Grid Dynamics Holdings, Inc 8-K, filed Mar 9, 2020

Grid Dynamics Holdings, Inc. (GDYN)

8-K 2020-03-09 For: 2020-03-05

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Added on April 10, 2026

About this 8-K

Grid Dynamics Holdings, Inc filed this 8-K on March 9, 2020, reporting on events of March 5, 2020.

Items reported

Item 2.01: Completed an acquisition or sale of assets
Item 3.01: Delisting notice or listing transfer
Item 3.03: Change to shareholders' rights
Item 5.01: Change in control
Item 5.02: Director or officer change, or executive pay
Item 5.06: Change in shell company status
Item 9.01: Financial statements and exhibits

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Delaware		001-38685		83-0632724
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

(in thousands)	As of and for the Year Ended December 31, 2019			As of and for the Year Ended December 31, 2018			As of and for the Year Ended December 31, 2017

Statement of Operations Data:
Total revenue	$	118,326		$	91,865		$	70,684
Income from operations		15,625			13,829			13,107
Net income		10,807			9,228			13,184

Basic earnings per share		0.83			0.77			0.82
Diluted earnings per share		0.83			0.77			0.78

Balance Sheet Data
Total assets		71,531			41,726			N/A
Total liabilities		8,300			8,347			N/A
Convertible preferred stock		9,187			-			N/A
Total shareholders' equity		54,044			33,379			N/A

Cash Flow Data
Net cash provided by operating activities		12,534			10,584			5,540
Net cash (used in) investing activities		(2,811	)		(3,079	)		(1,058	)
Net cash provided (used in) by financing activities	$	14,604		$	-		$	(4,715	)

Name and Address of Beneficial Owner⁽¹⁾	Number of Shares Beneficially Owned		Approximate Percentage of Class
ChaSerg Technology Sponsor LLC⁽²⁾		5,500,000		10.0	%
Beijing Teamsun Technology Co. Ltd.⁽³⁾		19,490,295		35.3	%
Lloyd Carney		—		*
Eric Benhamou⁽⁴⁾		2,158,383		3.9	%
Marina Levinson		—		*
Leonard Livschitz⁽⁵⁾		1,985,459		3.6	%
Michael Southworth		—		*
Weihang Wang		—		*
Yueou Wang⁽⁶⁾		190,603		*
Shuo Zhang⁽⁷⁾		203,188		*
Victoria Livschitz⁽⁸⁾		1,212,069		2.2	%
Yury Gryzlov⁽⁹⁾		317,671		*
All directors and executive officers as a group (14 individuals)		6,829,779		12.4	%

	Units				Common Stock				Warrants
Year Ended December 31, 2018	Low		High		Low		High		Low		High
October 2018 through December 31, 2018	$	9.95	$	10.04	$	9.50	$	10.00	$	0.73	$	1.00

	Units				Common Stock				Warrants
Year Ended December 31, 2019	Low		High		Low		High		Low		High
January 1, 2019 through March 31, 2019	$	9.94	$	10.22	$	9.65	$	9.88	$	0.52	$	0.84
April 1, 2019 through June 30, 2019	$	10.16	$	10.45	$	9.87	$	10.04	$	0.57	$	0.75
July 1, 2019 through September 30, 2019	$	10.52	$	10.65	$	10.00	$	10.12	$	0.75	$	0.89
October 1, 2019 through December 31, 2019	$	10.63	$	12.05	$	10.03	$	11.10	$	0.90	$	2.25

