|
ITEM 2.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
References in this report (the
“Quarterly Report”) to “we,” “us” or the “Company” refer to Tiga
Acquisition Corp. References to our “management” or our “management
team” refer to our officers and directors, and references to the
“Sponsor” refer to Tiga Sponsor LLC. The following discussion and
analysis of the Company’s financial condition and results of
operations should be read in conjunction with the financial
statements and the notes thereto contained elsewhere in this
Quarterly Report. Certain information contained in the discussion
and analysis set forth below includes forward-looking statements
that involve risks and uncertainties.
Special Note
Regarding Forward-Looking Statements
This Quarterly Report includes
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933, as amended (the “Securities Act”) and
Section 21E of the Exchange Act that are not historical facts and
involve risks and uncertainties that could cause actual results to
differ materially from those expected and projected. All
statements, other than statements of historical fact included in
this Form 10-Q including, without limitation, statements in this
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” regarding the Company’s financial position,
business strategy and the plans and objectives of management for
future operations, are forward-looking statements. Words such as
“expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and
variations and similar words and expressions are intended to
identify such forward-looking statements. Such forward-looking
statements relate to future events or future performance, but
reflect management’s current beliefs, based on information
currently available. A number of factors could cause actual events,
performance or results to differ materially from the events,
performance and results discussed in the forward-looking
statements. For information identifying important factors that
could cause actual results to differ materially from those
anticipated in the forward-looking statements, please refer to the
Risk Factors section of the Annual Report on Form 10-K filed with
the U.S. Securities and Exchange Commission (the “SEC”). The
Company’s securities filings can be accessed on the EDGAR section
of the SEC’s website at www.sec.gov. Except as expressly required
by applicable securities law, the Company disclaims any intention
or obligation to update or revise any forward-looking statements
whether as a result of new information, future events or
otherwise.
Overview
We are a blank check company
incorporated in the Cayman Islands on July 27, 2020 formed for the
purpose of effecting a merger, amalgamation, share exchange, asset
acquisition, share purchase, reorganization or other similar
Business Combination with one or more businesses. We intend to
effectuate our Business Combination using cash derived from the
proceeds of the Initial Public Offering, the exercise in full of
the over-allotment option and the sale of the Private Placement
Warrants, our shares, debt or a combination of cash, shares and
debt.
We expect to continue to incur
significant costs in the pursuit of our acquisition plans. We
cannot assure you that our plans to complete a Business Combination
will be successful.
Recent
Developments
Business Combination
On May 9, 2022, Tiga entered into
an agreement and plan of merger with Tiga Merger Sub LLC, a
Delaware limited liability company and wholly owned subsidiary of
Tiga (“Merger Sub”), and Grindr (as it may be amended, restated,
supplemented or otherwise modified from time to time, the “Merger
Agreement”).
The Merger Agreement provides
that, among other things and upon the terms and subject to the
conditions thereof, the following transactions will occur (together
with the other transactions contemplated by the Merger Agreement,
including the Domestication (as defined below), the “Business
Combination Transaction”):
| |
(i)
|
at the closing of the Business
Combination Transaction (the “Closing”), in accordance with the
Delaware Limited Liability Company Act (“DGCL”), Merger Sub will
merge with and into Grindr, the separate corporate existence of
Merger Sub will cease, and Grindr will be the surviving corporation
and a wholly owned subsidiary of Tiga (the “Merger”); and
|
| |
(ii)
|
as a result of the Merger, among
other things, (x) each Grindr series X ordinary unit (“Grindr
Series X Ordinary Unit”) and each Grindr series Y preferred unit
(“Grindr Series Y Preferred Unit”, and together with the Grindr
Series X Ordinary Units, the “Grindr Units”) that is issued and
outstanding immediately prior to the Effective Time (as defined in
the Merger Agreement) shall be cancelled and converted into the
right to receive a number of shares of New Grindr Common Stock (as
defined below) equal to the quotient obtained by dividing (i) the Aggregate Merger
Consideration (defined below), by (ii) the number of Aggregate
Fully Diluted Grindr Units (as defined below) (the “Exchange
Ratio”); (y) each option to purchase Grindr Series X Ordinary Units
granted under the Company Incentive Plan (as defined in the Merger
Agreement) (“Grindr Option”) that is then outstanding and
unexercised shall be converted into the right to receive an option
relating to shares of New Grindr Common Stock upon substantially
the same terms and conditions as are in effect with respect to such
Grindr Option immediately prior to the Effective Time, including
with respect to vesting and termination-related provisions; and (z)
each Grindr Warrant (as defined below) that is outstanding
immediately prior to the Effective Time shall be converted into the
right to receive a warrant relating to shares of New Grindr Common
Stock with substantially the same terms and conditions as were
applicable to such warrant (excluding Grindr Options) to purchase
Grindr Units (“Grindr Warrant”). “Aggregate Merger Consideration”
means a number of shares of New Grindr Common Stock equal to the
quotient obtained by dividing (i) the sum of (a) the Grindr Valuation (as
defined below) plus (b)
the aggregate exercise price of all in-the-money Grindr Options and
all in-the-money Grindr Warrants that are issued and outstanding
immediately prior to the Effective Time by (ii) $10.00; and
“Aggregate Fully Diluted Grindr Units” means, without duplication,
the aggregate number of Grindr Units that are issued and
outstanding immediately prior to the Effective Time.
