Grid Dynamics(GDYN) - 2019 Q2 - Quarterly Report

PART 1 – FINANCIAL INFORMATION This section presents the unaudited financial statements and related disclosures for the company's interim period Financial Statements Unaudited financial statements as of June 30, 2019, show $223.8 million in assets, $1.49 million net income, and a going concern uncertainty Condensed Balance Sheets As of June 30, 2019, total assets were $223.8 million, primarily in a Trust Account, with $8.1 million in liabilities Condensed Balance Sheet Data (Unaudited) | Account | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Assets | | | | Cash | $659,543 | $1,011,224 | | Cash and marketable securities held in Trust Account | $222,993,855 | $221,158,467 | | Total Assets | $223,828,599 | $222,364,173 | | Liabilities & Equity | | | | Total Current Liabilities | $415,607 | $445,120 | | Deferred underwriting fees | $7,700,000 | $7,700,000 | | Total Liabilities | $8,115,607 | $8,145,120 | | Common stock subject to possible redemption | $210,712,990 | $209,219,050 | | Total Stockholders' Equity | $5,000,002 | $5,000,003 | Condensed Statements of Operations Net income for the six months ended June 30, 2019, was $1.49 million, primarily from interest on Trust Account securities Statement of Operations Highlights (Unaudited) | Metric | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | | Interest earned on marketable securities | $1,317,860 | $2,617,791 | | General and administrative expenses | $278,012 | $595,223 | | Net income | $773,705 | $1,493,939 | | Basic and diluted income per share, Class A | $0.05 | $0.09 | Condensed Statements of Cash Flows Net cash used in operating activities was $1.13 million, with a $351,681 decrease in cash balance for the six months ended June 30, 2019 Cash Flow Summary for Six Months Ended June 30, 2019 (Unaudited) | Cash Flow Activity | Amount | | :--- | :--- | | Net cash used in operating activities | ($1,134,084) | | Net cash provided by investing activities | $782,403 | | Net cash provided by financing activities | $0 | | Net Change in Cash | ($351,681) | | Cash – End of period | $659,543 | Notes to Condensed Financial Statements Notes detail the company's SPAC nature, April 2020 business combination deadline, going concern uncertainty, related party transactions, and $7.7 million in deferred underwriting fees - The Company is a blank check company formed to effect a business combination, intending to focus on the technology industry[20][21] - The company has until April 9, 2020, to consummate a Business Combination, otherwise it will cease operations and redeem public shares[33] - Management has determined that the mandatory liquidation and subsequent dissolution raises substantial doubt about the Company's ability to continue as a going concern[38] - The company pays an affiliate of the Sponsor $15,000 per month for office space, utilities, and administrative support[66] - Underwriters are entitled to a deferred fee of $7,700,000, payable from the Trust Account only upon completion of a Business Combination[71] Management's Discussion and Analysis of Financial Condition and Results of Operations The blank check company reported $1.49 million net income from Trust Account interest, with $659,543 cash for working capital, and may need additional financing for a business combination - The company is a blank check company formed on May 21, 2018, to effect a business combination, with no operations or revenues to date[89][93] Results of Operations Summary | Period | Net Income / (Loss) | Key Drivers | | :--- | :--- | :--- | | Three Months Ended June 30, 2019 | $773,705 | $1.32M interest income, offset by $278K operating costs and $266K taxes | | Six Months Ended June 30, 2019 | $1,493,939 | $2.62M interest income, offset by $595K operating costs and $529K taxes | - As of June 30, 2019, the company had $659,543 in cash held outside the Trust Account available for working capital purposes[96] - A total of $220 million was placed in the Trust Account following the IPO and exercise of the over-allotment option[99] - The Sponsor may provide up to $1,500,000 in Working Capital Loans, which may be convertible into units at $10.00 per unit at the lender's option[103] Quantitative and Qualitative Disclosures about Market Risk The company's market risk is considered minimal due to its investment strategy in short-term U.S. government securities - The company believes there is no material exposure to interest rate risk due to its investment strategy of holding short-term U.S. government securities[109] Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2019, with no material changes to internal controls - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2019[111] - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[112] PART II – OTHER INFORMATION This section provides updates on legal proceedings, risk factors, equity sales, and exhibits Legal Proceedings The company has no legal proceedings to report - None[114] Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - As of the date of this report, there have been no material changes to the risk factors disclosed in the company's Annual Report on Form 10-K[115] Unregistered Sales of Equity Securities and Use of Proceeds The company reports no unregistered sales of equity securities or use of proceeds for the period - None[116] Exhibits This section lists the exhibits filed as part of the Quarterly Report on Form 10-Q, including officer certifications and XBRL data files - The report includes exhibits such as CEO/CFO certifications (302 and 906) and XBRL data files[122]