☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2020
OR
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 | 001-38686 | 85-2751850 | ||||||||||||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
200 Park Avenue, 58th Floor
New York, New York 10166
Not Applicable
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Class A Common Stock, par value $0.0001 per share | UTZ | New York Stock Exchange |
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◻
Large accelerated filer | Accelerated filer | ||||||||||
Non-accelerated filer | Smaller reporting company | ||||||||||
Emerging growth company |
☐
Securities registered pursuant to Section 12(b) of the Act:
⌧
COLLIER CREEK HOLDINGS
For unless otherwise noted “the Company”, “we”, “us”, “our”, "Successor", "UBI" and “Utz” refer to Utz Brands, Inc. and its consolidated subsidiaries. The Predecessor refers to Utz Brands Holdings, LLC ("UBH" or the Quarter Ended March 31, 2020
Table"Predecessor"), which closed the Business Combination with the Company on August 28, 2020.
March 31, 2020 | December 31, 2019 | |||||||
(Unaudited) | ||||||||
Assets: | ||||||||
Current assets: | ||||||||
Cash | $ | 585,123 | $ | 585,253 | ||||
Prepaid expenses | 154,625 | 136,313 | ||||||
Total current assets | 739,748 | 721,566 | ||||||
Marketable securities held in Trust Account | 452,430,869 | 451,020,841 | ||||||
Total Assets | $ | 453,170,617 | $ | 451,742,407 | ||||
Liabilities and Shareholders' Equity: | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 161,579 | $ | 11,654 | ||||
Accrued expenses | 1,514,828 | 444,337 | ||||||
Accrued expenses - related parties | 176,774 | 146,774 | ||||||
Total current liabilities | 1,853,181 | 602,765 | ||||||
Deferred underwriting commissions and legal fees | 15,450,000 | 15,450,000 | ||||||
Total Liabilities | 17,303,181 | 16,052,765 | ||||||
Commitments | ||||||||
Class A ordinary shares, $0.0001 par value; 41,913,174 and 42,018,501 shares subject to possible redemption at $10.28 and $10.25 per share at March 31, 2020 and December 31, 2019, respectively | 430,867,428 | 430,689,635 | ||||||
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; 2,086,826 and 1,981,499 shares issued and outstanding (excluding 41,913,174 and 42,018,501 shares subject to possible redemption) at March 31, 2020 and December 31, 2019, respectively | 209 | 198 | ||||||
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 11,875,000 shares issued and outstanding as of March 31, 2020 and December 31, 2019 | 1,188 | 1,188 | ||||||
Additional paid-in capital | - | - | ||||||
Retained earnings | 4,998,611 | 4,998,621 | ||||||
Total Shareholders' Equity | 5,000,008 | 5,000,007 | ||||||
Total Liabilities and Shareholders' Equity | $ | 453,170,617 | $ | 451,742,407 |
As of April 4, 2021 | As of January 3, 2021 | |||||||||||||
(Unaudited) | (as restated) | |||||||||||||
ASSETS | ||||||||||||||
Current Assets | ||||||||||||||
Cash and cash equivalents | $ | 4,020 | $ | 46,831 | ||||||||||
Accounts receivable, less allowance of $739 and $239, respectively | 130,599 | 118,305 | ||||||||||||
Inventories | 67,584 | 59,810 | ||||||||||||
Prepaid expenses and other assets | 12,276 | 11,573 | ||||||||||||
Current portion of notes receivable | 5,918 | 7,666 | ||||||||||||
Total current assets | 220,397 | 244,185 | ||||||||||||
Non-current Assets | ||||||||||||||
Property, plant and equipment, net | 262,999 | 270,416 | ||||||||||||
Goodwill | 880,063 | 862,183 | ||||||||||||
Intangible assets, net | 1,167,268 | 1,171,709 | ||||||||||||
Non-current portion of notes receivable | 22,348 | 20,000 | ||||||||||||
Other assets | 14,160 | 15,671 | ||||||||||||
Total non-current assets | 2,346,838 | 2,339,979 | ||||||||||||
Total assets | $ | 2,567,235 | $ | 2,584,164 | ||||||||||
LIABILITIES AND EQUITY | ||||||||||||||
Current Liabilities | ||||||||||||||
Current portion of term debt | $ | 7,500 | $ | 469 | ||||||||||
Current portion of other notes payable | 8,142 | 9,018 | ||||||||||||
Accounts payable | 64,214 | 57,254 | ||||||||||||
Accrued expenses and other | 49,585 | 80,788 | ||||||||||||
Current warrant liability | 0 | 52,580 | ||||||||||||
Total current liabilities | 129,441 | 200,109 | ||||||||||||
Non-current portion of term debt and revolving credit facility | 718,443 | 778,000 | ||||||||||||
Non-current portion of other notes payable | 25,418 | 24,564 | ||||||||||||
Non-current accrued expenses and other | 37,483 | 37,771 | ||||||||||||
Deferred tax liability | 74,847 | 73,786 | ||||||||||||
Non-current warrant liability | 104,400 | 85,032 | ||||||||||||
Total non-current liabilities | 960,591 | 999,153 | ||||||||||||
Total liabilities | 1,090,032 | 1,199,262 | ||||||||||||
Commitments and Contingencies | 0 | 0 | ||||||||||||
Equity | ||||||||||||||
Shares of Class A Common Stock, $0.0001 par value; 1,000,000,000 shares authorized; 76,481,833 and 71,094,714 shares issued and outstanding as of April 4, 2021 and January 3, 2021, respectively. | 7 | 7 | ||||||||||||
Shares of Class V Common Stock, $0.0001 par value; 61,249,000 shares authorized; 60,349,000 shares issued and outstanding as of April 4, 2021 and January 3, 2021. | 6 | 6 | ||||||||||||
Additional paid-in capital | 941,003 | 793,461 | ||||||||||||
Accumulated deficit | (264,019) | (241,490) | ||||||||||||
Accumulated other comprehensive income | 1,746 | 924 | ||||||||||||
Total stockholders' equity | 678,743 | 552,908 | ||||||||||||
Noncontrolling interest | 798,460 | 831,994 | ||||||||||||
Total equity | 1,477,203 | 1,384,902 | ||||||||||||
Total liabilities and equity | $ | 2,567,235 | $ | 2,584,164 |
(UNAUDITED)
For the Three Months Ended March 31, | ||||||||
2020 | 2019 | |||||||
General and administrative expenses | $ | 1,232,234 | $ | 159,706 | ||||
Loss from operations | (1,232,234 | ) | (159,706 | ) | ||||
Investment income on Trust Account | 1,410,028 | 2,461,634 | ||||||
Net income | $ | 177,794 | $ | 2,301,928 | ||||
Weighted average shares outstanding of Class A ordinary shares | 44,000,000 | 44,000,000 | ||||||
Basic and diluted net income per share, Class A | $ | 0.03 | $ | 0.06 | ||||
Weighted average shares outstanding of Class B ordinary shares | 11,875,000 | 11,875,000 | ||||||
Basic and diluted net loss per share, Class B | $ | (0.10 | ) | $ | (0.01 | ) |
AND COMPREHENSIVE INCOME (LOSS)
Successor | Predecessor | |||||||||||||
Thirteen weeks ended April 4, 2021 | Thirteen weeks ended March 29, 2020 | |||||||||||||
Net sales | $ | 269,182 | $ | 228,029 | ||||||||||
Cost of goods sold | 173,941 | 148,015 | ||||||||||||
Gross profit | 95,241 | 80,014 | ||||||||||||
Selling, general and administrative expenses | ||||||||||||||
Selling | 56,728 | 48,333 | ||||||||||||
General and administrative | 29,933 | 19,940 | ||||||||||||
Total selling, general and administrative expenses | 86,661 | 68,273 | ||||||||||||
Gain on sale of assets | ||||||||||||||
Gain on disposal of property, plant and equipment | 297 | 68 | ||||||||||||
Gain on sale of routes, net | 422 | 404 | ||||||||||||
Total gain on sale of assets | 719 | 472 | ||||||||||||
Income from operations | 9,299 | 12,213 | ||||||||||||
Other (expense) income | ||||||||||||||
Interest expense | (10,861) | (9,643) | ||||||||||||
Other income | 718 | 580 | ||||||||||||
Loss on remeasurement of warrant liability | (21,501) | 0 | ||||||||||||
Other (expense) income, net | (31,644) | (9,063) | ||||||||||||
(Loss) income before taxes | (22,345) | 3,150 | ||||||||||||
Income tax expense | 1,004 | 1,458 | ||||||||||||
Net (loss) income | (23,349) | 1,692 | ||||||||||||
Net loss attributable to noncontrolling interest | 820 | 0 | ||||||||||||
Net (loss) income attributable to controlling interest | $ | (22,529) | $ | 1,692 | ||||||||||
Earnings per Class A Common stock: (in dollars) | ||||||||||||||
Basic & diluted | $ | (0.30) | ||||||||||||
Weighted-average shares of Class A Common stock outstanding | ||||||||||||||
Basic & diluted | 75,927,005 | |||||||||||||
Other comprehensive income (loss): | ||||||||||||||
Interest rate swap | $ | 822 | $ | (7,208) | ||||||||||
Comprehensive loss | $ | (21,707) | $ | (5,516) |
(UNAUDITED)
For the Three Months Ended March 31, 2020 | ||||||||||||||||||||||||||||
Ordinary Shares | Total | |||||||||||||||||||||||||||
Class A | Class B | Additional Paid-In | Retained | Shareholders' | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Earnings | Equity | ||||||||||||||||||||||