Exhibit No.		Document
2.1(a)		Agreement and Plan of Merger, dated as of November 13, 2019, by and among ChaSerg Technology Acquisition Corp., Grid Dynamics International, Inc., CS Merger Sub 1 Inc., CS Merger Sub 2 LLC, and Automated Systems Holdings Limited, solely in its capacity as representative of the Securityholders (incorporated by reference from ChaSerg’s Form 8-K dated November 13, 2019)
3.1		Amended and Restated Certificate of Incorporation of Grid Dynamics Holdings, Inc.
3.2		Amended and Restated Bylaws of Grid Dynamics Holdings, Inc.
4.1		Specimen Common Stock Certificate of Grid Dynamics Holdings, Inc.
4.2		Specimen Warrant Certificate of Grid Dynamics Holdings, Inc.
4.3		Warrant Agreement, dated October 4, 2018, between ChaSerg Technology Acquisition Corp. and Continental Stock Transfer & Trust Company, as warrant agent (incorporated by reference from ChaSerg’s Form 8-K dated October 4, 2018)
10.1†		ChaSerg Technology Acquisition Corp.’s 2020 Equity Incentive Plan (incorporated by reference from Annex C to ChaSerg’s Definitive Proxy Statement filed with the SEC on February 10, 2020)
10.2†		ChaSerg Technology Acquisition Corp.’s 2020 Equity Incentive Plan – Form of Stock Option Agreement
10.3†		ChaSerg Technology Acquisition Corp.’s 2020 Equity Incentive Plan – Form of Restricted Stock Unit Agreement
10.4†		ChaSerg Technology Acquisition Corp.’s 2020 Equity Incentive Plan – Form of Restricted Stock Agreement
10.5†		ChaSerg Technology Acquisition Corp.’s 2020 Equity Incentive Plan – Form of Performance Share Agreement
10.6†		Form of Director and Officer Indemnification Agreement
10.7†		Outside Director Compensation Policy
10.8†		Employment Agreement between Grid Dynamics International, Inc. and Leonard Livschitz
10.9†		Employment Agreement between Grid Dynamics International, Inc. and Anil Doradla
10.10†		Employment Agreement between Grid Dynamics International, Inc. and Victoria Livschitz
10.11†		Employment Agreement between Grid Dynamics International, Inc. and Max Martynov
10.12†		Employment Agreement between Grid Dynamics International, Inc. and Yury Gryzlov
10.13†		Employment Agreement between Grid Dynamics International, Inc. and Vadim Kozyrkov
10.14†		Employment Agreement between Grid Dynamics International, Inc. and Stan Klimoff
10.15†		Form of Tax Indemnification Agreement of Grid Dynamics International, Inc.
99.1		Audited consolidated financial statements of Grid Dynamics as of December 31, 2019 and 2018 and for the years ended December 31, 2019, 2018 and 2017
99.2		Unaudited pro forma condensed combined financial information of the Company as of and for the year ended December 31, 2019
99.3		Management’s Discussion and Analysis of Financial Condition and Results of Operations for Grid Dynamics for the years ended December 31, 2019, 2018 and 2017

	GRID DYNAMICS HOLDINGS, INC.

	By:	/s/ Leonard Livschitz
	Name:	Leonard Livschitz
	Title:	Chief Executive Officer

	CHASERG TECHNOLOGY ACQUISITION CORP.

	By:	/s/ Lloyd Carney
	Name:	Lloyd Carney
	Title:	Chief Executive Officer

		Page
ARTICLE I OFFICES		1

Section 1.1	Registered Office	1
Section 1.2	Other Offices	1
Section 1.3	Books and Records	1

ARTICLE II MEETINGS OF STOCKHOLDERS		1

Section 2.1	Place of Meetings	1
Section 2.2	Annual Meetings	1
Section 2.3	Special Meetings	2
Section 2.4	Nature of Business at Meetings of Stockholders	2
Section 2.5	Nomination of Directors	4
Section 2.6	Notice	6
Section 2.7	Adjournments	6
Section 2.8	Quorum	6
Section 2.9	Voting	7
Section 2.10	Proxies	7
Section 2.11	List of Stockholders Entitled to Vote	8
Section 2.12	Record Date	8
Section 2.13	Stock Ledger	8
Section 2.14	Conduct of Meetings	9
Section 2.15	Inspectors of Election	9

ARTICLE III DIRECTORS		9

Section 3.1	Number and Election of Directors	9
Section 3.2	Vacancies	10
Section 3.3	Duties and Powers	10
Section 3.4	Meetings	10
Section 3.5	Organization	10
Section 3.6	Resignations and Removals of Directors	11
Section 3.7	Quorum; Required Vote	11
Section 3.8	Actions of the Board by Written Consent	12
Section 3.9	Meetings by Means of Conference Telephone	12
Section 3.10	Committees	12
Section 3.11	Compensation	13
Section 3.12	Interested Directors	13

