Filing summary
Important identity mismatch: The supplied filing is TPG Pace Holdings Corp.’s Form 10-Q, not an Accel Entertainment, Inc. filing. It describes a blank-check company formed to pursue a business combination; it contains no operating or financial results for Accel Entertainment.
Business context and reporting period
The report covers the three months ended September 30, 2017, and the period from TPG Pace Holdings’ February 14, 2017 inception through September 30, 2017. The company completed its initial public offering on June 30, 2017 and was evaluating acquisition opportunities. It reported no operating revenue.
Financial position and results
- Revenue: $0 for the quarter and inception-to-date. Operating margins are not meaningful for this pre-combination entity.
- Loss: Net loss was $94,400 for the quarter and $218,915 from inception through September 30; inception-to-date basic and diluted loss per share was $0.01.
- Cash and liquidity: Cash outside the trust was $1.64 million; cash held in the trust was $450.0 million. Current liabilities were $1.30 million.
- Cash flow: Operating activities used $60,357 from inception. Financing activities provided $451.70 million, while $450.0 million was deposited into the trust account.
- Debt and obligations: No long-term debt was reported. The company had a $15.75 million deferred underwriting compensation liability payable only if a business combination is completed. A prior $300,000 sponsor loan was repaid.
- Equity and redemptions: Shareholders’ equity was $5.00 million. Of 45.0 million public Class A shares, 42.98 million were classified outside permanent equity as potentially redeemable at $10 per share.
Changes, outlook, and risks
There is no comparable prior-year quarter presented; the company began operations in February 2017 and held its IPO in June. Management said it had reviewed acquisition opportunities but could not determine whether any transaction would be completed. It expected continued, potentially significant, acquisition-search costs and noted it might need additional financing to meet operating needs or complete a transaction.
- The company had 24 months from the June 30, 2017 IPO closing to complete a business combination, extendable to 27 months if it entered into a qualifying agreement within the initial 24 months. If no transaction is completed, public shares are to be redeemed and the company wound up.
- Public shareholders may redeem shares in connection with a transaction, subject to a minimum net tangible assets requirement of $5,000,001.
- The sponsor’s trust-account indemnity may be difficult to collect: the company had not verified the sponsor’s ability to pay and believed its assets consisted mainly of company securities.
- The company disclosed no material changes to the risk factors in its IPO prospectus, no legal proceedings, and no subsequent events requiring disclosure. Management reported disclosure controls were effective.
Important facts for investors to verify
- Confirm the intended issuer: this filing is for TPG Pace Holdings Corp., not Accel Entertainment, Inc.
- Verify the trust balance, redemption terms, business-combination deadline, and any later transaction or extension.
- Review the company’s available cash against ongoing costs and any need for additional financing.
- Confirm the deferred underwriting fee and potential dilution from the warrants and founder shares.
- Consult the relevant Accel Entertainment filing for Accel-specific operating results, guidance, debt, liquidity, and risks; those facts are not provided here.