☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
incorporation or organization)
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Class A Common Stock, par value $0.0001 per share | PSTH | New York Stock Exchange | ||
Redeemable warrants, each whole warrant exercisable for one share of Class A Common Stock at an exercise price of $23.00 | PSTH.WS | New York Stock Exchange |
Large accelerated filer | ☒ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||
Emerging growth company | ☐ |
☒
The registrant was not a public company at
$4,552,000,000.
Auditor Firm ID: 688 | Auditor Name: Marcum LLP | Auditor Location: Melville, New York, United States of America |
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PART III | ||||||
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the lack of a market for our securities;
We completed our initial public offering on July 24, 2020.
Nearly eight months since our launch, based on our experience and progress to date, we believe an investment in our Company will generate highly attractive long-term returns.
us.
Initial Business Combination or we have failed to complete our Initial Business Combination within 24 months (or 30 months from the closing of the initial public offering if we have executed a letter of intent, agreement in principle or definitive agreement for our Initial Business Combination within 24 months from the closing of the initial public offering, but have not completed our Initial Business Combination within such
Dilution from Sponsor and Director Warrants to Public Holders | |||||||||||||||||||||||||||||||
Share Price of our Class A Common Stock |
Post-Combination Business Equity Value at IBC (in millions)
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$10,000 | $15,000 | $20,000 | $25,000 | $30,000 | |||||||||||||||||||||||||||
% Public Holders Equity Ownership Stake at IBC | |||||||||||||||||||||||||||||||
40.0 | % | 26.7 | % | 20.0 | % | 16.0 | % | 13.3 | % | ||||||||||||||||||||||
$20.00 | — | — | — | — | — | ||||||||||||||||||||||||||
$24.00 | — | — | — | — | — | ||||||||||||||||||||||||||
$28.00 | 1.1 | % | 1.0 | % | 1.0 | % | 1.0 | % | 1.0 | % | |||||||||||||||||||||
$32.00 | 1.8 | % | 1.8 | % | 1.7 | % | 1.7 | % | 1.7 | % | |||||||||||||||||||||
$36.00 | 2.4 | % | 2.3 | % | 2.3 | % | 2.2 | % | 2.2 | % |
Dilution from Sponsor and Director Warrants to Public Holders | ||||||||||
Share Price of our Class A Common Stock | Post-Combination Business Equity Value at IBC (in millions) | |||||||||
$10,000 | $15,000 | $20,000 | $25,000 | $30,000 | ||||||
% Public Holders Equity Ownership Stake at IBC | ||||||||||
40.0% | 26.7% | 20.0% | 16.0% | 13.3% | ||||||
$20.00 | — | — | — | — | — | |||||
$24.00 | — | — | — | — | — | |||||
$28.00 | 1.1% | 1.0% | 1.0% | 1.0% | 1.0% | |||||
$32.00 | 1.8% | 1.8% | 1.7% | 1.7% | 1.7% | |||||
$36.00 | 2.4% | 2.3% | 2.3% | 2.2% | 2.2% |
Status as a Public Company
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following July 24, 2025, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A Common Stock that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” shall have the meaning associated with it in the JOBS Act.
Type of Transaction | Whether Stockholder Approval is Required | |
Purchase of assets | No | |
Purchase of stock of target not involving a merger with the company | No | |
Merger of target into a subsidiary of the company | No | |
Merger of the company with a target | Yes |
Any purchases by our Sponsor, officers, directors and/or their affiliates who are affiliated purchasers under Rule
challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative.
the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. Unlike in the case of claims against stockholders relating to an unlawful liquidating distribution, however, stockholders are only liable for an unlawful redemption distribution if they knew that the redemption distribution was unlawful. If we are unable to complete our business combination within the Combination Period, we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the Public Shares, at a
We intend
Facilities
Our offices are at 787 Eleventh Avenue, 9th Floor, New York, NY 10019 and our telephone number is (212) 813-3700. We consider our current office space adequate for our current operations. We do not expect to lease alternative office space from an unaffiliated third party.
be ultimately effectuated.
Legal Proceedings
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a guarantee either: (1) that we will be able to successfully identify a suitable candidate for our Initial Business Combination; or (2) of any results with respect to any Initial Business Combination we may consummate. You should not rely on the historical record of Pershing Square or our management team’s performance as indicative of the future performance of an investment in us or the returns we will generate or are likely to generate going forward. An investment in us is not an investment in Pershing Square.
You will not be provided with an opportunity to evaluate the specific merits or risks of our Initial Business Combination. Since
target in a timely fashion within the Combination Period.
record date, the Forward Purchasers acquired the total 150,000,000 Forward Purchase Units represented by the committed forward purchase and the additional forward purchase, our Sponsor and the Forward Purchasers would together effectively control the outcome of such vote. With respect to certain amendments to our amended and restated certificate of incorporation that require the approval of 65% of the outstanding shares of our common stock, assuming the Forward Purchasers and our Sponsor vote in favor of such an amendment, the approval of such amendment would require (i) the vote of 95,000,001, or 47.5%, of the Public Shares, if only the Committed Forward Purchase Units have been issued, and (ii) the vote of 60,000,001, or 30%, of the Public Shares, if the Committed Forward Purchase Units and Additional Forward Purchase Units have been issued. Each of the foregoing examples assumes that our Sponsor, officers and directors do not acquire any other Public Shares and that all outstanding shares are voted. The amount of the additional forward purchase may be increased by mutual agreement between the Forward Purchasers and us, which could further diminish the influence and/or control of our Public Stockholders. In addition, the Director Forward Purchasers may acquire up to 300,000 Forward Purchase Shares prior to the record date for a stockholder vote on our Initial Business Combination, in which case they would be required to vote such shares in favor of a transaction, which Forward Purchase Shares would have approximately 0.1% of the voting power of the outstanding common stock in the above scenarios.
concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights without our prior consent with respect to more than an aggregate of 15% of the Public Shares, which we refer to as the “Excess Shares,” unless our board of directors determines, in its sole discretion, to waive or amend such limit with respect to such stockholder or “group.” However, we would not be restricting our Public Stockholders’ ability to vote all of their shares (including Excess Shares) for or against our Initial Business Combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our Initial Business Combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete our Initial Business Combination. And as a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your stock in open market transactions, potentially at a loss.
Of the net proceeds of the initial public offering and the private placement of the Sponsor Warrants and Director Warrants, approximately $32 million was available to us immediately after our initial public offering and, as of December 31, 2021 and December 31, 2020, approximately $21 and $24 million was(net of accrued expenses) were available to us, in each case outside the trust account to fund our working capital requirements. We do not expect to seek additional capital due to the amount available to us outside the trust account, but if we are required to do so, we would need to borrow funds from our Sponsor, management team or third parties to operate or may be forced to liquidate. None of our Sponsor, members of our management team nor any of their affiliates is under any obligation to advance funds to us in such circumstances. Any such advances would be repaid only from funds held outside the trust account or from funds released to us upon completion of our Initial Business Combination. We do not expect to seek loans from parties other than our Sponsor or an affiliate of our Sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account. The Forward Purchasers and Director Forward Purchasers may elect to purchase any or all of the number of Forward Purchase Units they have agreed to purchase at any time prior the Initial Business Combination, which could provide a source of working capital. However, the Forward Purchasers and Director Forward Purchasers have no obligation to make such purchases until the time of our Initial Business Combination. If we are unable to obtain these loans, we may be unable to complete our Initial Business Combination. If we are unable to complete our Initial Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. Consequently, our Public Stockholders may only receive approximately $20.00 per share on our redemption of their Public Shares, and our Distributable Redeemable Warrants will expire worthless, and no Distributable Tontine Redeemable Warrants will have been distributed. In certain circumstances, our Public Stockholders may receive less than $20.00 per share on the redemption of their shares. See “ —If third parties bring claims against us, the proceeds held in the trust account could be reduced and the
Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our Public Shares, if we are unable to complete our Initial Business Combination within the Combination Period, or upon the exercise of a redemption right in connection with our Initial Business Combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within 10 years following the redemption. Accordingly, the
in or to any monies in the trust account and to not seek recourse against the trust account for any reason whatsoever. Accordingly, any indemnification provided by us will be able to be satisfied by us only if (i) we have sufficient funds outside of the trust account, or (ii) we consummate our Initial Business Combination. Our obligations to indemnify our directors and officers may discourage stockholders from bringing a lawsuit against our directors and officers for breach of their fiduciary duties. These provisions may also have the effect of reducing the likelihood of derivative litigation against our directors and officers even though, such an action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent that we may incur the costs of settlement and damage awards against our directors and officers pursuant to these indemnification provisions.
long term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to avoid being deemed an “investment company” within the meaning of the Investment Company Act. The initial public offering was not intended for persons who are seeking a return on investments in government securities or investment securities. The trust account is intended as a holding place for funds pending the earliest to occur of: (i) the completion of our Initial Business Combination; (ii) the redemption of any of our Public Shares that are properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemptions in connection with our Initial Business Combination, (B) to modify the substance or timing of our obligation to redeem 100% of our Public Shares if we do not complete our Initial Business Combination within the Combination Period, or (C) with respect to any other provision relating to stockholders’ rights or
BecauseIf we willdo not be complying withfollow the procedures contemplated by Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the 10 years following our dissolution. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the onlymost likely claims to arisewhich we would be subject are claims from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. We are also subject to pending and potential litigation claims including a claim that we were required to register as an investment company under the Investment Company Act. If our plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’sthe imposition of legal proceedingslitigation that is pending or that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. Unlike in the case of claims against stockholders relating to an unlawful liquidating distribution, however, stockholders are only liable for an unlawful redemption distribution if they knew that the redemption was unlawful.
contained or incorporated by reference therein are not current or correct or the SEC issues a stop order. If the shares issuable upon exercise of the warrants are not registered under the Securities Act, we will be required to permit holders to exercise their Redeemable Warrants on a cashless basis. However, no Redeemable Warrant will be exercisable on a cash or cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their Redeemable Warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available.
business will bear the cost of registering these securities. In addition, the Redeemable Warrants have certain registration rights, as described herein. The registration and availability of such a significant number of securities for trading in the public market (to the extent any such securities are not subject to transfer restrictions) may have an adverse effect on the market price of our Class A Common Stock. In addition, the existence of the registration rights may make our Initial Business Combination more costly or difficult to conclude. This is because the stockholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our Class A Common Stock that is expected when such securities are registered.
be totally dependent upondepend on the efforts of our key personnel, some of whom may join us following our Initial Business Combination. The loss of key personnel could negatively impact the operations and profitability of our post-combination business.