|
Under the Merger Agreement, Tiga
has agreed to acquire all Grindr Units for (i) the Grindr Valuation
plus (ii) the aggregate
exercise price of all in-the-money Grindr Options and all
in-the-money Grindr Warrants that are issued and outstanding
immediately prior to the Effective Time the in the form of New
Grindr Common Stock (at $10 per share) to be paid at the effective
time of the Business Combination. “Grindr Valuation” means
$1,584,000,000 plus the
amount, if any, by which the Permitted Distribution Amount
exceeds the Grindr
Distribution Amount; “Permitted Distribution Amount” means
$370,000,000 and “Grindr Distribution Amount” means the actual
amount of any cash dividend or other dividend or distribution in
respect of Grindr Units or equity interests Grindr makes, declares,
sets aside, establishes a record date for or makes a payment date
for between the date hereof and the Effective Time, provided that
the amount of any such dividend or distribution may not exceed the
Permitted Distribution Amount.
The Special Committee of Tiga has
unanimously approved and declared advisable the Merger Agreement
and the Business Combination. In addition, the Board of Directors
of Tiga (the “Board”) has unanimously (i) approved and declared
advisable the Merger Agreement and the Business Combination and
(ii) resolved to recommend approval of the Merger Agreement and
related matters by the shareholders of Tiga.
Prior to the Closing, subject to
the approval of Tiga’s shareholders, and in accordance with the
DGCL, Cayman Islands Companies Law (2020 Revision) (the “CICL”) and
Tiga’s Amended and Restated Memorandum and Articles of Association
(as may be amended from time to time, the “Cayman Constitutional
Documents”), Tiga will effect a deregistration under the CICL and a
domestication under Section 388 of the DGCL with the Secretary of
State of Delaware), pursuant to which Tiga’s jurisdiction of
incorporation will be changed from the Cayman Islands to the State
of Delaware (the “Domestication”). In connection with the
Domestication, Tiga, as the continuing entity in the Domestication,
will be renamed “Grindr Inc.” As used herein, “New Grindr” refers
to Tiga after the Domestication, including after such change of
name.
In connection with the
Domestication, (i) each of the then issued and outstanding Class A
ordinary shares, par value $0.0001 per share, of Tiga (the “Tiga
Class A Ordinary Shares”), will convert automatically, on a
one-for-one basis, into a share of common stock, par value $0.0001
per share of New Grindr (the “New Grindr Common Stock”), (ii) each
of the then issued and outstanding Class B ordinary shares, par
value $0.0001 per share, of Tiga (the “Tiga Class B Ordinary
Shares”), will convert automatically, on a one-for-one basis, into
a share of New Grindr Common Stock, (iii) each then issued and
outstanding warrant of Tiga will convert automatically into a
warrant to acquire one share of New Grindr Common Stock (“New
Grindr Warrant”), pursuant to the Warrant Agreement, dated November
23, 2020, between Tiga and Continental Stock Transfer & Trust
Company, as warrant agent, and (iv) each then issued and
outstanding unit of Tiga will separate and convert automatically
into one share of New Grindr Common Stock and one-half of one New
Grindr Warrant.
Forward Purchase Agreement
On May 9, 2022, concurrently with
the execution of the Merger Agreement, the Company entered into an
amended and restated forward purchase agreement (the “A&R FPA”)
with the Sponsor. The A&R FPA replaces the FPA that was entered
into in connection with the closing of the Initial Public Offering.
The A&R FPA provides for the purchase by the forward purchaser
of an aggregate of 5,000,000 Class A ordinary shares, plus an
aggregate of 2,500,000 forward purchase warrants to purchase one
share of New Grindr Common Stock at $11.50 per share, for an
aggregate purchase price of $50,000,000, or $10.00 per Class A
Ordinary share, in a private placement to close prior to or
concurrently with the closing of a Business Combination. In
addition, to the extent that the
Non-FPS Amount (as defined in the A&R FPA) is less than
$50,000,000 immediately prior to the closing of a Business
Combination but following the
Domestication, the forward purchaser has agreed pursuant to the
A&R FPA to purchase (a) a number of shares of Class A
ordinary shares (the “backstop
shares”) equal to (A) (x) $50,000,000 minus (y) the Non-FPS Amount,
divided by (B) $10.00, rounded down to the nearest whole number and
(b) a number of redeemable warrants (the “backstop warrants”) equal
to (I) the number of backstop shares in clause (a) multiplied by
(II) 0.5, rounded down to the nearest whole number. In addition to
the foregoing, the forward purchaser may, at its discretion
(regardless of the Non-FPS Amount), subscribe for up to 5,000,000
backstop shares plus up to 2,500,000 backstop warrants at $11.50
per share, for an aggregate purchase price of $50,000,000, or
$10.00 for each backstop share and one-half of one backstop
warrant.
