Filing summary
Issuer discrepancy: The supplied filing is Global Partner Acquisition Corp.’s Form 10-Q for the quarter ended June 30, 2016—not a filing by Purple Innovation, Inc. The figures below describe Global Partner Acquisition Corp. and should not be attributed to Purple Innovation.
Business context and reporting period
Global Partner Acquisition Corp. was a blank-check company formed to pursue a business combination. It reported no operating activity or revenue through June 30, 2016; its activities were formation, the 2015 offering, and seeking an acquisition. The filing is unaudited and covers the three and six months ended June 30, 2016.
Key financial metrics
| Metric | Three months ended June 30, 2016 | Six months ended June 30, 2016 |
|---|---|---|
| Revenue | $0 | $0 |
| General and administrative expenses | $121,000 | $259,000 |
| Interest income | $65,000 | $165,000 |
| Net loss | $56,000 | $94,000 |
| Basic and diluted loss per share | $0.01 | $0.02 |
At June 30, 2016, cash available outside the trust was $775,000; cash and investments held in trust totaled $155.396 million. Total assets were $156.276 million, total liabilities $4.755 million, and stockholders’ equity $5.0 million. Liabilities included $4.658 million of deferred underwriting compensation, payable only upon a completed business combination. The company reported no long-term debt or lease obligations. Six-month operating cash use was $273,000. Profit margins are not meaningful for a pre-combination company with no revenue.
Changes versus prior periods
Compared with December 31, 2015, outside cash declined from $1.048 million to $775,000, while trust assets increased from $155.293 million to $155.396 million. Total liabilities fell from $4.857 million to $4.755 million. The filing’s 2015 income-statement comparator is only the period from inception through June 30, 2015, when the company had no reported expenses or income; it is not a comparable full quarter. Management attributed 2016 expenses mainly to governance, public reporting, insurance, franchise taxes, and sponsor administrative fees, and noted a reversal of accrued franchise taxes after final calculations.
Outlook, risks, and unusual items
- Management stated that available cash was expected to fund operations for at least the next 12 months, while anticipating significant acquisition-search costs. Completion of a business combination was not assured.
- The company had until August 4, 2017—24 months after its offering—to complete a business combination; otherwise it would liquidate and redeem public shares under the charter provisions.
- Public shares were subject to redemption at approximately $10 per share. At June 30, 2016, 14,652,088 shares were classified outside permanent equity as redeemable.
- The trust was invested primarily in short-term U.S. Treasury bills. Management said it did not believe current interest-rate risk was material. No material changes to previously disclosed risk factors were reported.
- Potential business-combination financing through equity or debt could dilute shareholders or increase financial and covenant risks. The company reported no legal proceedings and effective disclosure controls.
Important facts for investors to verify
- Confirm the issuer: the supplied document identifies Global Partner Acquisition Corp., not Purple Innovation, Inc.
- Verify whether a later business combination occurred and how the trust, redemption rights, and warrants were ultimately handled.
- Distinguish the $775,000 of operating cash from the $155.396 million held in trust, which was generally unavailable for operating expenses.
- Review the 2015 Form 10-K and subsequent filings for the full risk disclosures and transaction history.