Balance - December 31, 2019 | 1,981,499 | $ | 198 | 11,875,000 | $ | 1,188 | $ | - | $ | 4,998,621 | $ | 5,000,007 | ||||||||||||||||
Class A ordinary shares subject to possible redemption | 105,327 | 11 | - | - | - | (177,804 | ) | (177,793 | ) | |||||||||||||||||||
Net income | - | - | - | - | - | 177,794 | 177,794 | |||||||||||||||||||||
Balance - March 30, 2020 (unaudited) | 2,086,826 | $ | 209 | 11,875,000 | $ | 1,188 | $ | - | $ | 4,998,611 | $ | 5,000,008 |
For the three months ended March 31, 2019 | ||||||||||||||||||||||||||||
Ordinary Shares | Total | |||||||||||||||||||||||||||
Class A | Class B | Additional Paid-In | Retained | Shareholders' | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Earnings | Equity | ||||||||||||||||||||||
Balance - December 31, 2018 | 1,938,774 | $ | 194 | 11,875,000 | $ | 1,188 | $ | 3,087,484 | $ | 1,911,142 | $ | 5,000,008 | ||||||||||||||||
Class A ordinary shares subject to possible redemption | (19,690 | ) | (2 | ) | - | - | (2,301,928 | ) | - | (2,301,930 | ) | |||||||||||||||||
Net income | - | - | - | - | - | 2,301,928 | 2,301,928 | |||||||||||||||||||||
Balance - March 31, 2019 (unaudited) | 1,919,084 | $ | 192 | 11,875,000 | $ | 1,188 | $ | 785,556 | $ | 4,213,070 | $ | 5,000,006 |
(DEFICIT)
Predecessor | Members' (Deficit) Equity | Accumulated Other Comprehensive (Loss) Income | Noncontrolling Interest | Total (Deficit) Equity | ||||||||||||||||||||||
Balance at December 29, 2019 | $ | (27,446) | $ | 1,408 | $ | (7,314) | $ | (33,352) | ||||||||||||||||||
Net income | 1,692 | — | — | 1,692 | ||||||||||||||||||||||
Other comprehensive loss | — | (7,208) | — | (7,208) | ||||||||||||||||||||||
Merger of noncontrolling interest | (7,314) | — | 7,314 | — | ||||||||||||||||||||||
Distributions to members | (2,657) | — | — | (2,657) | ||||||||||||||||||||||
Balance at March 29, 2020 | $ | (35,725) | $ | (5,800) | $ | — | $ | (41,525) |
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 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Successor | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at January 3, 2021 (as restated) | 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 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | 410,402 | — | — | 2,883 | — | — | 2,883 | — | 2,883 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | (22,529) | — | (22,529) | (820) | (23,349) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | 822 | 822 | — | 822 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at April 4, 2021 | 76,481,833 | $ | 7 | 60,349,000 | $ | 6 | $ | 941,003 | $ | (264,019) | $ | 1,746 | $ | 678,743 | $ | 798,460 | $ | 1,477,203 |
(UNAUDITED)
For the Three Months Ended March 31, | ||||||||
2020 | 2019 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net income | $ | 177,794 | $ | 2,301,928 | ||||
Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
Investment income on Trust Account | (1,410,028 | ) | (2,461,634 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses | (18,312 | ) | (9,768 | ) | ||||
Accounts payable | 149,925 | (91,692 | ) | |||||
Accrued expenses | 1,070,491 | 25,157 | ||||||
Accrued expenses - related parties | 30,000 | 30,000 | ||||||
Net cash used in operating activities | (130 | ) | (206,009 | ) | ||||
Net decrease in cash | (130 | ) | (206,009 | ) | ||||
Cash - beginning of the period | 585,253 | 944,890 | ||||||
Cash - end of the period | $ | 585,123 | $ | 738,881 | ||||
Supplemental disclosure of noncash financing activities: | ||||||||
Change in value of Class A ordinary shares subject to possible redemption | $ | 177,793 | $ | 2,301,930 |
Successor | Predecessor | |||||||||||||
Thirteen weeks ended April 4, 2021 | Thirteen weeks ended March 29, 2020 | |||||||||||||
Cash flows from operating activities | ||||||||||||||
Net (loss) income | $ | (23,349) | $ | 1,692 | ||||||||||
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||||||||||||||
Depreciation and amortization | 19,407 | 8,912 | ||||||||||||
Loss on remeasurement of warrant liability | 21,501 | 0 | ||||||||||||
Gain on disposal of property and equipment | (297) | (68) | ||||||||||||
Gain on sale of routes | (422) | (404) | ||||||||||||
Stock based compensation | 2,883 | 0 | ||||||||||||
Deferred taxes | 1,061 | 975 | ||||||||||||
Deferred financing costs | 2,870 | 653 | ||||||||||||
Changes in assets and liabilities: | ||||||||||||||
Accounts receivable, net | (11,176) | (15,374) | ||||||||||||
Inventories | (7,040) | 2,676 | ||||||||||||
Prepaid expenses and other assets | 866 | (618) | ||||||||||||
Accounts payable and accrued expenses and other | (19,487) | (1,217) | ||||||||||||
Net cash used in operating activities | (13,183) | (2,773) | ||||||||||||
Cash flows from investing activities | ||||||||||||||
Acquisitions, net of cash acquired | (25,189) | (8,789) | ||||||||||||
Purchases of property and equipment | (2,134) | (3,556) | ||||||||||||
Purchases of intangibles | (1,200) | (650) | ||||||||||||
Proceeds from sale of property and equipment | 391 | 152 | ||||||||||||
Proceeds from sale of routes | 1,450 | 1,159 | ||||||||||||
Proceeds from the sale of IO notes | 2,295 | 0 | ||||||||||||
Notes receivable, net | (924) | (2,780) | ||||||||||||
Net cash used in investing activities | (25,311) | (14,464) | ||||||||||||
Cash flows from financing activities | ||||||||||||||
Line of credit borrowings, net | 15,000 | 10,000 | ||||||||||||
Borrowings on term debt and notes payable | 720,000 | 2,650 | ||||||||||||
Repayments on term debt and notes payable | (783,735) | (2,178) | ||||||||||||
Payment of debt issuance cost | (8,372) | 0 | ||||||||||||
Exercised warrants | 57,232 | 0 | ||||||||||||
Dividends | (4,261) | 0 | ||||||||||||
Distributions to members | 0 | (2,657) | ||||||||||||
Distribution to noncontrolling interest | (181) | 0 | ||||||||||||
Net cash (used in) provided by financing activities | (4,317) | 7,815 | ||||||||||||
Net decrease in cash and cash equivalents | (42,811) | (9,422) | ||||||||||||
Cash and cash equivalents at beginning of period | 46,831 | 15,053 | ||||||||||||
Cash and cash equivalents at end of period | $ | 4,020 | $ | 5,631 |
All activity for the period from April 30, 2018 (inception) through March 31,
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 Offeringacquisition of 44,000,000certain limited liability company units (the “Units” and, with respect toof UBH, the Class A ordinary shares included in the Units being offered, the “Public Shares”parent of Utz Quality Foods, LLC (“UQF”), 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 (Note 3),a new issuance by UBH 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 warrantpurchases from UBH’s existing equity holders pursuant 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 Agreement, dated as of June 5, 2020 (the “Business Combination Agreement”) among CCH, UBH and (ii)Series U of UM Partners, LLC (“Series U”) and Series R of UM Partners, LLC (“Series R” and together with Series U, the distribution of“Continuing Members”) (the Domestication and the funds in 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 the Trust Account) 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.
The 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 approvetransactions contemplated by the Business Combination or (ii) by meansAgreement, collectively, the “Business Combination”), following the approval at the extraordinary general meeting of a tender offer.the shareholders of CCH held on August 27, 2020. The decision as to whetherNoncontrolling interest represents the Company will seek shareholder approvalcommon limited liability company units of a Business Combination or conduct a tender offer will be madeUBH held by the Company, solely in its discretion. Continuing Members.
COLLIER CREEK HOLDINGS
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
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”)), 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, or October 10, 2020 (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.
In 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 its pro rata portion of the amount then in the Trust Account, including 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 5) 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 the 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.