Convertible
Promissory Note
On January 25, 2022, March 31,
2022, May 12, 2022, and June 27, 2022, the Sponsor had advanced the
sum of $750,000, $300,000, $430,000, and $200,000, respectively, to
the Company on account of the Note. All unpaid principal
under the Note shall be due and payable in full on the effective
date of the Company’s initial business combination, unless
accelerated upon the occurrence of an event of default. At June 30,
2022, there was $1,680,000 outstanding under this Note and the
amount available for withdrawal under the Note totaled
$320,000.
Transaction Support Agreement
On May 9, 2022, concurrently with
the execution of the Merger Agreement, Grindr, Tiga, Merger Sub,
the Sponsor and the directors of Tiga entered into the Transaction
Support Agreement. Pursuant to the terms of the Transaction Support
Agreement, the Sponsor and the directors of Tiga agreed to, among
other things, vote or cause its shares to vote in favor of the
Business Combination Proposal (as defined in the Merger Agreement)
and the other proposals included in the accompanying proxy
statement/prospectus.
Unitholder Support Agreement
In connection with the execution
of the Merger Agreement, Tiga entered into a support agreement (the
“Unitholder Support Agreement”) with Grindr and certain unitholders
of Grindr (the “Requisite Unitholders”). Pursuant to the Unitholder
Support Agreement, the Requisite Unitholders agreed to, among other
things, vote to adopt and approve the Merger Agreement, the Merger
and any other matters necessary or reasonably requested by Tiga for
the consummation of the Merger, in each case, subject to the terms
and conditions of the Unitholder Support Agreement.
A&R Registration Rights Agreement
The Merger Agreement contemplates
that, at the Closing, New Grindr, the Sponsor, the independent
directors of Tiga and certain securityholders of Grindr will enter
into the Amended and Restated Registration Rights Agreement (the
“A&R Registration Rights Agreement”), pursuant to which New
Grindr will agree to register for resale, pursuant to Rule 415
under the Securities Act of 1933, as amended (the “Securities
Act”), certain shares of New Grindr Common Stock and other equity
securities of New Grindr that are held by the parties thereto from
time to time.
Results of Operations
We have neither engaged in any
operations nor generated any operating revenues to date. Our only
activities from inception through June 30, 2022 were organizational
activities and those necessary to prepare for the Initial Public
Offering, described below, and, after the Initial Public Offering,
identifying a target for a Business Combination. We do not expect
to generate any operating revenues until after the completion of
our initial Business Combination. We expect to generate
non-operating income in the form of interest income on marketable
securities held after the Initial Public Offering. We expect that
we will incur increased expenses as a result of being a public
company (for legal, financial reporting, accounting and auditing
compliance), as well as for due diligence expenses in connection
with searching for, and completing, a Business Combination.
For the three months ended June
30, 2022, we had a net loss of $7,518,082 which consisted of
operating costs of $3,037,584, a change in fair value of warrant
liabilities (Public Warrants and Private Placement Warrants) of
$4,031,433, a change in fair value of FPA liabilities of $731,176
and a fair value of private placement in excess of purchase price
of $81,153, offset by interest earned on marketable securities held
in the Trust Account of $363,264. Operating costs consisted of
$2,883,230 in M&A related costs, $60,010 in accounting related
costs, $30,000 in administrative support fees, $31,250 in insurance
costs, and $33,094 in miscellaneous costs.
For the six months ended June 30,
2022, we had a net income of $491,251 which consisted of a change
in fair value of warrant liabilities (Public Warrants and Private
Placement Warrants) of $4,926,361 and interest earned on marketable
securities held in the Trust Account of $402,994, offset by an
operating costs of $4,243,935, change in fair value of FPA
liabilities of $513,016 and a fair value of private placement in
excess of purchase price of $81,153. Operating costs consisted of
$3,921,059 in M&A related costs, $109,306 in accounting related
costs, $60,000 in administrative support fees, $62,500 in insurance
costs, and $91,070 in miscellaneous costs.
For the three months ended June
30, 2021, we had a net income of $5,425,883 which consisted of a
gain from change in fair value of warrant liability (Public
Warrants and Private Placement Warrants) of $4,205,105, a gain from
change in fair value of FPA liability of $1,787,878, a gain in the
fair value of Private Placement Warrants in excess of purchase
price of $79,548 and interest earned on marketable securities held
in the Trust Account of $3,355, offset by operating costs of
$650,003 which consisted of $442,613 in legal fees, $75,475 in
accounting related costs, $30,000 in administrative support fees,
$31,250 in insurance costs, and $70,665 in miscellaneous
costs.
For the six months ended June 30,
2021, we had a net income of $10,998,009, which consisted of a gain
from change in fair value of warrant liability (Public Warrants and
Private Placement Warrants) of $11,534,063, a gain from change in
fair value of FPA liability of $184,109, a gain in the fair value
of Private Placement Warrants in excess of purchase price of
$79,548 and interest earned on marketable securities held in the
Trust Account of $35,076, offset by operating costs of $834,787
which consisted of $513,016 in legal fees, $112,770 in accounting
related costs, $60,000 in administrative support fees, $62,500 in
insurance costs, and $86,501 in miscellaneous costs.