Our Sponsor, directors and officers have agreed, pursuant to the Letter Agreement, that they will not propose any amendment to our amended and restated certificate of incorporation (i) to modify the substance or timing of our obligation to allow redemptions in connection with our Initial Business Combination, (ii) to modify the substance or timing of our obligation to redeem 100% of the Public Shares if we do not complete our Initial Business Combination within the Combination Period, or (iii) with respect to any other provision relating to stockholders’ rights or
We are an “emerging growth company” within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, our stockholders may not have access to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our Class A Common Stock held by non-affiliates exceeds $700 million as of any June 30 before that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company, nor an emerging growth company which has opted out of using the extended transition period, difficult or impossible because of the potential differences in accounting standards used.
proprietary information and sensitive or confidential data. As an early stage company without significant investments in data security protection, we may not be sufficiently protected against such occurrences. We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business and lead to financial loss.
The following table summarizes the relevant data for our business as of December 31, 2020 and should be read with our financial statements, which are included in this Report:
For the period from May 4, 2020 (inception) through December 31, 2020 | ||||
Income Statement Data: | ||||
Loss from operations | $ | (2,831,597 | ) | |
Income earned in trust account | 1,690,454 | |||
Net loss | (1,430,298 | ) | ||
December 31, 2020 | ||||
Balance Sheet Data: | ||||
Cash and cash equivalents | $ | 25,348,287 | ||
Cash and marketable securities held in trust account | 4,001,690,454 | |||
Total assets | 4,029,640,433 | |||
Total liabilities | 57,831,418 | |||
Class A common stock subject to possible redemption | 3,966,809,006 | |||
Total stockholders’ equity | 5,000,009 |
may
may
could
may
may
December 31, 2021. In addition, we report adjusted net loss, which is a
For the Year Ended December 31, 2021 | For the Period from May 4, 2020 (inception) through December 31, 2020 | |||||||
Net income/(loss) | $ | 833,301,124 | $ | (954,881,205 | ) | |||
Less: | ||||||||
Change in fair value of Forward Purchase Agreement liabilities | 598,782,500 | (593,893,320 | ) | |||||
Change in fair value of Outstanding Warrant liabilities | 237,364,758 | (358,644,962 | ) | |||||
Offering costs allocable to Outstanding Warrant liabilities | - | (912,625 | ) | |||||
Adjusted net loss | $ (2,846,134 | ) | $ (1,430,298 | ) |
As of December 31, 2021 and December 31, 2020, $378,880 was left under the promissory note to be drawn down, and there were no borrowings outstanding, respectively.
account to pay our income taxes, of which all were withdrawn during the year ended December 31, 2021.
2021.
rights that are considered to be outside of its control and subject to the occurrence of uncertain future events. Accordingly, at December 31, 2021 and December 31, 2020, 198,270,991200,000,000 shares of Class A Common Stock subject to possible redemption arewere presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheet.
sheets. The Company adjusts the carrying value of redeemable common stock to equal the redemption value of the cash held in the Trust Account net of income taxes payable at the end of each reporting period.
period.
This Annual Report
as stated in their report which appears herein.
Name | Age | Title | ||
William Ackman | Chairman and Chief Executive Officer; Director | |||
Ben Hakim |
| President | ||
Michael Gonnella | Chief Financial Officer | |||
Steve | Corporate Secretary | |||
Lisa Gersh | Director | |||
Michael Ovitz | Director | |||
Jacqueline D. Reses | Director | |||
Joseph S. Steinberg | Director |
2830 years in the investment management industry. Prior to forming Pershing Square, heStefo Milankov
serves as a member of our board of directors. Ms.and the Samsung Retail Advisory Board. Ms. Gersh previously served on the board of directors of comScore, Inc.
Warrants and Director Warrants held in the trust account will be used to fund the redemption of the Public Shares, and the investment opportunity presented by the Sponsor Warrants, the Director Warrants and the Forward Purchase Securities (with respect to the Forward Purchasers and Director Forward Purchasers) will be lost. With certain limited exceptions in each case, our Class B Common Stock and the Forward Purchase Units will not be transferable, assignable or salable and the shares of Class A Common Stock issuable upon conversion or exercise thereof, as applicable, will not be transferable, assignable or salable until 180 days after the consummation of our Initial Business Combination, and the Sponsor Warrants and Director Warrants will not be exercisable, transferable, assignable or salable until three years after the consummation of our Initial Business Combination. Since our Sponsor, directors and officers may directly or indirectly own common stock and warrants, our Sponsor, directors and officers may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our Initial Business Combination. |
Name of Beneficial Owner | Number of Shares Beneficially Owned | Percentage of Outstanding Common Stock | ||||||||||
Directors and Executive Officers: (1) | ||||||||||||
Pershing Square TH Sponsor, LLC (Our Sponsor)(2) | 100 | * | ||||||||||
Pershing Square Funds(3)(4) | 200,000,100 | 50.0 | % | |||||||||
William A. Ackman(5) | 200,000,100 | 50.0 | % | |||||||||
Ben Hakim | — | — | ||||||||||
Michael Gonnella | 4,500 | * | ||||||||||
Steve Stefo Milankov | — | — | ||||||||||
Lisa Gersh | — | — | ||||||||||
Michael Ovitz(6) | 250,000 | * | ||||||||||
Jacqueline Reses(7) | 50,000 | * | ||||||||||
Joseph S. Steinberg(8) | 9,375 | * | ||||||||||
All directors and executive officers as a group (8 individuals) | 200,313,975 | 50.0 | % | |||||||||
Other 5% Stockholders: | ||||||||||||
Guggenheim Capital, LLC (9) | 22,000,000 | 11.0 | % | |||||||||
The Baupost Group, L.L.C. (10) | 12,707,924 | 6.4 | % | |||||||||
