KItem 9C. Disclosure Regarding Foreign Jurisdictions that Prevent InspectionsNot applicable99PART IIIItem 10. Directors, Executive Officers and transactions that occurredCorporate GovernanceThe information required by this item with respect to our executive officers and directors is provided below. Other information required by this item will be set forth in our definitive Proxy Statement for our 2024 Annual Meeting of Stockholders (our “2024 Proxy Statement”) under the captions “Executive Officers of Utz Brands, Inc.” “Corporate Governance” and "Delinquent Section 16(a) Reports” to be filed within 120 days after the balance sheet date upend of the fiscal year covered by this Annual Report on Form 10-K, and is incorporated herein by reference to the date financial statements were availableour 2024 Proxy Statement, which is to be issued. Based uponfiled within 120 days after the end of the fiscal year covered by this review,Annual Report on Form 10-K.The information regarding executive officers of the Company didrequired by Item 401 of SEC Regulation S-K will be located in our 2024 Proxy Statement in the section entitled “Executive Officersof Utz Brands, Inc.” which information is incorporated herein by referenceThe information required by Item 401 of SEC Regulation S-K concerning the directors and nominees for director of the Company, together with a discussion of the specific experience, qualifications, attributes and skills that led the Board to conclude that the director or nominee should serve as a director at this time, will be located in our 2024 Proxy Statement in the section entitled “Proposal No. 1 – Election of Directors,” which information is incorporated herein by reference.Information regarding the identification of the Audit Committee as a separately-designated standing committee of the Board and information regarding the status of one or more members of the Audit Committee as an “audit committee financial expert” will be located in our 2024 Proxy Statement in the section entitled "Committees and Meetings of the Board – Board Committees,” which information is incorporated herein by reference.Information regarding our Business Code of Conduct and Ethics applicable to our directors, officers and associates will be located in our 2024 Proxy Statement in the Section entitled “Corporate Governance―Corporate Governance Policies―Code of Ethics,”) which information is incorporated herein by reference.Item 11. Executive CompensationInformation concerning executive compensation will be located in our 2024 Proxy Statement in the section entitled, “Executive and Director Compensation,” which information is incorporated herein by reference.Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersInformation concerning ownership of our voting securities by certain beneficial owners, individual nominees for director, the named executive officers, including persons serving as our Chief Executive Officer and Chief Financial Officer, and directors and executive officers as a group, will be located in our 2024 Proxy Statement in the section entitled "Security Ownership of Certain Beneficial Owners and Management,” which information is incorporated herein by reference.Information regarding all of the Company’s equity compensation plans will be located in our 2024 Proxy Statement in the section entitled “Executive and Director Compensation ―Equity Compensation Plan Information,” which information is incorporated herein by reference to our 2024 Proxy Statement, which is to be filed within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.Item 13. Certain Relationships and Related Transactions, and Director IndependenceInformation required by this Item 13 will be included under the heading "Related Party Transactions - Transactions with Related Persons” and "Corporate Governance - Director Independence" in our 2024 Proxy Statement, which is to be filed within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K. This information is incorporated by reference into this Annual Report on Form 10-K.Item 14. Principal Accounting Fees and ServicesInformation required by this Item 14 will be included under the heading "Audit, Audit-Related, Tax and All Other Fees” in our 2024 Proxy Statement, which is to be filed within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K. This information is incorporated by reference into this Annual Report on Form 10-K.Part IV100Item 15. Exhibits, Financial Statement Schedules(a) Documents filed as part of the report1.Financial StatementsThe following Consolidated Financial Statements of Utz Brands, Inc. and the Reports of the Independent Registered Public Accounting Firm are included in Part II, Item 8 of this Annual Report on Form 10-K.Index to the Financial Statements Page 2. Financial Statement SchedulesAll financial statement schedules have been omitted as the information is not identify any subsequent events that would have required adjustmentunder the related instruction or disclosureis not applicable or because the information required is already included in the financial statements or the notes to those financial statements.1013. ExhibitsThe exhibits to this report are listed in the exhibit index below.(b) ExhibitsThe following exhibits are being filed herewith:F-16Exhibit Number Exhibit Description 102103101.INS* XBRL Instance Document. 101.SCH* XBRL Taxonomy Extension Schema Document. 101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document. 101.DEF* XBRL Taxonomy Extension Definition Linkbase Document. 101.LAB* XBRL Taxonomy Extension Label Linkbase Document. 101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) * Filed herewith ** Furnished herewith + Indicates a management or compensatory plan. † Schedules to this exhibit have been omitted pursuant to Item 601(a)(5) of Registration S-K. The Registrant hereby agrees to furnish a copy of any omitted schedules to the SEC upon request. Item 16. Form 10-K SummaryNone.104SIGNATURESPursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.Date: February 29, 2024 UTZ BRANDS, INC.By: /s/ Ajay KatariaName: Ajay KatariaTitle:Executive Vice President, Chief Financial OfficerEach person whose individual signature appears below hereby authorizes and appoints Howard Friedman, Ajay Kataria, and Theresa Shea, and each of them, with full power of substitution and resubstitution and full power to act without the other, as his or her true and lawful attorney-in-fact and agent to act in his or her name, place and stead and to execute in the name and on behalf of each person, individually and in each capacity stated below, and to file any and all amendments to this annual report on Form 10-K and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing, ratifying and confirming all that said attorneys-in-fact and agents or any of them or their or his or her substitute or substitutes may lawfully do or cause to be done by virtue thereof.Pursuant to the requirements of Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.105Signature Title Date /s/ Howard Friedman Director and Chief Executive Officer February 29, 2024 Howard Friedman (Principal Executive Officer) Date /s/ Ajay Kataria Executive Vice President, Chief Financial Officer February 29, 2024 Ajay Kataria (Principal Financial Officer & Principal Accounting Officer) Date /s/ Dylan B. Lissette Chairman; Director February 29, 2024 Dylan B. Lissette Date /s/ Roger K. Deromedi Lead Independent Director February 29, 2024 Roger K. Deromedi Date /s/ Michael W. Rice Director; Chairman Emeritus; Special Adviser February 29, 2024 Michael W. Rice Date /s/ Craig D. Steeneck Director; Chair, Audit Committee February 29, 2024 Craig D. Steeneck Date /s/ John W. Altmeyer Director; Chair, Nominating and Corporate Governance Committee February 29, 2024 John W. Altmeyer Date /s/ Timothy P. Brown Director February 29, 2024 Timothy P. Brown Date /s/ Christine Choi Director February 29, 2024 Christine Choi Date /s/ Antonio F. Fernandez Director February 29, 2024 Antonio F. Fernandez Date /s/ Jason K. Giordano Director; Chair, Compensation Committee February 29, 2024 Jason K. Giordano Date /s/ B. John Lindeman Director February 29, 2024 B. John Lindeman Date /s/ Pamela Stewart Director February 29, 2024 Pamela Stewart Date 106