COLLIER CREEK HOLDINGS
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Going Concern Consideration
The accompanying unaudited condensed financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As ofMarch 31, 2020, the Company had approximately $585,000 in cash and working capital deficit of approximately $1.1 million. 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 the Company’s officers and directors may, but are not obligated to, loan the Company Working Capital Loans (as defined in Note 4) as may be required. As of March 31, 2020, there were no amounts outstanding under any Working Capital Loan.
The Company’s liquidity needsPredecessor, prior to the Initial Public Offering were satisfied through receiptBusiness Combination, which was determined to be consolidated UBH, which includes the accounts of a $25,000 capital contribution from the Sponsor in exchange for the issuance of the Founder Shares (as defined below)its wholly-owned subsidiary, Utz Quality Foods, LLC (“UQF”). UQF is consolidated with its wholly-owned subsidiaries: UTZTRAN, LLC; Heron Holding Corporation (“Heron”), with its wholly-owned subsidiaries Golden Flake Snack Foods, Inc. (“Golden Flake”), Inventure Foods, Inc. and its subsidiaries (“Inventure Foods”), and $155,000 in loans available from the Sponsor under a promissory note (the “Note”Kitchen Cooked Inc. (“Kitchen Cooked”); Kennedy Endeavors, LLC (“Kennedy”); and GH Pop Holdings, LLC, with its wholly-owned subsidiaries Good Health Natural Products, LLC (“Good Health”), Condor Snack Foods, LLC, and Snikiddy, LLC (“Snikiddy”). The Company fully repaid the Note on October 17, 2018, after the closing of the Initial Public Offering. The Company’s liquidity needs for
In connection with the Company’s assessment of going concern considerations in accordance with thePreviously Issued Condensed Consolidated Financial Accounting Standard Board’s ‘(“FASB”) Accounting Standards Update 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the Company’s liquidity position, mandatory liquidation and subsequent dissolution raise substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate and dissolve after October 10, 2020.
Basis of presentation
Statements
– TheCOLLIER CREEK HOLDINGS
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The accompanying unaudited condensed financial statementsnotes included herein should be read in conjunction with the Company's restated audited consolidated financial statements and notes thereto included in the Company’sCompany's Annual Report on Form 10-K10-K/A filed by the Company with the SEC on May 13, 2021 (the "2020 Form 10-K/A").
Use
snack food products since 1921. The preparationCompany 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 most regions of the financial statements in conformityUnited States through routes to market that include direct-store-delivery, 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.
Making estimates requires management to exercise significant judgment. Itinstitutions 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.
Class A ordinary shares subject to possible redemption
triggering event.
Net Income (Loss) per Share
Net income (loss) 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.
COLLIER CREEK HOLDINGS
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The Company’s unaudited condensed statements of operations include a presentation of income (loss) per share for ordinary shares subject to redemption in a manner similar to the two-class method of income (loss) 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 of approximately $1.4 million and $2.5 million for the three months ended March 31, 2020 and 2019, respectively, by the weighted average number of Class A ordinary shares outstanding for such periods. Net loss per share, basic and diluted for Class B ordinary shares is calculated by dividing the net income, less income attributable to Class A ordinary shares, by the weighted average number of Class B ordinary shares outstanding for such periods.
Income taxes
The Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset and liability approachmethod of 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.
accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. ASC 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.
There is currently no taxation imposed on income by the Governmentan impairment of the Cayman Islands. In accordance with Cayman Islands income tax regulations, income taxesgoodwill or intangible assets.
Concentration of credit risk
Financial instruments that potentially subjectexisting snack food operations as its sole reporting unit.
Fairthat the fair value of financialgoodwill or an indefinite-lived intangible asset exceeds its carrying value then a quantitative impairment test is not required.
held by the Company include cash and cash equivalents, accounts receivable, hedging instruments, 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 are revalued at each reporting period.
COLLIER CREEK HOLDINGS
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Fair Value Measurements
Fair value is defined as the pricecommon limited liability company units that the Continuing Members retained in UBH, and a unit of limited liability company units of UBH and a share of Class V Common Stock are exchangeable for one share of Class A Common Stock of the Company, (c) were entitled to receive certain restricted common limited liability company units in UBH (the "Retained Restricted Units") that would be vested under certain market conditions, which vested as of the Closing, and (d) entered into a Tax Receivable Agreement (“TRA”) that requires the Company to pay to the Continuing Members 85% of the applicable cash savings, if any, in U.S. federal and state income tax determined based on certain attributes as defined in the TRA. In connection with the Closing, UBH and the Company converted all of the outstanding phantom unit awards issued under the Utz Quality Foods, LLC 2018 Long-Term Incentive Plan ("2018 LTIP") into restricted stock units (“2020 LTIP RSUs”) issued by the Company under the Utz Quality Foods, LLC 2020 Long-Term Incentive Plan (the "2020 LTIP"). Further discussion of the purchase consideration of the Business Combination is disclosed later in this footnote.
(in thousands) | |||||
Total cash consideration | $ | 199,161 | |||
Tax Receivable Agreement obligations to the Continuing Members(1) | 28,690 | ||||
Replaced Awards(2) | 11,175 | ||||
Continuing Members’ Retained Restricted Units in UBH(3) | 54,067 | ||||
Total purchase consideration | 293,093 | ||||
Noncontrolling interest(4) | 896,701 | ||||
Net debt assumed | 648,150 | ||||
Total business enterprise value | $ | 1,837,944 |
(in thousands) | |||||
Assets acquired: | |||||
Cash and cash equivalents | $ | 13,713 | |||
Accounts receivable, net | 119,339 | ||||
Inventory, net | 63,862 | ||||
Prepaid expenses and other assets | 6,116 | ||||
Notes receivable | 29,453 | ||||
Property, plant and equipment, net | 269,951 | ||||
Identifiable intangible assets(1) | 871,150 | ||||
Other assets | 7,086 | ||||
Total assets acquired: | 1,380,670 | ||||
Liabilities assumed: | |||||
Accounts payable | 49,531 | ||||
Accrued expenses | 78,223 | ||||
Notes payable | 34,547 | ||||
Deferred tax liability | 25,381 | ||||
Total liabilities assumed: | 187,682 | ||||
Net identifiable assets acquired | 1,192,988 | ||||
Goodwill(2) | $ | 644,956 |
Fair Value | Useful Life | |||||||||||||
(In Thousands) | (In Years) | |||||||||||||
Indefinite lived trade names | $ | 355,500 | Indefinite | |||||||||||
Finite lived trade names | 56,000 | 15 | ||||||||||||
Customer relationships | 443,500 | 25 | ||||||||||||
Technology | 43 | 5 | ||||||||||||
Master distribution rights | 2,221 | 15 | ||||||||||||
Company owned routes | 13,886 | Indefinite | ||||||||||||
Total | $ | 871,150 |
(in thousands) | |||||
Purchase consideration | $ | 403,963 | |||
Tax consideration (1) | 4,468 | ||||
Total consideration | 408,431 | ||||
Assets acquired: | |||||
Cash | 5,811 | ||||
Accounts receivable | 15,609 | ||||
Inventory, net | 2,629 | ||||
Prepaid expenses and other assets | 5,090 | ||||
Property, plant and equipment | 461 | ||||
Other assets | 1,219 | ||||
Customer relationships (2) | 225,000 | ||||
Total assets acquired: | 255,819 | ||||
Liabilities assumed: | |||||
Accounts payable | 5,702 | ||||
Accrued expenses | 4,492 | ||||
Other liabilities | 26 | ||||
Deferred tax liability | 50,855 | ||||
Total liabilities assumed: | 61,075 | ||||
Net identifiable assets acquired | 194,744 | ||||
Goodwill (3) | $ | 213,687 |
(in thousands) | As of April 4, 2021 | As of January 3, 2021 | |||||||||||||||
Finished goods | $ | 33,981 | $ | 28,935 | |||||||||||||
Raw materials | 27,544 | 25,129 | |||||||||||||||
Maintenance parts | 6,059 | 5,746 | |||||||||||||||
Total inventories | $ | 67,584 | $ | 59,810 |
(in thousands) | As of April 4, 2021 | As of January 3, 2021 | |||||||||||||||
Land | $ | 22,674 | $ | 22,750 | |||||||||||||
Buildings | 83,996 | 83,780 | |||||||||||||||
Machinery and equipment | 165,670 | 157,513 | |||||||||||||||
Land improvements | 2,226 | 2,228 | |||||||||||||||
Building improvements | 1,057 | 1,047 | |||||||||||||||
Construction-in-progress | 9,685 | 15,518 | |||||||||||||||
285,308 | 282,836 | ||||||||||||||||
Less: accumulated depreciation | (22,309) | (12,420) | |||||||||||||||
Property, plant and equipment, net | $ | 262,999 | $ | 270,416 |
Successor | |||||
(in thousands) | |||||
Balance as of Balance as of January 3, 2021 | $ | 862,183 | |||
Acquisition of Vitner's | 17,880 | ||||
Balance as of April 4, 2021 | $ | 880,063 |
(in thousands) | As of April 4, 2021 | As of January 3, 2021 | |||||||||||||||
Subject to amortization: | |||||||||||||||||
Distributor/customer relationships | $ | 671,940 | $ | 671,150 | |||||||||||||
Technology | 43 | 43 | |||||||||||||||
Trade names | 60,750 | 57,810 | |||||||||||||||
Master distribution rights | 2,221 | 2,221 | |||||||||||||||
Amortizable assets, gross | 734,954 | 731,224 | |||||||||||||||
Accumulated amortization | (17,739) | (8,268) | |||||||||||||||
Amortizable assets, net | 717,215 | 722,956 | |||||||||||||||
Not subject to amortization: | |||||||||||||||||
Trade names | 434,513 | 434,513 | |||||||||||||||
Company owned routes | 15,540 | 14,240 | |||||||||||||||
Intangible assets, net | $ | 1,167,268 | $ | 1,171,709 |
(in thousands) | As of April 4, 2021 | As of January 3, 2021 | |||||||||||||||