Liquidity and
Going Concern
As of June 30, 2022, we had cash
of $165,655. Until the consummation of the Public Offering, our
only source of liquidity was an initial purchase of ordinary shares
by the Sponsor and loans from our Sponsor.
On November 27, 2020, we
consummated the Initial Public Offering of 27,600,000 Units, which
included the full exercise by the underwriters of their
over-allotment option in the amount of 3,600,000 Units, at a price
of $10.00 per Unit, generating gross proceeds of $276,000,000.
Simultaneously with the closing of the Initial Public Offering, we
consummated the sale of 10,280,000 Initial Private Placement
Warrants to the Sponsor at a price of $1.00 per private placement
warrant generating gross proceeds of $10,280,000.
Following the Initial Public
Offering, the full exercise of the over-allotment option, and the
Initial Private Placement, a total of $278,760,000 was placed in
the Trust Account. We incurred $15,736,649 in transaction costs,
including $5,520,000 of underwriting fees, $9,660,000 of deferred
underwriting fees and $556,649 of other offering costs. On May 18,
2021, November 17, 2021, and May 23, 2022, respectively, the
Company announced the approval and extension of the time period to
consummate a Business Combination and the approval of the issuance
and sale of certain private placement warrants in connection
therewith. On May 20, 2021, November 22, 2021, and May 24, 2022,
respectively, the required deposit of $2,760,000 was placed into
the Trust Account and on May 25, 2021, November 23, 2021, and May
25, 2022, respectively, the Company issued and sold to the Sponsor
2,760,000 Extension Private Placement Warrants. The total amount of
outstanding Private Placement Warrants is 18,560,000 and the total
deposits into the Trust Account have been $287,040,000 ($10.40 per
public share).
On March 16, 2022, the Board of
Directors of the Company authorized the execution and delivery of a
Convertible Promissory Note in the principal amount of $2,000,000
(the “Note”) to the Sponsor, as part of the Working Capital Loans.
On January 25, 2022, March 31, 2022, May 12, 2022, and June 27,
2022, the Sponsor had advanced the sum of $750,000, $300,000,
$430,000, and $200,000, respectively, to the Company on account of
the Note. All unpaid principal under the Note shall be due and
payable in full on the effective date of the Company’s initial
business combination, unless accelerated upon the occurrence of an
event of default. At June 30, 2022, there was $1,680,000
outstanding under this note. All unpaid principal under the Note
shall be due and payable in full on the effective date of our
initial business combination, unless accelerated upon the
occurrence of an event of default.
We intend to use substantially
all of the funds held in the Trust Account, including any amounts
representing interest earned on the Trust Account, which interest
shall be net of taxes payable and excluding deferred underwriting
commissions, to complete our Business Combination. We may withdraw
interest from the Trust Account to pay taxes, if any. To the extent
that our share capital or debt is used, in whole or in part, as
consideration to complete a Business Combination, the remaining
proceeds held in the Trust Account will be used as working capital
to finance the operations of the target business or businesses,
make other acquisitions and pursue our growth strategies.
As of June 30, 2022, we had cash
of $165,655. We intend to use the funds held outside the Trust
Account primarily to identify and evaluate target businesses,
perform business due diligence on prospective target businesses,
travel to and from the offices, plants or similar locations of
prospective target businesses or their representatives or owners,
review corporate documents and material agreements of prospective
target businesses, and structure, negotiate and complete a Business
Combination.
We will need to raise additional
capital through loans or additional investments from our initial
shareholders, officers or directors. If we are unable to raise
additional capital, we may be required to take additional measures
to conserve liquidity, which could include, but not necessarily be
limited to, curtailing operations, suspending the pursuit of a
potential transaction, and reducing overhead expenses. We cannot
provide any assurance that new financing will be available to us on
commercially acceptable terms, if at all. These conditions raise
substantial doubt about our ability to continue as a going concern
through one year and one day from the issuance of this Form 10-Q
.
In connection with the Company’s
assessment of going concern considerations in accordance with
Financial Accounting Standards Board (“FASB”) Accounting Standards
Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an
Entity’s Ability to Continue as a Going Concern,” the Company has
until November 27, 2022 to consummate a Business Combination. It is
uncertain that the Company will be able to consummate a Business
Combination by this time. If a Business Combination is not
consummated by this date and an extension not requested by the
Sponsor, there will be a mandatory liquidation and subsequent
dissolution of the Company. Management has determined that the
liquidity conditions and mandatory liquidation, should a Business
Combination not occur, and an extension is not requested by the
Sponsor, and potential subsequent dissolution raises substantial
doubt about the Company’s ability to continue as a going concern.
The Company intends to complete its Business Combination. No
adjustments have been made to the carrying amounts of assets or
liabilities should the Company be required to liquidate after
November 27, 2022.