Ontario Teacher’s Pension Plan Board (11) | 11,325,000 | 5.7 | % |
Name of Beneficial Owner | Number of Shares Beneficially Owned | Percentage of Outstanding Common Stock | ||||||
Directors and Executive Officers: (1) | ||||||||
Pershing Square TH Sponsor, LLC (Our Sponsor) (2) | 100 | * | ||||||
Pershing Square Funds (3)(4) | 200,000,100 | 50.0 | % | |||||
William A. Ackman (5) | 200,000,100 | 50.0 | % | |||||
Ben Hakim | — | — | ||||||
Michael Gonnella | 4,500 | * | ||||||
Steve Milankov | — | — | ||||||
Lisa Gersh | — | — | ||||||
Michael Ovitz (6) | 250,000 | * | ||||||
Jacqueline Reses (7) | 50,000 | * | ||||||
Joseph S. Steinberg (8) | 9,375 | * | ||||||
All directors and executive officers as a group (8 individuals) | 200,313,975 | 50.0 | % | |||||
Other 5% Stockholders: | ||||||||
Guggenheim Capital, LLC (9) | 22,000,000 | 11.0 | % | |||||
Allspring Global Investments Holdings LLC (10) | 11,181,934 | 5.6 | % |
* | Less than one percent |
(1) | Unless otherwise noted, the business address of each of the persons herein is 787 Eleventh Avenue, 9t h Floor, New York, New York 10019. |
(2) | Interests shown consist solely of Class B Common Stock. Such shares will automatically convert into Class A Common Stock on a one-for-one |
(3) | Includes (a) 50,000,000 Committed Forward Purchase Units, (b) 100,000,000 Additional Forward Purchase Units, and (c) 100 shares of Class B Common Stock, which have aggregate voting power equal to 50,000,000 shares of Class A Common Stock, and automatically convert into Class A Common Stock on a one-for-one one-third of one warrant to purchase a share of Class A Common Stock, and the Forward Purchase Units in aggregate are comprised of 150,000,000 shares of Class A Common Stock, and warrants to purchase 50,000,000 shares of Class A Common Stock. The Pershing Square Funds are obligated to purchase the Committed Forward Purchase Units, and may elect to purchase up to the total number of Additional Forward Purchase Units, in one or more private placements to occur no later than simultaneously with our Initial Business Combination. The warrants included in Forward Purchase Units have an exercise price of $23.00 per share and are exercisable upon the later of (i) July 24, 2021 and (ii) 30 days following the consummation of our Initial Business Combination. As of the date of this filing, the Pershing Square Funds have not purchased any Forward Purchase Units. |
(4) | The Pershing Square Funds may be deemed to be the beneficial owners of such securities in their capacity as the Forward Purchasers, and as the members of our Sponsor, and have shared voting and investment power with respect to such securities. |
(5) | Mr. Ackman may be deemed to be the beneficial owner of such securities by virtue of his position as Chief Executive Officer of PSCM, the manager of our Sponsor, as well as the investment advisor to each of Pershing Square Holdings, Ltd., Pershing Square, L.P. and Pershing Square International, Ltd., and as managing member of PS Management GP, LLC, a Delaware limited liability company, as to which voting and investment power is shared. Mr. Ackman disclaims beneficial ownership of such securities except to the extent of his pecuniary interest therein. |
(6) | Pursuant to the director forward purchase agreement, Mr. Ovitz has agreed to purchase 250,000 Forward Purchase Units (each of which includes one share of Class A Common Stock). Mr. Ovitz is obligated to purchase such Forward Purchase Units no later than simultaneously with the closing of our Initial Business Combination, and may do so at any time prior thereto at his election. |
(7) | Pursuant to the director forward purchase agreement, Ms. Reses has agreed to purchase 50,000 Forward Purchase Units (each of which includes one share of Class A Common Stock). Ms. Reses is obligated to purchase such Forward Purchase Units no later than simultaneously with the closing of our Initial Business Combination, and may do so at any time prior thereto at her election. |
(8) | Reflects 9,375 shares of Class A Common Stock that Mr. Steinberg purchased through a charity trust—Joseph S. and Diane H. Steinberg Charitable Trust. |
(9) | Based upon the Schedule 13G filed by Guggenheim Partners, LLC with the SEC on August 10, |
(10) | Based upon the Schedule 13G filed by |
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The Sponsor Warrants willare generally not be salable, transferable or exercisable until three years after the date of our Initial Business Combination. The Sponsor Warrants will be exercisable, in whole or in part, for that number of shares constituting 5.95% of the common stock of the post-combination business on a fully diluted basis as of the time immediately following the Initial Business Combination, at an exercise price equal to $24.00 per common share of the post-combination business. The term “fully diluted basis” means the number of shares deemed to be outstanding at such time and will include the gross number of shares issuable upon the exercise of the Redeemable Warrants, the Forward Purchase Warrants, the Sponsor Warrants, the Director Warrants and any other warrants or options of the company, as well as the gross number of shares underlying any other instrument, whether debt or otherwise, that is convertible or exercisable into or exchangeable for, or that tracks the performance of, shares of common stock (including any equity or equity-based award), in each case without regard to whether such warrant, option or instrument is then exercisable or convertible or
Audit Fees. Audit fees consist oftable summarizes the aggregate fees billed for professional services renderedprovided to us by Marcum LLP (“Marcum”) for the audit of our year-end financial statementsyear ended December 31, 2021 and services that are normally provided by Marcum in connection with regulatory filings. The aggregate fees billed by Marcum for professional services rendered for the audit of our annual financial statements, review of the financial information included in our Forms 10-Q for the respective periods and other required filings with the SEC for the period from May 4, 2020 (inception) through December 31, 2020 totaled $89,301. The above amounts include interim procedures and audit services in connection with our initial public offering, as well as attendance at audit committee meetings.