Accrued compensation and benefits | $ | 17,789 | $ | 36,968 | |||||||||||||
Accrued freight and manufacturing related costs | 7,013 | 6,972 | |||||||||||||||
Insurance liabilities | 7,256 | 8,100 | |||||||||||||||
Short term interest rate hedge liability | 3,009 | 3,048 | |||||||||||||||
Accrued interest | 576 | 1,220 | |||||||||||||||
Accrued sales tax | 1,300 | 1,300 | |||||||||||||||
Truco acquisition tax consideration | 4,468 | 4,468 | |||||||||||||||
Accrued distributions | 0 | 4,261 | |||||||||||||||
Other accrued expenses | 8,174 | 14,451 | |||||||||||||||
Total accrued expenses and other | $ | 49,585 | $ | 80,788 |
(in thousands) | As of April 4, 2021 | As of January 3, 2021 | |||||||||||||||
Note payable – IO notes | $ | 23,567 | $ | 23,106 | |||||||||||||
Capital lease | 8,448 | 8,967 | |||||||||||||||
Other | 1,545 | 1,509 | |||||||||||||||
Total notes payable | 33,560 | 33,582 | |||||||||||||||
Less: current portion | (8,142) | (9,018) | |||||||||||||||
Long term portion of notes payable | $ | 25,418 | $ | 24,564 |
(in thousands) | ||||||||
Fair value of warrant liabilities as of January 3, 2021 | $ | 137,612 | ||||||
Loss on remeasurement of warrant liability | 21,501 | |||||||
Reclassification of warrant liability to equity for exercised or cancelled warrants | (54,713) | |||||||
Fair value of warrant liabilities as of April 4, 2021 | $ | 104,400 |
Predecessor periods. was a fifty-three-week period and our fiscal year 2021 will end January 2, 2022 and is a fifty-two-week fiscal year. Our fiscal quarters are comprised of thirteen weeks each, except for fifty-three-week fiscal periods of which the fourth quarter is comprised of fourteen weeks, and end on the thirteenth Sunday of each quarter (fourteenth Sunday of the fourth quarter, when applicable). by reporting requirements under Section 404 of the Sarbanes-Oxley Act.ASC 820, Fair Value MeasurementDisclosures, requires all entities to discloseboth forward and spot prices for commodities. Derivative assets and liabilities included in Level 2 primarily represent commodity and interest rate swap contracts.(in thousands) Level I Level II Level III Total Assets: Cash and cash equivalents $ 4,020 $ 0 $ 0 $ 4,020 Total assets $ 4,020 $ 0 $ 0 $ 4,020 Liabilities Commodity contracts $ 0 $ 220 $ 0 $ 220 Interest rate swaps 0 4,351 0 4,351 Private placement warrants 0 104,400 0 104,400 Debt 0 725,943 0 725,943 Total liabilities $ 0 $ 834,914 $ 0 $ 834,914 (in thousands) Level I Level II Level III Total Assets: Cash and cash equivalents $ 46,831 $ 0 $ 0 $ 46,831 Total assets $ 46,831 $ 0 $ 0 $ 46,831 Liabilities Commodity contracts $ 0 $ 248 $ 0 $ 248 Interest rate swaps 0 5,163 0 5,163 Public warrants 52,580 0 0 52,580 Private placement warrants 0 85,032 0 85,032 Debt 0 778,469 0 778,469 Total liabilities $ 52,580 $ 868,912 $ 0 $ 921,492 bothaccounted for as cash flow hedges.Successor (in thousands) Gain on
Cash Flow HedgesBalance as of January 3, 2021 $ 924 Unrealized gain on cash flow hedges 822 Balance as of April 4, 2021 $ 1,746 Predecessor (in thousands) Loss on
Cash Flow HedgesBalance as of December 29, 2019 $ 1,408 Unrealized loss on cash flow hedges (7,208) Balance as of March 29, 2020 $ (5,800) liabilitiesnegative evidence to estimate whether future taxable income would be generated to permit use of the existing DTA's. As of April 4, 2021, a significant piece of objective negative evidence evaluated was the twelve-quarter 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 the investment in Utz Brands Holdings, LLC and state net operating losses where the Company does not expect to continue to have nexus. Therefore, a full valuation allowance has been recorded against the DTA's for which it is practicablemore-likely-than-not they will not be realized. 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 estimate fair value,subjective evidence such as projections for growth.defines fair valuesubject to examination by the Internal Revenue Service and the majority of the states where the Company has nexus, and tax years 2016 through 2021 remain open and subject to examination in selected states that have a longer statute of limitations.financial instrumenttax 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 April 4, 2021 and January 3, 2021, respectively.amount at which the instrument could be exchanged in a current transaction between willing parties. tax rate then applicable, among other factors.March 31, 2020April 4, 2021 and December 31, 2019,January 3, 2021, the recorded valuesCompany had a liability of cash, cash and marketable securities held$28.7 million related to its projected obligations under the TRA, which is reflected as a non-current accrued expense in the Trust Account approximateconsolidated balance sheet.(in thousands) As of April 4, 2021 As of January 3, 2021 Leases $ 9,423 $ 9,335 Less: accumulated depreciation 1,113 526 Leases, net $ 8,310 $ 8,809 fair values duedepreciation of assets held under capital leases are recognized within depreciation expense in the consolidated statements of operations and comprehensive income (loss). Rental expense for leases to third parties totaled was $2.6 million and $2.9 million for the thirteen weeks ended April 4, 2021 (Successor), and the thirteen weeks ended March 29, 2020 (Predecessor), respectively.(in thousands) 2021 Remaining $ 11,848 2022 10,750 2023 8,292 2024 5,761 2025 4,285 Thereafter 5,005 Total $ 45,941 short-term natureBusiness Combination, CCH issued 15,833,332 warrants that were initially sold by CCH in its initial public offering of the instruments.Recent Accounting PronouncementsManagement does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have an effect on the Company’s financial statements.NOTE 3.INITIAL PUBLIC OFFERINGOn October 10, 2018, the Company sold 44,000,000 Units at a purchase price of $10.00 per Unit in the Initial Public Offering,securities (the “Public Warrants”), including 4,000,000 Units1,166,666 warrants issued pursuant to the partial exercise of the underwriters’ over-allotment option. Each Unit consists of one Class A ordinary share and one-third of one redeemable warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase one Class A ordinary share at an exercise price of $11.50 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 tothose certain Forward Purchase Agreements entered into by CCH, 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 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 500,000 Founder Shares were subsequently surrendered to the Company by the Sponsor for no consideration on October 19, 2018. Of the 11,875,000 Class B ordinary shares outstanding as of March 31, 2020 and December 31, 2019, the Sponsor owned 11,680,000 Class B ordinary shares and the independent directors owned an aggregate of 195,000 Class B ordinary shares.The Founder Shares will automatically convert into Class A ordinary shares concurrently with or immediately followingCCH (the “Forward Purchase Agreements”) that were issued at the consummationClosing of athe Business Combination or earlier at the optionas part 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 connectionForward Purchase Agreement discussed below (the “Forward Purchase Warrants”), and 7,200,000 warrants initially sold to the Sponsor simultaneously with the closing of its initial public offering (the “Private Placement Warrants,” collectively, with the Public Warrants and Forward Purchase Warrants, the “Warrants”). As a result of the Business Combination, the numberCompany assumed the CCH warrants and such warrants are now exercisable for shares of UBI Class A Common Stock instead of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, 20%CCH. All other features 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, bywarrants remain unchanged. On December 14, 2020, the Company in connection with or in relationprovided notice to the consummationholders of the initial Business Combination (including the Forward Purchase Shares, but not thePublic Warrants and 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, orthat their warrants would be redeemed in accordance with the original terms on January 14, 2021. As of April 4, 2021, all Public Warrants of 7,466,666 and Forward Purchase Warrants of 1,166,666 have been exercised. Prior to be issued, to any seller in the initial Business CombinationJanuary 3, 2021, 10,825,664 Public Warrants and any Private PlacementForward Purchase Warrants issued to the Sponsor upon conversionwere exercised. As of Working Capital Loans, provided that such conversion of Founder Shares will never occur on a less than one-for-one basis.11COLLIER CREEK HOLDINGSNOTES TO UNAUDITED CONDENSED 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 the Company completes 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 soldApril 4, 2021, there were 7,200,000 Private Placement Warrants to the Sponsor at $1.50 per warrant, generating gross proceedsoutstanding. As 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 net proceeds from the InitialJanuary 3, 2021, there were 4,575,645 Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, theWarrants, 432,000 Forward Purchase Warrants, and 7,200,000 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, 2019 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.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 the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (the “Working Capital Loans”). If the Company completes a Business Combination, it would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. In the event that a Business Combination does not close, the Company 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, to date, the terms of the Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Company has no borrowings to date under this arrangement.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 $30,000 in general and administrative expenses in connection with this administrative services agreement in each of the accompanying statements of operations during the three months ended March 31, 2020 and 2019. As of March 31, 2020 and December 31, 2019, the Company has accrued approximately $177,000 and $147,000, respectively, for services in connection with such agreement on the accompanying balance sheets.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 to fund 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.