Off-Balance Sheet Financing
Arrangements
We have no obligations, assets or
liabilities, which would be considered off-balance sheet
arrangements as of June 30, 2022. We do not participate in
transactions that create relationships with unconsolidated entities
or financial partnerships, often referred to as variable interest
entities, which would have been established for the purpose of
facilitating off-balance sheet arrangements. We have not entered
into any off-balance sheet financing arrangements, established any
special purpose entities, guaranteed any debt or commitments of
other entities, or purchased any non-financial assets.
Contractual Obligations
We do not have any long-term
debt, capital lease obligations, operating lease obligations or
long-term liabilities, other than an agreement to pay an affiliate
of the Sponsor a monthly fee of $10,000 for overhead expenses and
related services provided to the Company. We began incurring these
fees on November 23, 2020 and will continue to incur these fees
monthly until the earlier of the completion of a Business
Combination and the Company’s liquidation.
The underwriters are entitled to
a deferred fee of $0.35 per Unit, or $9,660,000 in the aggregate.
The deferred fee will become payable to the underwriters from the
amounts held in the Trust Account solely in the event that we
complete a Business Combination, subject to the terms of the
underwriting agreement. However, one of the underwriters, Goldman
Sachs (Asia) L.L.C., has agreed to waive its rights to the deferred
underwriting in connection with its decision not to provide further
services as a financial advisor, placement agent, capital markets
advisor or in any other capacity in connection with closing of the
Business Combination.
We entered into a private
placement warrants purchase agreement, dated as of November 23,
2020, with the Sponsor which provides that at the option of the
Sponsor, on the dates that are 6, 12 and 18 months, respectively
from the closing date of the Initial Public Offering, the Company
shall issue and sell to the Sponsor, its affiliates or permitted
designees and the Sponsor shall purchase from the Company, an
additional 2,760,000, private placement warrants at a price of
$1.00 per private placement warrant for an aggregate purchase price
of $2,760,000. At June 30, 2022, the private placement warrants
purchase agreement has been fulfilled.
We entered into a forward
purchase agreement with the Sponsor or an affiliate of the Sponsor
which provides for the purchase by the Sponsor of an aggregate of
5,000,000 Class A ordinary shares, plus an aggregate of 2,500,000
forward purchase warrants to purchase one Class A ordinary share at
$11.50 per share, for an aggregate purchase price of $50,000,000,
or $10.00 per Class A ordinary share, in a private placement to
close prior to or concurrently with the closing of a Business
Combination. Pursuant to the forward purchase agreement, the
forward purchaser was also granted an option to subscribe, in the
forward purchaser’s sole discretion, for an additional 5,000,000
Class A ordinary shares plus an additional 2,500,000 redeemable
warrants to purchase one Class A ordinary share at $11.50 per
share, for an additional purchase price of $50,000,000, or $10.00
per Class A ordinary share, in one or multiple private placements
to close prior to or concurrently with the closing of our initial
business combination. The obligations under the forward purchase
agreement do not depend on whether any Class A ordinary shares are
redeemed by the Public Shareholders. The forward purchase warrants
will have the same terms as the public warrants issued as part of
the Units.
On May 9, 2022, concurrently with
the execution of the Merger Agreement, the Company entered into an
amended and restated forward purchase agreement (the “A&R FPA”
or “Forward Purchase Agreement”) with the Sponsor. The A&R FPA
replaces the FPA that was entered into in connection with the
closing of the Initial Public Offering. The A&R FPA
provides for the purchase by the forward purchaser of an aggregate
of 5,000,000 Class A ordinary shares, plus an aggregate of
2,500,000 forward purchase warrants to purchase one share of New
Grindr Common Stock at $11.50 per share, for an aggregate purchase
price of $50,000,000, or $10.00 per Class A ordinary share , in a
private placement to close prior to or concurrently with the
closing of a Business Combination. In addition, to the extent that the Non-FPS Amount (as
defined in the A&R FPA) is less than $50,000,000 immediately
prior to the closing of a Business Combination but following the Domestication, the forward
purchaser has agreed pursuant to the A&R FPA to purchase (a) a
number of shares of Class A ordinary shares (the “backstop shares”) equal to (A) (x)
$50,000,000 minus (y) the Non-FPS Amount, divided by (B) $10.00,
rounded down to the nearest whole number and (b) a number of
redeemable warrants (the “backstop warrants”) equal to (I) the
number of backstop shares in clause (a) multiplied by (II) 0.5,
rounded down to the nearest whole number. In addition to the
foregoing, the forward purchaser may, at its discretion (regardless
of the Non-FPS Amount), subscribe for up to 5,000,000 backstop
shares plus up to 2,500,000 backstop warrants at $11.50 per share,
for an aggregate purchase price of $50,000,000, or $10.00 for each
backstop share and one-half of one backstop warrant.
