Business context and reporting period
This is Tiga Acquisition Corp.’s unaudited Form 10-Q for the quarter and six months ended June 30, 2022—not an operating-company 10-Q reporting Grindr’s standalone business results. Tiga was a blank-check company pursuing a proposed merger with Grindr Group LLC, announced May 9, 2022. The transaction had not closed as of the filing.
The merger agreement set Grindr’s valuation at $1.584 billion, subject to an adjustment tied to permitted distributions (up to $370 million). Tiga planned to domesticate as a Delaware corporation and rename itself Grindr Inc., subject to closing conditions and shareholder approval.
Financial results and liquidity
| Metric | Three months ended June 30 | Six months ended June 30 |
|---|---|---|
| Operating revenue | None | None |
| Operating costs | $3.04 million (2022); $0.65 million (2021) | $4.24 million (2022); $0.83 million (2021) |
| Net income (loss) | $(7.52) million (2022); $5.43 million (2021) | $0.49 million (2022); $11.00 million (2021) |
| Net cash used in operating activities | Not separately reported | $1.53 million (2022); $0.31 million (2021) |
- Results were driven substantially by non-cash fair-value movements in warrant and forward-purchase-agreement liabilities, not operating revenue. For the first half of 2022, warrant fair-value changes contributed $4.93 million of income, while FPA fair-value changes reduced income by $0.51 million.
- Second-quarter 2022 operating costs included $2.88 million of M&A-related costs. Six-month M&A-related costs were $3.92 million.
- At June 30, cash outside the trust was $165,655; cash and investments in the trust totaled $287.54 million. The trust was principally invested in short-term U.S. Treasury securities.
- Current liabilities were $4.93 million, including $1.68 million outstanding under a Sponsor convertible promissory note. Total liabilities were $39.25 million, including warrant liabilities of $19.13 million, FPA liabilities of $5.52 million and a $9.66 million deferred underwriting fee payable. Shareholders’ deficit was $38.98 million. Public shares subject to possible redemption were presented separately as temporary equity at $287.54 million.
- No meaningful operating margin is available because Tiga had no operating revenue and was not conducting Grindr’s business.
Material changes versus the prior comparable period
- Second-quarter results shifted from $5.43 million net income in 2021 to a $7.52 million net loss in 2022, primarily reflecting unfavorable fair-value changes in warrants and the FPA in 2022 versus gains in 2021, alongside higher operating costs.
- First-half net income fell to $0.49 million from $11.00 million. Operating costs increased to $4.24 million from $0.83 million, while favorable warrant remeasurement income was lower than in the prior-year period.
- Cash used in first-half operating activities rose to $1.53 million from $0.31 million. Cash at June 30 was $165,655, compared with $803,836 at June 30, 2021.
- The Sponsor advanced $1.68 million under a note during the first half; $320,000 remained available under the $2.00 million note authorization.
Outlook, risks and unusual items
- Tiga reported substantial doubt about its ability to continue as a going concern, citing limited cash outside the trust and the need for additional Sponsor or other financing. It had until November 27, 2022 to complete a business combination; absent completion or an extension, mandatory liquidation and dissolution were required. Management intended to complete the Grindr transaction.
- The amended forward purchase agreement provided for a committed $50 million purchase by the Sponsor at closing, with a conditional backstop and a further optional purchase of up to $50 million. Actual funding and transaction proceeds remained subject to the agreement’s terms and closing.
- The company disclosed a $5 million success fee for its transaction advisor and a possible $2 million incentive fee, dependent on redemption levels and other terms. The deferred underwriting fee was $9.66 million; Goldman Sachs (Asia) L.L.C. waived its portion, but the filing does not specify that this eliminated the entire fee.
- The filing cited COVID-19 and the war in Ukraine and related sanctions as uncertainties whose specific effects were not determinable. It stated that these financial statements included no adjustments for those uncertainties.
- Management said disclosure controls were effective and that a previously identified material weakness concerning complex financial-instrument accounting had been remediated by March 31, 2022.
Important facts for investors to verify
- Review subsequent filings for whether the merger closed, the final transaction terms, shareholder redemptions and the resulting cash available to the combined company.
- Confirm the final amount of committed, backstop and optional Sponsor funding, and the effect of any Grindr distributions on the stated $1.584 billion valuation.
- Assess the combined company’s actual debt, liquidity, transaction expenses, dilution and fully diluted share count; this SPAC filing does not provide Grindr’s operating revenue, profit or cash-flow results.
- Check the outcome of the November 27, 2022 SPAC deadline and any extension, and the final treatment of redeemable shares and warrants.
- Review the merger proxy/prospectus and risk disclosures for redemption mechanics, contingent advisor fees, deferred underwriting costs and other closing conditions.