outstanding.12COLLIER CREEK HOLDINGSNOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTSNOTE 5.COMMITMENTS & CONTINGENCIESRegistration Rights holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversionthe shares of Working Capital Loans (and any Class A ordinary sharesCommon Stock 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.Deferred Underwriting FeesPursuant to the Company’s Initial Public Offering, 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.Risk and UncertaintiesManagement is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company's financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.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 ordinary shares are entitled to one vote for each share. As of March 31, 2020 and December 31, 2019, there were 44,000,000 Class A ordinary shares issued and outstanding, including 41,913,174 and 42,018,501 Class A ordinary shares subject to possible redemption, respectively.13COLLIER CREEK HOLDINGSNOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTSClass B Ordinary Shares — The Company is authorized to issue 50,000,000 Class B ordinary shares with a par value of $0.0001 per share. Holders of the Company’s Class B ordinary shares are entitled to one vote for each share. On May 2, 2018, 2,875,000 Class B ordinary shares were issued and outstanding. On September 7, 2018, the Company effected a share capitalization resulting in 10,937,500 Class B ordinary shares outstanding. On October 4, 2018, the Company effected a share capitalization resulting in 12,375,000 Class B ordinary shares outstanding. On October 10, 2018, the underwriters partially exercised the over-allotment option, and 500,000 Founder Shares were surrendered to the Company by the Sponsor for no consideration on October 19, 2018. As of March 31, 2020 and December 31, 2019, there were 11,875,000 Class B ordinary shares outstanding.The Class B ordinary shares will automatically convert into Class A ordinary shares on the first business day following the consummation of the 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 the initial Business Combination, 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, 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 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 shares with a par value of $0.0001 per share. At March 31, 2020 and December 31, 2019, 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 case that the Company has an effective registration statement under the Securities Act covering the Class A ordinary shares issuable upon exercise 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 completion of a Business Combination or earlier upon redemption or liquidation.The Private Placement Warrants are identical to the Public Warrants underlying 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 athe Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants are exercisable on a cashless basis, at the holder’s option, and are non-redeemable by the Company 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.14COLLIER CREEK HOLDINGSNOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTSmay callis taking necessary preventive actions and implementing additional measures to protect its warrants for redemption (except with respectemployees who are working on site. Generally, producers of food products, including salty snacks, have been deemed “essential industries” by federal, state, and local governments and are exempt from certain COVID-19-related restrictions on business operations. The Company continues to the Private Placement Warrants):•in wholemonitor customer and consumer demands, and intends to adapt its plans as needed to continue to meet these demands. The event is still ongoing, 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 itsis in the process of evaluating the financial impact.warrants (except with respect toon April 4, 2021 and January 3, 2021, respectively. Upon the Private Placement Warrants) in whole and not in part, forClosing of the numberBusiness Combination, all shares of CCH Class A ordinary shares, determined by referenceincluding 3,500,000 Forward Purchase Class A Ordinary Shares of CCH that were issued at the Closing of the Business Combination as part of the Forward Purchase Agreement discussed below, and Class B ordinary shares, less shareholder redemptions, were converted on a one-for-one basis into shares of Class A Common Stock, including 2,000,000 shares of Class B Common Stock initially issued to the table set forth inSponsor, which immediately vested upon the Company’s prospectus relatingClosing of the Business Combination and converted into shares of Class A Common Stock of the Company.Initial Public Offering based onContinuing Members in connection with the redemption dateClosing of the Business Combination, as described in Note 2, “Acquisitions”. 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 described in Note 2. “Acquisitions”. As of April 4, 2021 and January 3, 2021, there were 60,349,000 shares of Class V Common Stock outstanding.“fair market value”Closing of the Business Combination and pursuant to a Forward Purchase Agreement entered into between CCH, CCH’s Sponsor, and CCH’s independent directors, CCH consummated the sale and issuance of 3,500,000 shares issued pursuant to the Forward Purchase Agreements and Forward Purchase Warrants to acquire up to 1,166,666 Class A ordinary shares upon a minimum of 30 days’ prior written notice of redemption and if, and only if, the last sale price of the Class A ordinary shares equals or exceeds $10.00CCH at $11.50 per share, (as adjustedfor aggregate proceeds of $35,000,000 that were used to fund the Business Combination.splits, share dividends, reorganizations, recapitalizations and the like)is based on the trading day prior to the date on which the Company sends the noticeweighted average number of redemption to the Public Warrant holders. The “fair market value” of the Class A ordinary shares is the average last reported 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 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 ordinaryCommon Stock issued and outstanding during the Successor period. Diluted earnings per share is based on the weighted average number 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 willCommon Stock issued and outstanding and the effect of all dilutive common stock equivalents and potentially dilutive share-based awards outstanding during the Successor period.be requireddetermined that the calculation of earnings per membership unit results in values that are not a valuable metric to net cash settleusers of these consolidated financial statements. Therefore, EPS information is omitted for 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 MEASUREMENTSpresents information aboutreconciles the numerators and denominators used in the computations of both basic and diluted earnings per share:Successor (in thousands, except share data) Thirteen weeks ended April 4, 2021 Basic and diluted earnings per share: Numerator: Net loss attributable to common stockholders $ (22,529) Denominator: Weighted average Class A Common Stock shares, basic 75,927,005 Basic and diluted earnings per share $ (0.30) Anti-dilutive securities excluded from diluted earnings per share calculation: Warrants 4,092,590 2020 LTIP RSUs 1,307,549 Initial Grant RSUs 57,742 PSUs 142,541 Stock options 93,211 Total 5,693,633 Class V Common Stock not subject to earnings per share calculation 60,349,000 Net loss attributable to noncontrolling interest $ (820) assets that are measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019 and indicates the fair value hierarchyClass V Common Stock do not participate in earnings or losses of the valuation techniques thatCompany and, therefore, are not participating securities. Additionally, none of the share based compensation awards participated in earnings or losses of the Company utilizedthethirteen weeks ended April 4, 2021 (Successor). As such, basic and diluted earnings per share calculations under the two-class method were not required. At April 4 2021, the Continuing Members held 60,349,000 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 determine such fair value.March 31, 2020Description Quoted Prices
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(Level 3) Money market funds $ 452,430,869 $ - $ - December 31, 2019Description Quoted Prices
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(Level 3) Money market funds $ 451,020,841 $ - $ - Nonethe noncontrolling interest was $0.8 million for the thirteen weeks ended April 4, 2021 (Successor).balancedividend was executed on May 10, 2021.Trust Account was held in cash assecond quarter of March 31, 2020 and December 31, 2019.NOTE 8.SUBSEQUENT EVENTSThe Company evaluated subsequent events and transactions2021, with the purchase price of approximately $41 million that occurred afterwill be funded from the balance sheet date up to the date financial statements were available to be issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.
