Grindr Inc. quarterly report, Q2 FY2021

Full document

Business context and reporting period

Important issuer mismatch: The supplied filing is Tiga Acquisition Corp.’s unaudited Form 10-Q for the quarter ended June 30, 2021—not a Grindr Inc. filing. Tiga was a Cayman Islands blank-check company searching for a business combination; it had not begun operating or generating operating revenue.

Financial results and position

  • Revenue and margins: No operating revenue; margin metrics are not meaningful. Operating costs were $650,003 for the quarter and $834,787 for the six months ended June 30, 2021.
  • Profit: Net income was $5,425,883 for the quarter and $10,998,009 for the six-month period. The gains chiefly reflected non-cash fair-value changes in warrant liabilities ($4,205,105 quarterly; $11,534,063 six-month) and the forward purchase agreement liability ($1,787,878 quarterly; $184,109 six-month). Trust interest was only $3,355 and $35,076, respectively.
  • Cash flow: Six-month operating cash use was $314,160; investing cash use was $2,760,000; financing cash provided was $2,733,220. Cash declined $340,940 to $803,836.
  • Liquidity and assets: Trust Account assets were $281,569,722, primarily U.S. Treasury securities, and were intended for a business combination, subject to redemption rights. Current assets outside the trust were $1,043,475.
  • Liabilities and debt: Total liabilities were $47,147,058, including $30,378,556 of warrant liabilities, $6,573,668 of forward purchase agreement liabilities, and $9,660,000 of deferred underwriting fees payable upon a completed business combination. The company reported no long-term debt or working-capital loans.
  • Equity: Shareholders’ equity was $5,000,008; 22,590,729 Class A shares were classified as subject to possible redemption, with $230,466,131 shown outside shareholders’ equity as temporary equity.

Changes, outlook, and risks

  • The filing gives no comparable 2020 quarterly operating results; balance-sheet comparisons are to December 31, 2020. From year-end, trust assets increased about $2.8 million, while warrant liabilities declined about $8.9 million. Fair-value gains, rather than operating activity, drove reported profit.
  • In May 2021, the company issued 2,760,000 extension private placement warrants for $2.76 million, deposited into the trust; total private placement warrants rose to 13,040,000. A forward purchase agreement contemplated $50 million of committed securities at a business-combination closing, with an additional $50 million optional at the purchaser’s discretion.
  • The company reported substantial doubt about its ability to continue as a going concern if it failed to complete a business combination by the applicable deadline and did not extend. It disclosed possible extensions of six months each, subject to sponsor funding, and liquidation if no combination is completed.
  • Deadline needs verification: The filing describes a May 2021 extension and related trust deposit, but also repeatedly states a November 27, 2021 deadline and possible extensions through November 27, 2022. The effective deadline is not clear from the filing text.
  • Management said COVID-19 could adversely affect the company or its target search, but the impact was not determinable. The filing also identifies a material weakness in internal control over financial reporting related to warrant and forward purchase agreement classification and valuation; disclosure controls were judged ineffective. No material change in risk factors from the prior annual filing was reported.

Important facts for investors to verify

  1. Confirm the correct issuer and filing: this document concerns Tiga Acquisition Corp., not Grindr Inc.
  2. Confirm the business-combination deadline and whether the May 2021 extension was effective.
  3. Assess the company’s ability to complete a transaction before the deadline and the consequences of redemption or liquidation.
  4. Review the material weakness, prior financial-statement restatement, and remediation progress.
  5. Distinguish non-cash fair-value gains from operating performance, and review redemption exposure and the terms of the forward purchase agreement.