Critical Accounting Policies
The preparation of condensed
consolidated financial statements and related disclosures in
conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities at the
date of the condensed consolidated financial statements, and income
and expenses during the periods reported. Actual results could
materially differ from those estimates. We identified the following
critical accounting policies:
Warrant and
Forward Purchase Agreement (FPA) Liability
The Company accounts for the
Warrants and FPA in accordance with the guidance contained in ASC
815-40, under which the Warrants and FPA do not meet the criteria
for equity treatment and must be recorded as liabilities.
Accordingly, the Company classifies the Warrants and FPA as
liabilities at their fair value and adjusts the Warrants and FPA to
fair value at each reporting period. These liabilities are subject
to re-measurement at each balance sheet date until exercised, and
any change in fair value is recognized in the statements of
operations. Changes in the estimated fair value of the warrants and
FPA are recognized as a non-cash gain or loss on the statements of
operations.
The Public Warrants for periods
where no observable trade price was available are valued using a
Monte Carlo simulation. For periods subsequent to the detachment of
the Public Warrants from the Units, the Public Warrant quoted
market price was used as the fair value as of each relevant date.
The fair value of the Private Placement Warrants was determined
using a Black-Scholes-Merton model. The committed units of the FPA
are valued using a discounted valuation of a reconstructed unit
price and the optional units of the FPA are valued using the same
reconstructed unit price within a Black-Scholes-Merton model
framework.
Convertible
Promissory Note
The Company accounts for its
Convertible Note under ASC 815, “Derivatives and Hedging” (“ASC
815”). Under 815-15-25, an election can be made at the inception of
a financial instrument to account for the instrument under the fair
value option under ASC 825. The Company has made such election for
its Convertible Note. Using the fair value option, the Convertible
Note is required to be recorded at its initial fair value on the
date of issuance, and each balance sheet date thereafter. Changes
in the estimated fair value of the Convertible Note is recognized
as a non-cash gain or loss on the condensed statements of
operations.
The Company has determined the
fair value of the note is more accurately recorded at par since the
conversion price is almost 150% higher than the value of the
warrants. No arms-length transaction by a note holder would result
in a conversion with this fact pattern, thus it is a more accurate
depiction with recording at par. As such, no fair value change was
booked to the statement of operations.
Class A
Ordinary Shares Subject to Possible Redemption
We account for our ordinary
shares subject to possible redemption in accordance with the
guidance in Accounting Standards Codification (“ASC”) Topic 480
“Distinguishing Liabilities from Equity.” Class A Ordinary shares
subject to mandatory redemption (if any) are classified as a
liability instrument and are measured at fair value. Conditionally
redeemable ordinary shares (including ordinary shares that feature
redemption rights that are either within the control of the holder
or subject to redemption upon the occurrence of uncertain events
not solely within our control) are classified as temporary equity.
At all other times, ordinary shares are classified as shareholders’
equity. Our Class A ordinary shares feature certain redemption
rights that are considered to be outside of our control and subject
to occurrence of uncertain future events. Accordingly, Class A
ordinary shares subject to possible redemption are presented as
temporary equity, outside of the shareholders’ deficit section of
our balance sheets.
Net Income
(Loss) per Ordinary Share
Net income (loss) per ordinary
share is computed by dividing net income (loss) by the weighted
average number of ordinary shares outstanding during the period.
The net income or loss is allocated to each class of shares using
an allocation of total shares, which is then divided by the total
shares for the respective class.
We did not consider the effect of
the warrants issued in connection with the initial public offering
and the private placement in the calculation of diluted income per
share because their exercise is contingent upon future events. As a
result, diluted net income per ordinary share is the same as basic
net income per ordinary share. Accretion associated with the
redeemable Class A ordinary shares is excluded from income per
ordinary share as the redemption value approximates fair
value.
Recent
Accounting Standards
In June 2016, the Financial
Accounting Standards Board (“FASB”) issued Accounting Standards
Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic
326): Measurement of Credit Losses on Financial Instruments, which
requires entities to measure all expected credit losses for
financial assets held at the reporting date based on historical
experience, current conditions, and reasonable and supportable
forecasts. ASU 2016-13 also requires additional disclosures
regarding significant estimates and judgments used in estimating
credit losses, as well as the credit quality and underwriting
standards of an entity’s portfolio. The Company expects to adopt
the provisions of this guidance on January 1, 2023. The adoption is
not expected to have a material impact on the Company’s condensed
financial statements.
Besides the above, the Company’s
management does not believe that any recently issued, but not yet
effective, accounting standards, if currently adopted. would have a
material effect on the accompanying condensed financial
statements.
JOBS Act
The Jumpstart Our Business
Startups Act of 2012 (the “JOBS Act”) contains provisions that,
among other things, relax certain reporting requirements for
qualifying public companies. We qualify as an “emerging growth
company” and under the JOBS Act are allowed to comply with new or
revised accounting pronouncements based on the effective date for
private (not publicly traded) companies. We are electing to delay
the adoption of new or revised accounting standards, and as a
result, we may not comply with new or revised accounting standards
on the relevant dates on which adoption of such standards is
required for non-emerging growth companies. As a result, our
financial statements may not be comparable to companies that comply
with new or revised accounting pronouncements as of public company
effective dates.