revolving credit facility.15Item 2.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. the Company’sour financial condition and results of operations should be read in conjunction with theour unaudited condensedcombined interim consolidated financial statements as of and for the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysisthirteen weeks ended April 4, 2021 (Successor), together with our audited combined consolidated financial statements for our most recently completed fiscal year set forth below includesunder Item 8 of our Annual Report on Form 10-K/A. This discussion contains forward-looking statements that involve risks and uncertainties.Cautionary Note Regarding Forward-Looking StatementsThis Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our Our actual results levels of activity, performance or achievements to becould differ materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions.those discussed below. Factors that mightcould cause or contribute to such a discrepancydifferences include, but are not limited to, those describedidentified below and those discussed in Item 1A “Risk Factors” of our Annual Report on Form 10-K/A and other U.S. Securitiesfilings under the Exchange Act.Exchange Commission (“SEC”) filings.blank checkleading manufacturer, marketer, and distributor of high-quality, branded snacking products in the United States. We produce a broad offering of salty snacks, including potato chips, pretzels, cheese snacks, veggie snacks, pork skins, pub/party mixes, and other snacks. Our iconic portfolio of authentic, craft, and “better for you” brands, which includes Utz®, ON THE BORDER®, Zapp’s®, Golden Flake®, Good Health®, Boulder Canyon®, Hawaiian® Brand, and TORTIYAHS!®, among others, enjoys strong household penetration in the United States, where our products can be found in approximately 49% of U.S. households. We operate 14 manufacturing facilities with a broad range of capabilities, and our products are distributed nationally to grocery, mass merchant, club, convenience, drug and other retailers through direct shipments, distributors, and more than 1,600 direct-store-delivery (“DSD”) routes. Our company incorporatedwas founded in 1921 in Hanover, Pennsylvania, and benefits from 100 years of brand awareness and heritage in the salty snack industry. We have historically expanded our geographic reach and product portfolio organically and through acquisitions. Based on April 30, 2018 (inception)2020 retail sales, we are the second-largest producer of branded salty snacks in our core geographies, where we have acquired strong regional brands and distribution capabilities in recent years.Cayman Islands exempted companyresult of a new issuance by UBH and purchases from UBH’s existing equity holders pursuant to a Business Combination Agreement, dated as of June 5, 2020 (the “Business Combination Agreement”) among CCH, UBH and Series U of UM Partners, LLC (“Series U”) and Series R of UM Partners, LLC (“Series R” and together with Series U, the “Continuing Members”), following the approval at the extraordinary general meeting of the shareholders of CCH held on August 27, 2020.purpose of effectingSuccessor period are presented on 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 unitsfull step-up basis as a result of the underwriters’ partial exerciseBusiness Combination, and are therefore not comparable to the financial statements of their over-allotment option,the Predecessor period that are not presented on the same full step-up basis due to the Business Combination.$10.00an approximately 5.6% compound annual growth rate (“CAGR”) over the last four years, including the increased in-home consumption of salty snacks due to COVID-19 during 2020. During fiscal 2020, snacking occasions surged as consumers increasingly seek out convenient, delicious snacks for both on-the-go and at-home lifestyles. According to data from the Hartman Group, The Consumer Goods Forum, and IRI, approximately 50% of U.S. eating occasions are snacks, with 95% of the U.S. population snacking daily and the average American snacking 2.6 times per unit, generating gross proceedsday based upon the latest available IRI data. Additionally, the salty snacks category has historically benefited from favorable competitive dynamics, including low private label penetration and category leaders competing primarily through marketing and innovation. We expect these consumer and category trends to continue to drive strong retail sales growth for salty snacks.$440economic disruption or other unforeseen global events. The U.S. salty snack category has demonstrated strong performance through economic downturns historically, growing at a 4% CAGR from 2007 to 2010 during the last recession. More recently, the U.S. salty snack category demonstrated strong performance during the novel coronavirus (“COVID-19”) pandemic which began in March 2020 in the U.S. For the thirteen weeks ended April 4, 2021 (Successor), U.S. retail sales for salty snacks based on IRI data increased by 1.7% versus the comparable prior year period. In the same period, our retail sales decreased by 2.3%. The U.S. salty snack category has grown at a 6% CAGR from 2019 to 2021, while the Company has grown at a 5.9% CAGR over the same time period.incurring offering coststhe remainder on December 31, 2022. We continue to evaluate the impact of approximately $25.02 million, inclusivethe CARES Act; however, we believe it is unlikely to have a material effect on our consolidated financial position, results of $15.45operations, and cash flow.deferred legal feesvariable rate indebtedness, down from $780.0 million at January 3, 2021. As of April 4, 2021 our variable rate indebtedness is tied to the Eurocurreny Rate which currently uses the London Inter Bank Offered Rate ("LIBOR") as a benchmark for establishing applicable rates. As announced in July 2017, LIBOR is expected to be phased out by the end of 2021. On November 30, 2020, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of Currency and underwriting commissions. Each Unit consiststhe Federal Deposit Insurance Corporation issued a public statement that the administrator of one Class A ordinary shareLIBOR announced it will consult on an extension of publication of certain U.S. Dollar LIBOR tenors until June 30, 2023, which would allow additional legacy USD LIBOR contracts to mature before the succession of LIBOR. The Eurocurrency Rate could change benchmarks, the extent and one-thirdmanner of one redeemable warrant. Each whole public warrant entitlesany future changes with respect to methods of calculating LIBOR or replacing LIBOR with another benchmark are unknown and impossible to predict at this time and, as such, may result in interest rates that are materially higher than current interest rates. If interest rates applicable to our variable interest indebtedness increase, our interest expense will also increase, which could make it difficult for us to make interest payments and fund other fixed costs and, in turn, adversely impact our cash flow available for general corporate purposes.holderWorld Health Organization declared that COVID-19 constituted a “Public Health Emergency of International Concern” and later characterized it as a “pandemic”. In response, we have taken necessary preventive actions and continue to purchase one Class A ordinary shareimplement safety measures to protect our employees who are working on and off site. The same time period, March 2020, also marked the beginning of COVID-19’s impact on the consumption, distribution and production of our products. Demand for product increased significantly for several weeks in late March and into April 2020 as customers “pantry-loaded” in response to “shelter-in-place” measures that were enacted in many markets. Following that initial spike, in the weeks that followed, demand for product continued to out-pace prior year rates as families have favored “at-home” dining at an exercise pricea greater rate than pre-pandemic levels. We have serviced that demand by increasing production and distribution activities. Our strategic manufacturing capabilities and DSD distribution network have allowed us to effectively service the increased demand and be responsive to evolving market dynamics driven by changes in consumer behavior. We will continue to monitor customer and consumer activity and adapt our plans as necessary to best service the business.$11.50 per share, subjectcertain assets from Conagra Brands, Inc. related to adjustment.Simultaneously withthe H.K. Anderson business, a leading brand of peanut butter-filled pretzels for approximately $8 million. The transaction enables us to jump-start our entry into the growing filled pretzel segment, leveraging the synergies of our salty snack platform.initial public offering, we consummatedTruco Acquisition, the private placement of 7,200,000 private placement warrants at aCompany paid the aggregate cash purchase price of $1.50 per warrantapproximately $404.0 million to our sponsor, generating gross proceedsTruco Holdings LLC, including payments of $10.8 million. Each private placement warrant is exercisableapproximately $3.0 million for one Class A ordinary sharecash on hand at a price of $11.50 per share.UponTruco at the closing of the initial public offeringTruco Acquisition, less estimated working capital adjustments, subject to customary post-closing adjustments.Successor Predecessor (in thousands) Thirteen weeks ended April 4, 2021 Thirteen weeks ended March 29, 2020 Net sales $ 269,182 $ 228,029 Cost of goods sold 173,941 148,015 Gross profit 95,241 80,014 Selling, general and administrative expenses Selling 56,728 48,333 General and administrative 29,933 19,940 Total selling, general and administrative expenses 86,661 68,273 Gain on sale of assets Gain on disposal of property, plant and equipment 297 68 Gain on sale of routes, net 422 404 Total gain on sale of assets 719 472 Income from operations 9,299 12,213 Other (expense) income Interest expense (10,861) (9,643) Other (expense) income 718 580 Loss on remeasurement of warrant liabilities (21,501) — Other (expense) income, net (31,644) (9,063) (Loss) income before taxes (22,345) 3,150 Income tax (benefit) expense 1,004 1,458 Net (loss) income (23,349) 1,692 Net loss attributable to noncontrolling interest 820 — Net (loss) income attributable to controlling interest $ (22,529) $ 1,692 placement, $440 million ($10.00 per unit)label brands.Successor Predecessor (dollars in millions) Thirteen weeks ended April 4, 2021 Thirteen weeks ended March 29, 2020 Net (loss) income $ (23.3) $ 1.7 Plus non-GAAP adjustments: Income Tax Expense 1.0 1.5 Depreciation and Amortization 19.4 8.9 Interest Expense, Net 10.9 9.6 (1.0) (0.5) EBITDA 7.0 21.2 4.2 1.1 1.9 5.2 3.3 1.6 — 0.1 21.5 — Adjusted EBITDA 37.9 29.2 Adjusted EBITDA as a % of Net Sales 14.1 % 12.8 % — 0.3 — 0.4 — 9.7 Further Adjusted EBITDA $ 37.9 $ 39.6 Successor Predecessor (in thousands) Thirteen weeks ended April 4, 2021 Thirteen weeks ended March 29, 2020 Net cash used in operating activities $ (13,183) $ (2,773) Net cash used in investing activities (25,311) (14,464) Net cash (used in) provided by financing activities (4,317) 7,815 initial public offering Term Loans were used to refinance the Company’s January 2017 credit facility and fund the acquisition of Inventure Foods and the private placementrepurchase of the predecessor membership units held by a minority investor.placedallocated to each loan on a specific identification basis based on original principal amounts. Finance fees allocated to the First Lien Term Loan and the Second Lien Term Loan were $10.7 million and $4.1 million, respectively, which are presented net