Audit-Related Fees. Audit-related services consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our financial statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute or regulation and consultations concerning financial accounting and reporting standards. We did not pay Marcum for consultations concerning financial accounting and reporting standards for the period from May 4, 2020 (inception) through December 31, 2020.
Tax Fees. We did not pay Marcum for tax return services, planning and tax advice for the period from May 4, 2020 (inception) through December 31, 2020.
All Other Fees. We did not pay Marcum for any other services for the period from May 4, 2020 (inception) through December 31, 2020.
2020:
Fee Category | For the Year ended December 31, 2021 | For the Period from May 4, 2020 (inception) through December 31, 2020 | ||
Audit Fees (1) | $ 101,455 | $ 89,301 | ||
Audit- Related Fees (2) | - | - | ||
Tax Fees (3) | 9,579 | - | ||
All Other Fees | - | - | ||
Total Fees | $ 111,034 | $ 89,301 |
(1) | Audit Fees 10-Q and other services that an independent registered public accounting firm would customarily provide in connection with regulatory and other required filings submitted to the SEC. |
(2) | Audit-Related Fees |
(3) | Tax Fee |
Financial Statements |
(b) | Financial Statement Schedules. All schedules are omitted for the reason that the information is included in the financial statements or the notes thereto or that they are not required or are not applicable. |
(c) | Exhibits: The exhibits listed in the accompanying index to exhibits are filed or incorporated by reference as part of this Report. |
Exhibit No. | Description of Exhibits | |
1.1 | ||
| ||
3.1 | Second Amended and Restated Certificate of Incorporation. | |
3.2 | ||
4.1 | ||
4.2 | ||
4.3 |
4.4 | ||
4.5 | ||
4.6 | ||
|
Inline XBRL Instance Document. | |||
Inline XBRL Taxonomy Extension Schema Document. | |||
Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |||
Inline XBRL Taxonomy Extension Definition Linkbase Document. | |||
Inline XBRL Taxonomy Extension Label Linkbase Document. | |||
Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||
104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
* | Filed herewith. |
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PERSHING SQUARE TONTINE HOLDINGS, LTD. | ||
By: | /s/ William A. Ackman | |
Name: William A. Ackman | ||
Title: Chief Executive Officer, Chairman of the Board of Directors |
Name | Position | Date | ||
/s/ William A. Ackman William A. Ackman | Chief Executive Officer, Chairman of the Board of Directors (Principal Executive Officer) | March | ||
/s/ Michael Gonnella Michael Gonnella | Chief Financial Officer (Principal Financial and Accounting Officer) | March | ||
/s/ Lisa Gersh Lisa Gersh | Director | March | ||
/s/ Michael Ovitz Michael Ovitz | Director | March | ||
/s/ Jacqueline Reses Jacqueline Reses | Director | March | ||
/s/ Joseph Steinberg Joseph Steinberg | Director | March |
Page | ||||
F-2 | ||||
Financial Statements: | ||||
| F-4 | |||
F-5 | ||||
F-6 | ||||
F-7 | ||||
F-8 |
Our audit
Houston, TX
DECEMBER 31, 2020
Assets | ||||
Current Assets: | ||||
Cash and cash equivalents | $ | 25,348,287 | ||
Prepaid expenses | 2,601,472 | |||
Dividends receivable from operating account | 220 | |||
|
| |||
Total Current Assets | 27,949,979 | |||
Cash and marketable securities held in Trust Account | 4,001,690,454 | |||
|
| |||
Total Assets | $ | 4,029,640,433 | ||
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| |||
Liabilities and Stockholders’ Equity | ||||
Current Liabilities: | ||||
Accrued expenses | $ | 1,207,263 | ||
Accrued offering costs | 85,000 | |||
Income taxes payable | 289,155 | |||
|
| |||
Total Current Liabilities | 1,581,418 | |||
Deferred underwriting fees payable | 56,250,000 | |||
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| |||
Total Liabilities | 57,831,418 | |||
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| |||
Commitments | ||||
Class A Common Stock, $0.0001 par value, subject to possible redemption, 198,270,991 shares at redemption value of approximately $20.00 each | 3,966,809,006 | |||
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| |||
Stockholders’ Equity | ||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding | — | |||
Class A Common Stock, $0.0001 par value; 3,000,000,000 shares authorized; 1,729,009 shares issued and outstanding (excluding 198,270,991 shares subject to possible redemption) | 173 | |||
Class B Common Stock, $0.0001 par value; 20,000,000 shares authorized; 100 shares issued and outstanding | — | |||
Additional paid-in capital | 6,430,134 | |||
Accumulated deficit | (1,430,298 | ) | ||
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| |||
Total Stockholders’ Equity | 5,000,009 | |||
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| |||