Additionally, we are in the
process of evaluating the benefits of relying on the other reduced
reporting requirements provided by the JOBS Act. Subject to certain
conditions set forth in the JOBS Act, if, as an “emerging growth
company,” we choose to rely on such exemptions we may not be
required to, among other things, (i) provide an auditor’s
attestation report on our system of internal controls over
financial reporting pursuant to Section 404, (ii) provide all of
the compensation disclosure that may be required of non-emerging
growth public companies under the Dodd-Frank Wall Street Reform and
Consumer Protection Act, (iii) comply with any requirement that may
be adopted by the PCAOB regarding mandatory audit firm rotation or
a supplement to the auditor’s report providing additional
information about the audit and the financial statements (auditor
discussion and analysis) and (iv) disclose certain executive
compensation related items such as the correlation between
executive compensation and performance and comparisons of the CEO’s
compensation to median employee compensation. These exemptions will
apply for a period of five years following the completion of our
Initial Public Offering or until we are no longer an “emerging
growth company,” whichever is earlier.
|
ITEM 3.
|
QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
We are a smaller reporting
company as defined by Rule 12b-2 of the Exchange Act and are not
required to provide the information otherwise required under this
item.
|
ITEM 4.
|
CONTROLS AND
PROCEDURES
|
Evaluation of
Disclosure Controls and Procedures
Disclosure controls and
procedures are designed to ensure that information required to be
disclosed by us in our Exchange Act reports is recorded, processed,
summarized, and reported within the time periods specified in the
SEC’s rules and forms, and that such information is accumulated and
communicated to our management, including our principal executive
officer and principal financial officer or persons performing
similar functions, as appropriate to allow timely decisions
regarding required disclosure.
As required by Rules13a-15 and
15d-15 under the Exchange Act, our Chief Executive Officer and
Chief Financial Officer carried out an evaluation of the
effectiveness of the design and operation of our disclosure
controls and procedures as of June 30, 2022. Based on this
evaluation, our Chief Executive Officer and Chief Financial Officer
have concluded that our disclosure controls and procedures were
effective.
Remediation
of a Material Weakness in Internal Control Over Financial
Reporting
We recognize the importance of
the control environment as it sets the overall tone for the Company
and is the foundation for all other components of internal control.
Consequently, we designed and implemented remediation measures to
address the material weakness related to the Company’s financial
reporting of complex financial instruments and enhance our internal
control over financial reporting. In light of the material
weakness, we enhanced our processes to identify and appropriately
apply applicable accounting requirements to better evaluate and
understand the nuances of the complex accounting standards that
apply to our financial statements, including providing enhanced
access to accounting literature, research materials and documents.
The foregoing actions were completed as of March 31, 2022, and we
believe we have remediated the material weakness in internal
control over financial reporting.
Changes in
Internal Control Over Financial Reporting
There were no changes in our
internal control over financial reporting (as such term is defined
in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the
most recent fiscal quarter that have materially affected, or are
reasonably likely to materially affect, our internal control over
financial reporting. Based on the evaluation we conducted, other
than remediation of the material weakness identified and discussed
above, our management has concluded that no such changes have
occurred.
PART II - OTHER
INFORMATION
|
ITEM 1.
|
LEGAL
PROCEEDINGS.
|
None.
Factors that could cause our
actual results to differ materially from those in this Quarterly
Report are any of the risks described in our amended Annual Report
on Form 10-K for the period ended December 31, 2021 as filed with
the SEC on March 22, 2022 and the Company's Form S-4/A filed with
the SEC on August 3, 2022. Any of these factors could result in a
significant or material adverse effect on our results of operations
or financial condition. Additional risk factors not presently known
to us or that we currently deem immaterial may also impair our
business or results of operations. As of the date of this Quarterly
Report, other than as described below, there have been no material
changes to the risk factors disclosed in our amended Annual Report
on Form 10-K for the period ended December 31, 2021 as filed with
the SEC on March 22, 2022 and the Company's Form S-4/A filed with
the SEC on August 3, 2022. We may disclose changes to such factors
or disclose additional factors from time to time in our future
filings with the SEC.
|
ITEM 2.
|
UNREGISTERED SALES OF
EQUITY SECURITIES AND USE OF PROCEEDS.
|
On November 27, 2020, we
consummated the Initial Public Offering of 27,600,000 Units,
inclusive of 3,600,000 Units sold to the underwriters upon the
underwriters’ election to fully exercise their over-allotment
option, at a price of $10.00 per Unit, generating total gross
proceeds of $276,000,000. The securities sold in the offering were
registered under the Securities Act on registration statements on
Form S-1 (No. 333-249853 and 333-250902). The registration
statements became effective on November 23, 2020.