within “non-current portion of debt” on the consolidated balance sheets for the predecessor periods. Deferred fees are amortized ratably over the respective lives of each term loan. Deferred fees associated with the term loans under the January 2017 credit agreement were fully expensed during 2017 and deferred financing fees were derecognized as a result of the Business Combination as described in the trust accountNote 1. "Operations and Summary of Significant Accounting Policies" and Note 2. "Acquisitions".invested in U.S. government securities, withinused primarily to finance the meaning set forth in Section 2(a)(16) of the Investment Company Act,Kennedy acquisition. The Secured First Lien Note requires quarterly interest payments, with a repayment of principal on the maturity date of 180 days or less or in any open-ended investment company that holds itself out asNovember 21, 2024. The Secured First Lien Note bears interest at an annual rate based on 3 month LIBOR plus an applicable margin of 5.25%.money market fund selectedBridge Credit Agreement with a syndicate of banks, led by us meeting the conditionsBank 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 funds in the trust account.Our management has broad discretion with respect to the specific application of the netAmerica, N.A. The proceeds of the initial public offeringBridge Credit Agreement were used to fund the Company’s acquisition of Truco and the private placementIP Purchase from OTB Acquisition, LLC, in which the Company withdrew $490.0 million to finance the Truco Acquisition and IP Purchase. The Bridge Credit Agreement bears interest at an annual rate based on 4.25% Base 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 redemption 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. In connection with Amendment No. 2 to the Credit Agreement, and a $12.0 million repayment in the first quarter of 2021, the outstanding balance of $370.0 million was repaid in full.althoughand extended the maturity of the 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 million and $358 million, respectively. The refinancing was accounted for as an extinguishment. The Company incurred debt issuance costs and original issuance discounts of $8.4 million. The interest rate on this instrument was 3.11% as of April 4, 2021.net proceeds are intended to be applied toward identifyingassets and consummating an initial business combination.16If we are unable to complete a business combination within 24 months from the closingliabilities of the initial public offering,Company. The credit agreements contain certain affirmative and negative covenants as to operations and the financial condition of the Company. The Company was in compliance with its financial covenant as of April 4, 2021.October 10, 2020, we will (i) cease all operations except0.00%. Both the fixed and floating payment streams are based on a notional amount of $250 million. The Company entered into this transaction to reduce its exposure to changes in cash flows associated with its variable rate debt and has designated this derivative as a cash flow hedge. At April 4, 2021, the effective fixed interest rate on the long-term debt hedged by this contract was 3.47%. For further treatment of the Company’s interest rate swap, refer to Note 10. "Fair Value Measurements” and Note 12. "Accumulated Other Comprehensive Income (Loss)”.purposepurchase of windingroutes. The agreement with M&T Bank was amended in January 2020 so that the Company guaranteed up (ii) as promptly as reasonably possible but no more than five business days thereafter, redeem 100%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 $6.2 million and $6.6 million at April 4, 2021 and January 3, 2021, respectively, all of which was on balance sheet. 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 public sharesloan value upon default.redemption will completely extinguish public shareholders’ rights$1.0 million is still outstanding as shareholders (includingof April 4, 2021 and January 3, 2021. Additionally, during the rightfirst fiscal quarter of 2020, the Company purchased intellectual property that include a deferred purchase price of $0.5 million, of which $0.4 million and $0.5 million is outstanding as of April 4, 2021 and January 3, 2021, respectively.receive further liquidation distributions, if any), subjecta financial institution. During fiscal the first quarter of 2021, the Company sold an additional $2.3 million of notes receivable from IOs on its books for $2.5 million to applicable law and (iii) as promptly as reasonably possible following such redemption, subjecta financial institution. Due to the approvalstructure 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 providetransactions, the sale did not qualify for claims of creditorssale accounting treatment and the requirements of applicable law.Results of OperationsOur entire activity from April 30, 2018 (inception) through March 31, 2020, was in preparation for our initial public offering, and since such offering, our activityCompany has been limitedrecorded the notes payable obligation owed by the IOs to the searchfinancial institution on its books; the corresponding notes receivable also remained on the Company’s books. The Company services the loans for a prospective initial business combinationthe 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 December 2028. The Company partially guarantees the outstanding loans, as discussed in further detail within Note 11. "Contingencies”. We will not generate any operating revenues untilThese loans are collateralized by the closingroutes for which the loans are made. Accordingly, the Company has the ability to recover substantially all of the outstanding loan value upon default.completionother long-term debt, of our initial business combination.Forwhich $2.9 million was related to amortization of deferred financing fees, and $0.4 million of which was related to IO loans. Interest expense for the three monthsthirteen weeks ended March 31,29, 2020 we had net(Predecessor) was $9.6 million, $8.3 million of which was related to the Company’s credit facility and other long-term debt, $0.7 million of which was related to amortization of deferred financing fees, and $0.6 million of which was related to IO loans. The interest expense on IO loans is a pass-through expense that has an offsetting interest income within Other (expense) income.approximately $178,000, which consisted of approximately $1.4April 4, 2021. The Company has recorded purchase commitment losses totaling $— million in investment income fromand $0.3 million for the trust accountthirteen weeks ended April 4, 2021 (Successor), offset by approximately $1.2 million in general and administrative expenses.For the three monthsthirteen weeks ended March 31,29, 2020 (Predecessor), respectively.we had net incomeand fiscal 2021, which the Company partially guarantees. The outstanding balance of approximately $2.3notes purchased by Bank of America at April 4, 2021 and January 3, 2021 was $17.4 million and $16.5 million, respectively. Due to the structure of the transaction, the sale did not qualify for sale accounting treatment, as such the Company records the notes payable obligation owed by the IOs to the financial institution on its books; the corresponding note receivable also remained on the Company’s books. 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 consistedthe loans are made. Accordingly, the Company has the ability to recover substantially all of approximately $2.5 million in investment income from the Trust Account, offset by approximately $160,000 in generaloutstanding loan value upon default.administrative expenses. Going Concern ConsiderationThe accompanyingSummary of Significant Accounting Policies," to the unaudited condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q.assuming we will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As ofMarch 31, 2020, we had approximately $585,000 in cash and working capital deficit of approximately $1.1 million. In addition, in order to finance transaction costs in connection with a business combination, our sponsor or an affiliate of our sponsor, or certain of our officers and directors may, but are not obligated to, make Working Capital Loans to us. As of March 31, 2020, there were no amounts outstanding under any Working Capital Loan.Our liquidity needs prior to 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 and $155,000 in loans available from our sponsor under a promissory note (the “Note”). We fully repaid the Note on October 17, 2018, after the closing of the initial public offering. Our liquidity needs for and following the initial public offering have been satisfied by the portion of the net proceeds from the private placement held outside the trust account.In connection with our assessment of going concern considerations in accordance with accounting principles generally accepted in the United States. While the majority of our revenue, expenses, assets and liabilities are not based on estimates, there are certain accounting principles that require management to make estimates regarding matters that are uncertain and susceptible to change. Critical accounting policies are defined as those policies that are reflective of significant judgments, estimates and uncertainties, which could potentially result in materially different results under different assumptions and conditions. Management regularly reviews the estimates and assumptions used in the preparation of our financial statements for reasonableness and adequacy. Our significant accounting policies are discussed in Note 1. "Operations and Summary of Significant Accounting Policies", of the unaudited Consolidated Financial Accounting Standard Board’s (“FASB”) Accounting Standards Update 2014-15, “DisclosuresStatements contained in Part I, Item 1 of Uncertainties about an Entity’s Abilitythis Quarterly Report on Form 10-Q; however, the following discussion pertains to Continue as a Going Concern,” management has determined that our liquidity position, the mandatory liquidation and subsequent dissolution raises substantial doubt about our ability to continue as a going concern. No adjustments have been madeaccounting policies we believe are most critical to the carrying amounts of assets or liabilities should we be required to liquidate and dissolve after October 10, 2020.Related Party TransactionsRelated Party LoansIn 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, make Working Capital Loans to us. 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.17Administrative 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 $30,000 in general and administrative expenses in connection with this administrative services agreement in each of the accompanying statements of operations during the three months ended March 31, 2020 and 2019. As of March 31, 2020 and December 31, 2019, we have accrued approximately $177,000 and $147,000, respectively, for services in connection with such agreement on the accompanying balance sheets.