ARTICLE IV OFFICERS		13

Section 4.1	General	13
Section 4.2	Election	14
Section 4.3	Voting Securities Owned by the Corporation	14

Section 4.4	Chairperson of the Board of Directors	14
Section 4.5	President	14
Section 4.6	Vice Presidents	15
Section 4.7	Secretary	15
Section 4.8	Treasurer	15
Section 4.9	Assistant Secretaries	16
Section 4.10	Assistant Treasurers	16
Section 4.11	Other Officers	16

ARTICLE V STOCK		16

Section 5.1	Shares of Stock	16
Section 5.2	Signatures	16
Section 5.3	Lost Certificates	17
Section 5.4	Transfers	17
Section 5.5	Dividend Record Date	17
Section 5.6	Record Owners	17
Section 5.7	Transfer and Registry Agents	18

ARTICLE VI NOTICES		18

Section 6.1	Notices	18
Section 6.2	Waivers of Notice	18

ARTICLE VII GENERAL PROVISIONS		18

Section 7.1	Dividends	18
Section 7.2	Disbursements	19
Section 7.3	Fiscal Year	19
Section 7.4	Corporate Seal	19

ARTICLE VIII INDEMNIFICATION		19

Section 8.1	Right to Indemnification	19
Section 8.2	Right to Advancement of Expenses	20
Section 8.3	Right of Indemnitee to Bring Suit	20
Section 8.4	Non-Exclusivity of Rights	20
Section 8.5	Insurance	21
Section 8.6	Indemnification of Other Persons	21
Section 8.7	Amendments	21
Section 8.8	Certain Definitions	21
Section 8.9	Contract Rights	21
Section 8.10	Severability	21

ARTICLE IX AMENDMENTS		22

Section 9.1	Amendments	22
Section 9.2	Entire Board of Directors	22

ARTICLE X EXCLUSIVE FORUM		22

ARTICLE XI NOTICE BY ELECTRONIC TRANSMISSION		23

Section 11.1	Notice by Electronic Transmission	23
Section 11.2	Definition of Electronic Transmission	23

NUMBER	NUMBER
	C-
	SHARES
	SEE REVERSE FOR CERTAIN DEFINITIONS
	CUSIP 39813G 109

Chief Executive Officer	[Corporate Seal] Delaware	Chief Financial Officer

TEN	—	as tenants in common	UNIF GIFT MIN ACT	—	Custodian
COM					(Cust)	(Minor)
TEN ENT	—	as tenants by the entireties
JT TEN	—	as joint tenants with right of survivorship and not as tenants in common			under Uniform Gifts to Minors Act (State)

Grant Number:

Date of Grant:

Vesting Commencement Date:

Number of Shares Granted:

Type of Option:	☐ Incentive Stock Option

	☐ Nonstatutory Stock Option

Term/Expiration Date:

PARTICIPANT		GRID DYNAMICS HOLDINGS, INC.


Signature		Signature


Print Name		Print Name


		Title

Address:

Submitted by:		Accepted by:

PURCHASER		GRID DYNAMICS HOLDINGS, INC.


Signature		Signature


Print Name		Print Name

Address:
		Title





		Date Received

PARTICIPANT :		GRID DYNAMICS HOLDINGS, INC.


Signature		Signature


Print Name		Print Name


		Title

Address:

Grant Number

Date of Grant

Vesting Commencement Date

Total Number of Shares Granted

	Grid Dynamics Holdings, Inc.


	(Signature)


	(Print name)


	(Title)

	*[INSERT INDEMNITEE NAME]*


	(Signature)


	(Print name)


	(Street address)


	(City, State and ZIP)

Non-Executive Chairperson of the Board:	$	20,000

Lead Outside Director:	$	20,000

Chair of Audit Committee:	$	20,000

Member of Audit Committee:	$	15,000

Chair of Compensation Committee:	$	15,000

Member of Compensation Committee:	$	10,000

Chair of Nominating and Corporate Governance Committee:	$	15,000

Member of Nominating and Corporate Governance Committee:	$	10,000

Signature:	/s/ Yury Gryzlov
By:	Yury Gryzlov
Title:	Senior Vice President of Operations

AGREED AND ACCEPTED:

INDEMNITEE:

[NAME]