Simultaneously with the
consummation of the Initial Public Offering and the full exercise
of the over-allotment option, we consummated a private placement of
10,280,000 Initial Private Placement Warrants to our Sponsor at a
price of $1.00 per Initial Private Placement Warrant, generating
total proceeds of $10,280,000. Such securities were issued pursuant
to the exemption from registration contained in Section 4(a)(2) of
the Securities Act. On May 18, 2021, November 17, 2021, and May 23,
2022, respectively, the Company announced the approval and
extension of the time period to consummate a Business Combination
and the approval of the issuance and sale of certain private
placement warrants in connection therewith. On May 20, 2021,
November 22, 2021, and May 24, 2022, respectively, the required
deposit of $2,760,000 was placed into the Trust Account and on May
25, 2021, November 23, 2021 and May 25, 2022, respectively, the
Company issued and sold to the Sponsor 2,760,000 Extension Private
Placement Warrants. The total amount of outstanding Private
Placement Warrants is 18,560,000 as of the date of this
filing.
The Private Placement Warrants
are identical to the Public Warrants underlying the Units sold in
the Initial Public Offering, except that the Private Placement
Warrants are not transferable, assignable or salable until 30 days
after the completion of a Business Combination, subject to certain
limited exceptions.
Of the gross proceeds received
from the Initial Public Offering including the over-allotment
option, and the sale of the Private Placement Warrants,
$287,040,000 was placed in the Trust Account.
We paid a total of $5,520,000 in
underwriting discounts and commissions and $556,649 for other
offering costs related to the Initial Public Offering. In addition,
the underwriters agreed to defer $9,660,000 in underwriting
discounts and commissions.
For a description of the use of
the proceeds generated in the Initial Public Offering, see Part I,
Item 2 of this Form 10-Q.
|
ITEM 3.
|
DEFAULTS UPON SENIOR
SECURITIES.
|
None.
|
ITEM 4.
|
MINE SAFETY
DISCLOSURES.
|
Not applicable.
|
ITEM 5.
|
OTHER INFORMATION.
|
None.
The following exhibits are filed
as part of, or incorporated by reference into, this Quarterly
Report on Form 10-Q.
|
No.
|
|
Description of Exhibit
|
|
|
|
Agreement and
Plan of Merger, dated as of May 9, 2022, by and among Tiga
Acquisition Corp., Tiga Merger Sub LLC and Grindr Group LLC
(incorporated by reference to Exhibit 2.1 to Tiga Acquisition
Corp.’s Current Report on Form 8-K filed on May 9, 2022).
|
|
|
|
Amended and
Restated Forward Purchase Agreement, dated as of May 9, 2022, by
and among Tiga Acquisition Corp., and Tiga Sponsor LLC
(incorporated by reference to Exhibit 10.1 to Tiga Acquisition
Corp.’s Current Report on Form 8-K filed on May 9, 2022).
|
|
|
|
Transaction
Support Agreement, dated as of May 9, 2022, by and among Tiga
Acquisition Corp., Tiga Merger Sub LLC, Tiga Sponsor LLC., and the
individuals named therein (incorporated by reference to Exhibit
10.2 to Tiga Acquisition Corp.’s Current Report on Form 8-K filed
on May 9, 2022).
|
|
|
|
Form of
Unitholder Support Agreement (incorporated by reference to Exhibit
10.3 to Tiga Acquisition Corp.’s Current Report on Form 8-K filed
on May 9, 2022).
|
|
|
|
Form of
Amended & Restated Registration Rights Agreement, by and among
New Grindr, Tiga Sponsor LLC, the independent directors of Tiga and
certain former stockholders of Grindr (incorporated by reference to
Exhibit 10.4 to Tiga Acquisition Corp.’s Current Report on Form 8-K
filed on May 9, 2022).
|
|
|
|
Certification
of Principal Executive Officer Pursuant to Securities Exchange Act
Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002
|
|
|
|
Certification
of Principal Financial Officer Pursuant to Securities Exchange Act
Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002
|
|
|
|
Certification
of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350,
as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
|
|
|
Certification
of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350,
as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
|
101.INS*
|
|
XBRL Instance
Document
|
|
101.CAL*
|
|
XBRL Taxonomy
Extension Calculation Linkbase Document
|
|
101.SCH*
|
|
XBRL Taxonomy
Extension Schema Document
|
|
101.DEF*
|
|
XBRL Taxonomy
Extension Definition Linkbase Document
|
|
101.LAB*
|
|
XBRL Taxonomy
Extension Labels Linkbase Document
|
|
101.PRE*
|
|
XBRL Taxonomy
Extension Presentation Linkbase Document
|
|
†
|
Schedules and exhibits have been omitted pursuant to Item
601(b)(2) of Regulation S-K. Tiga Acquisition Corp. agrees to
furnish supplementally a copy of any omitted schedule or exhibit to
the SEC upon request.
|
Pursuant to the requirements of
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
|
|
TIGA ACQUISITION CORP.
|
|
|
|
|
|
|
|
/s/ George Raymond Zage III
|
|
|
Name:
|
George Raymond Zage III
|
|
|
Title:
|
Chief Executive Office and Chairman
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Diana Luo
|
|
|
Name:
|
Diana Luo
|
|
|
Title:
|
Chief Financial Officer
|
|
|
|
(Principal Financial and Accounting Officer)
|
31