Business context and reporting period
Important issuer mismatch: The supplied filing is TPG Pace Holdings Corp.’s Form 10-Q for the quarter ended June 30, 2018—not a filing by Accel Entertainment, Inc. It describes a blank-check company seeking a business combination, not an operating gaming business. The filing says it was reviewing acquisition opportunities but does not identify a completed combination or confirm a transaction with Accel.
The filing reports the three and six months ended June 30, 2018, with comparisons to the three months and the inception-to-June 30, 2017 period, respectively.
Financial results and position
| Metric | Reported amount |
|---|---|
| Revenue | $0 for the three and six months ended June 30, 2018 |
| Net income | $1.635 million for the quarter and $2.761 million for the six months, generated by trust-account interest; the company had no operating revenue |
| Operating expenses | $166,288 for the quarter and $454,888 for the six months |
| Trust investments | $453.216 million at June 30, 2018, up from $450.000 million at December 31, 2017 |
| Cash outside trust | $146,162, down from $372,073 at year-end |
| Current liabilities | $362,134; total liabilities were $16.112 million, including $15.750 million of deferred underwriting compensation payable only if a business combination is completed |
| Cash flow | $140,630 used in operating activities in the first six months; no investing cash flow and $85,281 used in financing activities |
| Debt and liquidity | No long-term debt reported. The $453.216 million trust balance is restricted for a business combination, redemptions, or liquidation; outside-trust cash was below current liabilities. |
Basic and diluted earnings per share were $0.03 for the quarter and $0.05 for the six months, versus a loss of $0.01 for the 2017 inception-to-June period. The filing provides no operating margins, as the company had no revenue or operating business.
Changes, outlook, and risks
- Compared with the 2017 periods, net results improved primarily because trust investments earned $3.216 million of interest in the first half of 2018; operating expenses also increased.
- Management said it continued to evaluate potential acquisitions, expected further costs, and could need additional funding from the sponsor, affiliates, or new debt or equity. It gave no transaction-specific guidance or assurance of success.
- The company had 24 months from the June 30, 2017 offering close to complete a business combination, with a possible extension to 27 months if the stated agreement milestones were met. Failure to complete one would trigger winding up and redemption of public shares; warrants could expire worthless.
- The filing states that this mandatory liquidation requirement raises substantial doubt about the company’s ability to continue as a going concern. Management also cautioned that the sponsor’s trust-account indemnity might not be collectible.
- Management reported effective disclosure controls and no material change in internal control over financial reporting. No material risk-factor changes, legal proceedings, or subsequent events requiring disclosure were reported.
Key facts for investors to verify
- Confirm the intended issuer: this filing is for TPG Pace Holdings Corp., not Accel Entertainment.
- Verify whether a business combination was later announced or completed, and whether it involved Accel Entertainment.
- Check subsequent filings for updated available cash, acquisition-related spending, financing needs, and the status of the business-combination deadline.
- Review the terms and potential dilution from the public and private warrants, and the redemption and deferred-underwriting-fee provisions.