Total Liabilities and Stockholders’ Equity | $ | 4,029,640,433 | ||
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SHEETS
December 31, | ||||||||
2021 | 2020 | |||||||
Assets | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 23,156,677 | $ | 25,348,287 | ||||
Prepaid expenses | 939,289 | 2,601,472 | ||||||
Dividends receivable from operating account | 203 | 220 | ||||||
Total Current Assets | | 24,096,169 | | | 27,949,979 | | ||
Forward Purchase Agreement assets | 4,889,180 | 0 | ||||||
Cash and marketable securities held in Trust Account | 4,002,943,971 | 4,001,690,454 | ||||||
Total Assets | $ | 4,031,929,320 | $ | 4,029,640,433 | ||||
Liabilities and Stockholders’ Deficit | ||||||||
Current Liabilities: | ||||||||
Accrued expenses | $ | 1,823,470 | $ | 1,207,263 | ||||
Accrued offering costs | 0 | 85,000 | ||||||
Income taxes payable | – | 289,155 | ||||||
Due to related party | 3,789 | – | ||||||
Total Current Liabilities | 1,827,259 | 1,581,418 | ||||||
Forward Purchase Agreement liabilities | – | 593,893,320 | ||||||
Outstanding Warrant liabilities | 225,339,926 | 462,704,684 | ||||||
Deferred underwriting fees payable | 56,250,000 | 56,250,000 | ||||||
Total Liabilities | 283,417,185 | 1,114,429,422 | ||||||
Commitments and Contingencies | 0 | 0 | ||||||
Class A Common Stock, $0.0001 par value, 200,000,000 shares subject to possible redemption at redemption value | 4,002,943,971 | 4,001,401,299 | ||||||
Stockholders’ Deficit | ||||||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; NaN issued and outstanding | 0– | – | ||||||
Class A Common Stock, $0.0001 par value; 3,000,000,000 shares authorized | 0 | – | ||||||
Class B Common Stock, $0.0001 par value; 20,000,000 shares authorized; 100 shares issued and outstanding | 0– | – | ||||||
Additional paid-in capital | 25,000 | 25,000 | ||||||
Accumulated deficit | (254,456,836 | ) | (1,086,215,288 | ) | ||||
Total Stockholders’ Deficit | (254,431,836 | ) | (1,086,190,288 | ) | ||||
Total Liabilities , Class A Common Stock Subject to Possible Redemption and Stockholders’ Deficit | $ | 4,031,929,320 | $ | 4,029,640,433 | ||||
FOR THE PERIOD FROM MAY 4, 2020 (INCEPTION) THROUGH DECEMBER 31, 2020
Interest and dividends earned in operating account | $ | 1,428 | ||
Legal fees | (1,658,107 | ) | ||
Insurance expense | (743,291 | ) | ||
Research expense | (192,582 | ) | ||
Franchise tax expense | (132,290 | ) | ||
Other expenses | (106,755 | ) | ||
|
| |||
Loss from operations | (2,831,597 | ) | ||
Dividends earned on marketable securities | 16,394 | |||
Realized gains on marketable securities | 1,491,597 | |||
Unrealized gains on marketable securities | 182,463 | |||
|
| |||
Income earned in Trust Account | 1,690,454 | |||
|
| |||
Loss before provision for income taxes | (1,141,143 | ) | ||
Income tax provision | (289,155 | ) | ||
|
| |||
Net loss | $ | (1,430,298 | ) | |
|
| |||
Weighted average shares outstanding, basic and diluted (1) | 1,079,393 | |||
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| |||
Basic and diluted net loss per common share (2) | $ | (2.61 | ) | |
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Year Ended | Period From May 4, 2020 (Inception) Through | |||||||
December 31, 2021 | December 31, 2020 | |||||||
Interest and dividend income | $ | 2,146 | $ | 1,428 | ||||
Legal fees | (3,242,404 | ) | (348,159 | ) | ||||
Insurance | (1,653,238 | ) | (743,291 | ) | ||||
Printing | (57,823 | ) | (5,562 | ) | ||||
Accounting | (380,814 | ) | (20,291 | ) | ||||
Franchise tax | (200,000 | ) | (132,290 | ) | ||||
Research | (24,545 | ) | (192,582 | ) | ||||
Other | (175,950 | ) | (47,033 | ) | ||||
Loss from operations | (5,732,628 | ) | (1,487,780 | ) | ||||
IBC related fee s | (23,805,076 | ) | (1,343,817 | ) | ||||
Reimbursement of cancelled IBC | 25,148,893 | 0 | ||||||
IBC related fees | 1,343,817 | (1,343,817 | ) | |||||
Dividends earned on marketable securities held in Trust Account | 99,839 | 16,394 | ||||||
Realized gains on marketable securities held in Trust Account | 1,561,412 | 1,491,597 | ||||||
Change in unrealized gains on marketable securities held in Trust Account | 188,775 | 182,463 | ||||||
Income earned in Trust Account | 1,850,026 | 1,690,454 | ||||||
Offering costs allocable to Outstanding Warrant liabilities | 0 | (912,625 | ) | |||||
Change in fair value of Forward Purchase Agreement liabilities/assets | 598,782,500 | (593,893,320 | ) | |||||
Change in fair value of Outstanding Warrant liabilities | 237,364,758 | (358,644,962 | ) | |||||
Other income/(loss) | 836,147,258 | (953,450,907 | ) | |||||
Income/(loss) before income tax provision | 833,608,473 | (954,592,050 | ) | |||||
Income tax provision | (307,349 | ) | (289,155 | ) | ||||
Net income/(loss) | $ | 833,301,124 | $ | (954,881,205 | ) | |||
Basic weighted-average shares outstanding, Class A Common Stock subject to possible redemption | 200,000,000 | 200,000,000 | ||||||
