Filing summary
Entity mismatch: Although the request identifies Grindr Inc., this is Tiga Acquisition Corp.’s unaudited Form 10-Q for the quarter ended March 31, 2022. Tiga was a blank-check company; these results are not Grindr’s operating results.
Business context and reporting period
Tiga had not commenced operations or generated operating revenue. Its activities were limited to seeking a business combination, including its proposed transaction with Grindr Group LLC. The filing reports the three months ended March 31, 2022, with comparison to the same period in 2021.
On May 9, 2022, after quarter-end, Tiga agreed to combine with Grindr. The agreement set Grindr’s valuation at $1.584 billion, subject to an adjustment tied to distributions, and contemplated Tiga’s redomiciliation and renaming as Grindr Inc., subject to closing conditions and shareholder approval. Tiga also disclosed a $50 million forward purchase arrangement.
Financial metrics
| Metric | Q1 2022 | Q1 2021 |
|---|---|---|
| Operating revenue | None | None |
| Operating costs | $1.21 million | $0.18 million |
| Net income | $8.01 million | $5.57 million |
| Net income per share, Class A and B | $0.23 | $0.16 |
| Net cash used in operating activities | $0.87 million | $0.10 million |
Q1 2022 net income primarily reflected a noncash $8.96 million gain from the change in fair value of warrant liabilities and a $0.22 million gain on forward purchase agreement liabilities, plus $0.04 million of trust-account interest, offset by operating costs. In Q1 2021, the warrant-liability gain was $7.33 million, while the forward purchase agreement remeasurement was a $1.60 million expense. The reported profit therefore mainly reflects valuation changes, not operating performance. Operating margins are not meaningful because Tiga had no revenue.
At March 31, 2022, Tiga reported $284.79 million in total assets, including $284.42 million in trust-account cash and investments, and $0.20 million in cash outside the trust. Total liabilities were $28.70 million, including $12.26 million of warrant liabilities, $4.79 million of forward purchase agreement liabilities, a $9.66 million deferred underwriting fee, and $1.05 million due under a related-party note. Class A shares subject to possible redemption were recorded as $284.28 million of temporary equity. No long-term debt was reported.
Cash increased by $0.18 million during the quarter, reflecting $1.05 million of related-party note proceeds offset principally by operating cash use. Tiga reported a shareholders’ deficit of $28.20 million. Trust assets were held principally in short-term U.S. Treasury securities.
Changes, outlook, risks and unusual items
- Operating costs rose to $1.21 million from $0.18 million year over year. Net income increased, but was driven mainly by noncash fair-value gains.
- Management said the $0.20 million of outside-trust cash was insufficient to fund ongoing transaction costs without additional financing. The filing states that these liquidity conditions and the risk of mandatory liquidation raise substantial doubt about Tiga’s ability to continue as a going concern.
- Tiga had until May 27, 2022, to complete a business combination, with a possible six-month extension to November 27, 2022, subject to sponsor action and a $2.76 million deposit into the trust. The filing says failure to complete a transaction within the applicable period could require liquidation; public warrants could expire worthless.
- Management identified a material weakness in internal control over financial reporting concerning accounting for complex financial instruments; disclosure controls were deemed ineffective. Remediation steps were underway, with no assurance they would have the intended effect.
- The filing notes uncertainty about potential COVID-19 effects and proposed SEC rules concerning SPAC transactions. It reports no legal proceedings.
Important facts for investors to verify
- Confirm that this Tiga SPAC filing is the intended document; it does not provide Grindr’s standalone revenue, profit, cash flow, or operating metrics.
- Review the merger agreement, transaction conditions, shareholder approval and redemption levels, and the final sources and uses of transaction financing.
- Verify the business-combination deadline, any extension, sponsor funding, and Tiga’s liquidity outside the trust.
- Assess the effect of warrant and forward-purchase liability revaluations on reported earnings, as well as the status of the disclosed control weakness.