(Signature)

Address:

	As of December 31,
	2019		2018
Assets
Current Assets
Cash and cash equivalents	$	42,189	$	17,862
Accounts receivable, net of allowance of $20 as of December 31, 2019 and 2018		13,893		13,008
Unbilled receivables		5,036		4,314
Prepaid income taxes		308		429
Deferred transaction costs		1,878		—
Prepaid expenses and other current assets		2,711		1,610
Total current assets		66,015		37,223
Property and equipment, net		4,024		3,169
Goodwill		—		139
Intangible assets, net		18		146
Deferred income taxes		1,474		1,049
Total assets	$	71,531	$	41,726

Liabilities and shareholders’ equity
Current liabilities
Accounts payable	$	768	$	467
Accrued liabilities		1,188		1,513
Accrued compensation and benefits		5,337		3,913
Dividends payable		—		2,000
Accrued income taxes		869		157
Other current liabilities		138		297
Total liabilities		8,300		8,347

Commitments and contingencies (Note 13)
Convertible preferred stock, no par value, 622,027 and 0 shares authorized and outstanding as of December 31, 2019 and 2018, respectively (Note 6)		9,187		—

Shareholders’ equity
Common stock, no par value, 18,244,054 shares authorized and 12,847,462 outstanding as of December 31, 2019; 17,000,000 shares authorized and 12,000,000 outstanding as of December 31, 2018		8,117		—
Additional paid-in capital		10,535		8,794
Retained earnings		35,392		24,585
Total shareholders’ equity (Note 7)		54,044		33,379
Total liabilities and shareholders’ equity	$	71,531	$	41,726

	For the years ended December 31,
	2019			2018			2017
Revenue	$	118,326		$	91,865		$	70,684
Cost of revenue		70,090			52,559			40,637
Gross profit		48,236			39,306			30,047

Operating expenses
Engineering, research, and development		4,346			2,643			1,975
Sales and marketing		6,947			5,200			2,353
General and administrative		21,318			17,634			12,612
Total operating expenses		32,611			25,477			16,940

Income from operations		15,625			13,829			13,107

Other income/(expenses), net		(176	)		(746	)		1

Income before income taxes		15,449			13,083			13,108
Provision/(benefit) for income taxes		4,642			3,855			(76	)
Net income and comprehensive income	$	10,807		$	9,228		$	13,184

Earnings per share
Basic	$	0.83		$	0.77		$	0.82
Diluted	$	0.83		$	0.77		$	0.78
Weighted average shares outstanding
Basic		12,535			12,000			9,362
Diluted		12,946			12,000			9,788

	Temporary Equity						Permanent Equity
	Convertible Preferred Stock						Common Stock						Additional paid-in			Shareholder note			Retained			Total shareholders’
	Shares			Amount			Shares			Amount			capital			receivable			earnings			equity
Balance at January 1, 2017		9,969		$	3,317			1,801		$	1,362		$	1,374		$	(7	)	$	7,207		$	9,936
Issuance of preferred stock upon exercise of warrant		114			90			—			—			—			—			—			—
Issuance of common stock upon exercise of stock options		—			—			116			139			—			—			—			139
Dividends paid		—			—			—			—			—			—			(3,034	)		(3,034	)
Repayment of shareholder note		—			—			—			—			—			7			—			7
Stock-based compensation		—			—			—			—			756			—			—			756
Cancellation of common stock and preferred stock in connection with the ASL acquisition		(10,083	)		(3,407	)		(1,917	)		(1,501	)		4,908			—			—			3,407
Issuance of common stock in connection with the ASL acquisition		—			—			12,000			—			—			—			—			—
Net income		—			—			—			—			—			—			13,184			13,184
Balance at December 31, 2017		—			—			12,000			—			7,038			—			17,357			24,395
Dividends declared		—			—			—			—			—			—			(2,000	)		(2,000	)
Stock-based compensation		—			—			—			—			1,756			—			—			1,756
Net income		—			—			—			—			—			—			9,228			9,228
Balance at December 31, 2018		—			—			12,000			—			8,794			—			24,585			33,379
Stock-based compensation		—			—			—			—			2,441			—			—			2,441
Issuance of common and preferred stock, net of $96 issuance costs		622			9,187			622			5,717			—			—			—			5,717
Exercise of stock options		—			—			225			2,400			(700	)		—			—			1,700
Net income		—			—			—			—			—			—			10,807			10,807
Balance at December 31, 2019		622			9,187			12,847		$	8,117		$	10,535		$	—		$	35,392		$	54,044