Basic net income per share, Class A Common Stock subject to possible redemption | $ | 0.01 | $ | 0.01 | ||||
Diluted weighted-average shares outstanding, Class A Common Stock subject to possible redemption | 219,454,901 | 224,130,690 | ||||||
Diluted net income per share, Class A Common Stock subject to possible redemption | $ | 0.01 | $ | 0.01 | ||||
Basic and diluted weighted-average shares outstanding, Non-redeemable Class B Common Stock | 100 | 100 | ||||||
Basic net income/(loss) per share, Non-redeemable Class B Common Stock | $ | 8,317,584.47 | $ | (9,562,825.04 | ) | |||
Diluted net income/(loss) per share, Non-redeemable Class B Common Stock | $ | 2,329,759.47 | $ | (9,562,825.04 | ) | |||
FOR THE PERIOD FROM MAY 4, 2020 (INCEPTION) THROUGH DECEMBER 31, 2020
Common Stock | Additional | Total | ||||||||||||||||||||||||||
Class A | Class B | Paid-In | Accumulated | Stockholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||
Balance – May 4, 2020 (inception) | — | $ | — | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Issuance of Class B Common Stock to Sponsor | — | — | 100 | — | 25,000 | — | 25,000 | |||||||||||||||||||||
Sale of units in initial public offering, gross | 200,000,000 | 20,000 | — | — | 3,999,980,000 | — | 4,000,000,000 | |||||||||||||||||||||
Underwriting fees and offering costs | — | — | — | — | (94,623,187 | ) | — | (94,623,187 | ) | |||||||||||||||||||
Sale of Sponsor and Directors Warrants | — | — | — | — | 67,837,500 | — | 67,837,500 | |||||||||||||||||||||
Common stock subject to possible redemption | (198,270,991 | ) | (19,827 | ) | — | — | (3,966,789,179 | ) | — | (3,966,809,006 | ) | |||||||||||||||||
Net loss | — | — | — | — | — | (1,430,298 | ) | (1,430,298 | ) | |||||||||||||||||||
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| |||||||||||||||
Balance – December 31, 2020 | 1,729,009 | $ | 173 | 100 | $ | — | $ | 6,430,134 | $ | (1,430,298 | ) | $ | 5,000,009 | |||||||||||||||
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DEFICIT
Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total Stockholders’ Deficit | |||||||||||||||||||||||||
Class A | Class B | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance – May 4, 2020 (inception) | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||||||||||
Issuance of Class B Common Stock to Sponsor | 0 | 0 | 100 | 0 | 25,000 | 0 | 25,000 | |||||||||||||||||||||
Measurement adjustment on redeemable common stock | (131,334,083 | ) | (131,334,083 | ) | ||||||||||||||||||||||||
Net loss | 0 | 0 | 0 | 0 | 0 | (954,881,205 | ) | (954,881,205 | ) | |||||||||||||||||||
Balance – December 31, 2020 | 0 | $ | 0 | 100 | $ | 0 | $ | 25,000 | $ | (1,086,215,288 | ) | $ | (1,086,190,288 | ) | ||||||||||||||
Measurement adjustment on redeemable common stock | – | 0 | – | 0 | 0 | (1,542,672 | ) | (1,542,672 | ) | |||||||||||||||||||
Net income | 0 | 0 | 0 | 0 | 0 | 833,301,124 | 833,301,124 | |||||||||||||||||||||
Balance – December 31, 2021 | 0 | $ | 0 | 100 | $ | 0 | $ | 25,000 | $ | (254,456,836 | ) | $ | (254,431,836 | ) | ||||||||||||||
FOR THE PERIOD FROM MAY 4, 2020 (INCEPTION) THROUGH DECEMBER 31, 2020
Cash flows from operating activities: | ||||
Net loss | $ | (1,430,298 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Dividends earned on marketable securities held in Trust Account | (16,394 | ) | ||
Realized gains on marketable securities held in Trust Account | (1,491,597 | ) | ||
Unrealized gains on marketable securities held in Trust Account | (182,463 | ) | ||
Changes in operating assets and liabilities: | ||||
Dividends receivable from operating account | (220 | ) | ||
Prepaid expenses | (2,601,472 | ) | ||
Accrued expenses | 1,207,263 | |||
Income taxes payable | 289,155 | |||
|
| |||
Net cash used in operating activities | (4,226,026 | ) | ||
|
| |||
Cash flows from investing activities: | ||||
Investment of cash in Trust Account | (4,000,000,000 | ) | ||
|
| |||
Net cash used in investing activities | (4,000,000,000 | ) | ||
|
| |||
Cash flows from financing activities: | ||||
Proceeds from sales of Units | 4,000,000,000 | |||
Proceeds from sales of Sponsor and Director Warrants | 67,837,500 | |||
Payment of underwriting fees | (35,000,000 | ) | ||
Payment of offering costs | (3,288,187 | ) | ||
Proceeds from promissory note – related party | 1,121,120 | |||
Repayment of promissory note – related party | (1,121,120 | ) | ||
Proceeds from issuance of Class B Common Stock to Sponsor | 25,000 | |||
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| |||
Net cash provided by financing activities | 4,029,574,313 | |||
|
| |||
Net increase in cash | 25,348,287 | |||
Cash and cash equivalents – beginning of period | — | |||
|
| |||
Cash and cash equivalents – end of period | $ | 25,348,287 | ||
|
| |||
Supplemental disclosure of non-cash activities: | ||||