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 to fund 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.Other 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.Deferred Underwriting FeesPursuant to our initial public offering, 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 we complete a business combination, subject to the terms of the underwriting agreement.18Deferred 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 analysisportrayal of our financial condition and results of operations and that require significant, difficult, subjective or complex judgments. Other companies in similar businesses may use different estimation policies and methodologies, which may affect the comparability of our financial condition, results of operations and cash flows to those of other companies.our unaudited condensed financial statements, which have been preparedactual occurrence or performance. Our promotional activities are conducted either through the retail trade or directly with consumers and include activities such as in accordance with U.S. GAAP.store displays and events, feature price discounts, consumer coupons, and loyalty programs. The preparationcosts of these financial statementsactivities 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 or consumer. These estimates are made using various techniques including historical data on performance of similar promotional programs. In 2019, we implemented a system that improves our ability to analyze and estimate the reserve for unpaid costs relating to our promotional activities. Differences between estimated expense and actual redemptions are recognized as a change in management estimate as the actual redemption incurred.affectpotential impairment indicators are present.reported amountsreporting unit level.assets,a reporting unit’s carrying amount over our fair value.revenuesor receivables for the amount of taxes we estimate are payable or refundable for the current year, and expenses and the disclosure of contingentdeferred tax assets and liabilities in ourfor the expected future tax consequences attributable to temporary differences between the financial statements. On an ongoing basis, we evaluate our estimatesstatement carrying amounts 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 valuestheir respective tax bases of assets and liabilities and the expected benefits of net operating loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be 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.readily apparent from other sources. Actual results may differ from these estimates under different assumptionsof being sustained upon examination by taxing authorities. Differences between tax positions taken or conditions.expected to be taken in a tax return and the benefit recognized and measured pursuant to the 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 that was not recognized as a result of applying the provisions of ASC 740-10. Interest costs and related penalties related to unrecognized tax benefits are required to be calculated, if applicable. Our policy is to classify assessments, if any, for tax related interest as interest expense and penalties as selling and administrative expenses. As of April 4, 2021, and January 3, 2021, no liability for unrecognized tax benefits was required to be reported. We believe there have been nodo not expect any significant changes in our critical accounting policiesunrecognized tax benefits in the next year.discusseda 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 our Annual Report on Form 10-K filed by us witha single identifiable asset or group of similar identifiable assets. If the SEC on March 12, 2020.Off-Balance Sheet ArrangementsAs of March 31, 2020, 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,screen is met, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirementstransaction is accounted for qualifying public companies. We will qualify as an “emerging growth company” and underasset acquisition. If 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 mayscreen is not comply with new or revised accounting standards on the relevant dates on which adoption of such standardsmet, further determination is required as to whether or not we have 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 a business combination or an acquisition of assets.non-emerging growth companies. As such,acquired businesses. Under the acquisition method, our financial statements may not be comparablereflect 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.companies that complycertain limits, for employee group health claims. We purchase stop-loss insurance, which will reimburse us for individual and aggregate claims in excess of certain annual established limits. Operations are charged with public company effective dates.Recent Accounting PronouncementsManagement does not believe that any recently issued,the cost of claims reported and an estimate of claims incurred but not yet effective, accounting pronouncements, if currently adopted, wouldreported.material effect onnumber of different insurance vehicles and programs for these insurable risks and recognizes expenses and reserves in accordance with the Company’s financial statements.provisions of each insurance vehicle/program.Item 3.Quantitative and Qualitative Disclosures About Market RiskAs of March 31, 2020, we were not subject to anyor interest rate risk. Following the consummationrisk, see Item 7A. "Quantitative and Qualitative Disclosures About Market Risk" of our Initial Public Offering,Annual Report on Form 10-K/A for the net proceeds of our Initial Public Offering, including amounts in the Trust Account, were invested in U.S. government treasury bills, notes or bonds or in certain moneyyear ended January 3, 2021. Our exposures to market funds that invest solely in direct U.S. government treasury obligations. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.Werisk have not engaged in any hedging activitieschanged materially since our inception and we do not expect to engage in any hedging activities with respect to the market risk to which we are exposed.
January 3, 2021.19Item 4.Controls and ProceduresUndersupervisionExchange Act is properly and with the participation oftimely reported and communicated to our management, including our principal executive officerChief Executive Officer and principalChief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.accounting officer, we conducted an evaluation ofprocedures may deteriorate. As such, misstatements due to error or fraud may occur and not be detected.end of the fiscal quarter ended March 31, 2020, as such term is defined in Rules 13a-15(e)participation, and 15d-15(e) under the Exchange Act.supervision, of our management, including our Chief Executive Officer and Chief Financial Officer. Based onupon this evaluation, our principal executive officerChief Executive Officer and principal financial and accounting officer hasChief Financial Officer concluded that, during the period covered by this report,as of April 4, 2021, our disclosure controls and procedures were effective.Disclosure controlsineffective due to the material weakness described below.procedures are designedwe did not adequately review or oversee the work of external specialists to ensure that information required to be disclosed byassist us in the preparation of our Exchange Act reports is recorded, processed, summarized,financial statements and reported within the time periods specifiedin our compliance with SEC reporting obligations.SEC’s rulesprocess of remediating the material weakness identified by standardizing our controls over accounting and forms,financial reporting and formalizing our review process related to non-routine transactions and reviews of accounting estimates performed by external specialists.such information is accumulated and communicated towe have identified all, or that we will not in the future have additional, material weaknesses. Material weaknesses may still exist when we report on the effectiveness of our management, including our principal executive officer and principalinternal control over financial officer or persons performing similar functions,reporting as appropriate to allow timely decisions regarding required disclosure.There was no change in our internal control over financial reporting that occurred duringMarch 31, 2020 covered byApril 4, 2021, we completed a multi-year implementation plan to go live with a new Enterprise Resource Planning (ERP) system. This system improves upon and consolidates certain processes and controls and increases efficiency. As mentioned above, we are in the process of evaluating the design and operating effectiveness of key financial reporting controls, as part of the remediation of the material weakness described above, and our overall control environment, including the automated controls resulting from this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.II—II – OTHER INFORMATIONItem 1.Legal ProceedingsNone.Item 1A.Risk Factorsfrom theto our risk factors previously disclosed in Part I, Item 1A, Risk Factors, of our Annual Report forsince the fiscal year ended December 31, 2019, except for the risk factor updated below:Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the recent coronavirus (COVID-19) outbreak.In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout China and other partsfiling of the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern.” On January 31, 2020, U.S. Health and Human Services Secretary Alex M. Azar II declared a public health emergency for the United States to aid the U.S. healthcare community in responding to COVID-19, and on March 11, 2020 the World Health Organization characterized the outbreak as a “pandemic.” A significant outbreak of COVID-19 and other infectious diseases could result in a widespread health crisis that could adversely affect the economies and financial markets worldwide, and the business of any potential target business with which we consummate a business combination could be materially and adversely affected. Furthermore, we may be unable to complete a business combination if continued concerns relating to COVID-19 restrict travel, limit the ability to have meetings with potential investors or the target company’s personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our search for a business combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue for an extensive period of time, our ability to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination, may be adversely affected in a material way.
Form 10-K/A.20Item 2.Unregistered Sales of Equity Securities and Use of Proceeds from Registered SecuritiesUse 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, $431,200,000 (which amount includes $15,400,000 of the underwriters’ deferred discount) was placed in the Trust Account (in addition to $8,800,000 of net proceeds from the Private Placement).There 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.Item 3.Defaults Upon Senior SecuritiesItem 4.Mine Safety DisclosuresItem 5.Other InformationNone.Item 6.Exhibits.ExhibitNumberDescription31.1ExhibitNumber Exhibit Description 32.1*Co-Executive Chairman (PrincipalChief Executive Officer and Principal Financial and Accounting Officer) Pursuantpursuant to 18 U.S.C. Section 1350, as Adopted Pursuantadopted to Section 906 of theSarbanes-Oxley Act of 2002.101.INS* Inline XBRL Instance Document. 101.INS101.SCH*XBRL Instance Document101.SCHInline XBRL Taxonomy Extension Schema DocumentDocument.101.CAL* 101.CALInline XBRL Taxonomy Extension Calculation Linkbase DocumentDocument.101.DEF* 101.DEFInline XBRL Taxonomy Extension Definition Linkbase DocumentDocument.101.LAB* 101.LABInline XBRL Taxonomy Extension Label Linkbase DocumentDocument.101.PRE* 101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document *104*These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002Cover Page Interactive Data File (formatted as Inline XBRL 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 referencecontained in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.Exhibit 101)21* Filed herewith ** Furnished herewith authorized on this 8th day ofauthorized.2020.
13, 2021UTZ BRANDS, INC.COLLIER CREEK HOLDINGSBy:/s/ Jason K. GiordanoName: Jason K. GiordanoTitle: Co-Executive Chairman22