Issuer and reporting period
Important identity discrepancy: The supplied filing is ChaSerg Technology Acquisition Corp.’s Form 10-Q, not a filing for GRID DYNAMICS HOLDINGS, INC. It covers the quarter ended September 30, 2018; the financial statements are unaudited. ChaSerg was a blank-check company formed to pursue a business combination, with a stated focus on technology companies. It had not begun operations by quarter-end.
Financial results and position
| Metric | Three months ended September 30, 2018 | Inception through September 30, 2018 |
|---|---|---|
| Revenue | None | None |
| Formation and operating costs / net loss | $33 | $1,608 |
| Basic and diluted loss per share | $0.00 loss per share, rounded | $0.00 loss per share, rounded |
| Operating cash flow | Not separately presented | $(108) |
At September 30, cash was $48,819; deferred offering costs were $301,359; total assets were $350,178. Current liabilities were $326,786, including a $223,100 related-party promissory note and $102,186 accrued offering costs. Stockholders’ equity was $23,392. The company reported no long-term debt or off-balance-sheet financing arrangements. There are no meaningful operating-period comparisons because the company was incorporated on May 21, 2018.
Subsequent financing and liquidity
After quarter-end, ChaSerg completed its IPO and related private placement. The filing reports that by October 25, 2018, it had sold 22 million public units for $220 million gross proceeds and 640,000 placement units for $6.4 million. It placed $220 million in a trust account and reported $1,354,817 outside the trust for working capital. Transaction costs totaled $12,821,311, including $7.7 million of deferred underwriting fees payable only if a business combination is completed. The filing also describes repayment of the $223,100 related-party note upon the October 10 IPO closing.
Outlook, risks, and notable terms
- Management expected no operating revenue until after a business combination and anticipated higher public-company, diligence, and transaction costs. It said it did not expect to need additional funds for operations, but warned that underestimated search and transaction costs or significant shareholder redemptions could require additional financing.
- The company had until April 9, 2020 to complete a business combination. If it failed, it would wind up and redeem public shares from the trust, subject to the terms described in the filing; warrants could expire worthless.
- The company may issue stock or incur debt to complete a transaction. Management disclosed potential dilution, senior claims from preferred stock or debt, financing constraints, and other risks. Completion of a business combination was not assured.
- Management reported effective disclosure controls and no material change in internal control over financial reporting during the quarter. It reported no legal proceedings and no material risk-factor changes from the IPO prospectus.
- The filing states that the trust was invested in short-term U.S. government securities or qualifying money market funds after the IPO and that management did not expect material interest-rate exposure.
Key facts for investors to verify
- Confirm the intended issuer: the supplied document names ChaSerg Technology Acquisition Corp., not Grid Dynamics Holdings, Inc.
- Reconcile IPO dates: the notes and MD&A describe the IPO closing on October 10 and the partial over-allotment closing on October 25, while Part II says the IPO was consummated on October 5.
- Check later filings for the business-combination outcome, trust balance and redemption terms, use of outside-trust funds, and any additional financing or dilution.
- Review the IPO prospectus and subsequent filings for the full risk factors and contractual terms.