Contract Type
Time-and-material	$	116,825
Fixed-fee		1,501
Total Revenues	$	118,326

	Estimated Useful Life	As of December 31,
	(In Years)	2019			2018
Computers and equipment	3	$	5,470		$	4,237
Machinery and automobiles	5		129			68
Furniture and fixtures	3		544			326
Software	2		407			15
Leasehold improvements	7		119			58
			6,669			4,704
Less: Accumulated depreciation and amortization			(3,784	)		(2,675	)
			2,885			2,029
Capitalized software development costs	2		2,478			1,486
Less: Accumulated amortization			(1,339	)		(346	)
			1,139			1,140
Property and equipment, net		$	4,024		$	3,169

	For the years ended December 31,
	2019			2018			2017
Current
Federal	$	3,799		$	2,841		$	(797	)
State		599			623			(97	)
International		669			936			424
Total current tax expense		5,067			4,400			(470	)
Deferred
Federal		(375	)		(484	)		422
State		(50	)		(61	)		(28	)
International		—			—			—
Total deferred tax expense		(425	)		(545	)		394
Total tax expense/(benefit)	$	4,642		$	3,855		$	(76	)

	Amount		Expiration years
Net operating losses, federal	$	404	2032 – 2035
Net operating losses, state	$	383	2032 – 2035

Balance at January 1, 2019	$	74
Increases related to prior year tax positions		124
Increases related to current year tax positions		159
Balance at December 31, 2019	$	357

Grant Date	Options Granted	Vesting Conditions
November 12, 2018	2,250,000	-	The options vest as follows: 25% on the date of grant and 25% annually on the respective anniversaries as defined in the award agreement
March 27, 2019	20,000	-	The options vest as follows: 25% annually on the respective anniversaries as defined in the award agreement
May 22, 2019	166,118	-	A portion of the options vest as follows: 50% of the option shares vested on the date of grant and 25% vest annually on the anniversaries as defined in the award agreement.
		-	The remaining options vest as follows: 25% annually on the respective anniversaries as defined in the award agreement
		-	A portion of the options vest as follows: 75% of the option shares are vested on the Initial Vesting Date (as defined below); and 25% on the anniversaries as defined in the award agreement.
May 22, 2019	416,221	-	A portion of the options vest as follows: 50% of the option shares are vested on the Initial Vesting Date (as defined below); and 25% on the anniversaries as defined in the award agreement.
		-	The remaining options vest as follows: 25% of the option shares are vested on the Initial Vesting Date (as defined below), 25%; and 25% on the anniversaries as defined in the award agreement.
August 30, 2019	120,000	-	The options vest as follows: 25% annually on the respective anniversaries as defined in the award agreement
November 6, 2019	10,000	-	The options vest as follows: 25% annually on the respective anniversaries as defined in the award agreement

	2019	2018
Dividend yield	0%	0%
Expected volatility	40%	40%
Risk-free interest rates	1.42% – 2.23%	2.90% – 3.07%
Expected term in years	5.20 – 6.25	5.48 – 5.79
Grant date fair value of common stock	$7.54 – 7.55	$7.54

				Options outstanding
	Options available for grant			Number of options outstanding		Weighted- average exercise price		Weighted- average remaining contractual term		Aggregate intrinsic value
Balances at December 31, 2017		—			—	$	—			$	—
Options authorized to grant		5,000			—		—				—
Options granted		(2,250	)		2,250		7.54		9.87		—
Options exercised		—			—		—				—
Options canceled/forfeited		—			—		—				—
Options expired		—			—		—				—
Balances at December 31, 2018		2,750			2,250	$	7.54		9.87	$	0
Vested at December 31, 2018		—			563	$	7.54		9.87	$	0
Exercisable at December 31, 2018		—			2,213	$	7.54		9.87	$	0

Years ending December 31,
2020	$	3,347
2021		919
2022		480
Total	$	4,746