Deferred underwriting fees payable | $ | 56,250,000 | ||
|
| |||
Initial classification of common stock subject to possible redemption | $ | 3,968,453,540 | ||
|
| |||
Change in value of common stock subject to possible redemption | $ | (1,644,534 | ) | |
|
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Year Ended December 31, 2021 | Period From May 4, 2020 (Inception) Through December 31, 2020 | |||||||
Cash flows from operating activities: | ||||||||
Net income/(loss) | $ | 833,301,124 | $ | (954,881,205 | ) | |||
Adjustments to reconcile net income/(loss) to net cash used in operating activities: | ||||||||
Offering costs allocable to Outstanding Warrant liabilities | 0 | 912,625 | ||||||
Change in fair value of Forward Purchase Agreement liabilities/assets | (598,782,500 | ) | 593,893,320 | |||||
Change in fair value of Outstanding Warrant liabilities | (237,364,758 | ) | 358,644,962 | |||||
Dividends earned on marketable securities held in Trust Account | (99,839 | ) | (16,394 | ) | ||||
Realized gains on marketable securities held in Trust Account | (1,561,412 | ) | (1,491,597 | ) | ||||
Change in unrealized gains on marketable securities held in Trust Account | (188,775 | ) | (182,463 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Dividends receivable from operating account | 17 | (220 | ) | |||||
Prepaid expenses | 1,662,183 | (2,601,472 | ) | |||||
Accrued expenses | 616,207 | 1,207,263 | ||||||
Income taxes payable | (289,155 | ) | 289,155 | |||||
Due to related party | 3,789 | – | ||||||
Net cash used in operating activities | (2,703,119 | ) | (4,226,026 | ) | ||||
Cash flows from investing activities: | ||||||||
Investment of cash in Trust Account | 0 | (4,000,000,000 | ) | |||||
Cash withdrawn from Trust Account to pay income taxes | 596,509 | 0 | ||||||
Net cash provided by/(used in) investing activities | 596,509 | (4,000,000,000 | ) | |||||
Cash flows from financing activities: | ||||||||
Proceeds from sale of Units | – | 4,000,000,000 | ||||||
Proceeds from sale of Sponsor and Director Warrants | – | 67,837,500 | ||||||
Payment of underwriting fees | – | (35,000,000 | ) | |||||
Payment of offering costs | (85,000 | ) | (3,288,187 | ) | ||||
Proceeds from promissory note – related party | – | 1,121,120 | ||||||
Repayment of promissory note – related party | – | (1,121,120 | ) | |||||
Proceeds from issuance of Class B Common Stock to Sponsor | – | 25,000 | ||||||
Net cash provided by financing activities | (85,000 | ) | 4,029,574,313 | |||||
Net change in cash | (2,191,610 | ) | 25,348,287 | |||||
Cash and cash equivalents – beginning of period | 25,348,287 | 0 | ||||||
Cash and cash equivalents – end of period | $ | 23,156,677 | $ | 25,348,287 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for income taxes | $ | (596,509 | ) | $ | 0 | |||
Supplemental disclosure of non-cash activities: | ||||||||
Deferred underwriting fees payable | $ | 56,250,000 | $ | 56,250,000 | ||||
Initial classification of common stock subject to possible redemption | $ | – | $ | 4,000,000,000 | ||||
Change in value of common stock subject to possible redemption | $ | 1,542,672 | $ | 1,401,299 | ||||
2021
January and February 2022.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). The JOBS Act exempts emerging growth companies from being required
revised and it has different application dates for public or private companies, the Company can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with those of another public company difficult or impossible if such other public company is (i) not an emerging growth company or (ii) is an emerging growth company that has opted out of using the extended transition period, dueconform to the potential differences in accounting standards used.
current year presentation.
accounts and has not experienced any losses.
periods reported.
Total offering costs amounted to $94,623,187, which consist of $35,000,000 of upfront underwriting fees, $56,250,000 of deferred underwriting fees (further discussed in Note 5) and $3,373,187 of other offering costs, of which $912,625 was charged to expense, and $93,710,562 was charged to stockholders’ equity.
Reconciliation of Net Income / (Loss) per Common Share
For the Period from May 4, 2020 (inception) through December 31, 2020 | ||||
Net loss | $ | (1,430,298 | ) | |
Less: Net income attributable to common stock subject to possible redemption | (1,389,084 | ) | ||
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| |||
Adjusted net loss | $ | (2,819,382 | ) | |
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| |||
Weighted average shares outstanding, basic and diluted | 1,079,393 | |||
|
| |||
Basic and diluted net loss per common share | $ | (2.61 | ) | |
|
|
(in dollars, except per share amounts):
Year Ended December 31, 2021 | Period From May 4, 2020 (Inception) through December 31, 2020 | |||||||||||||||
(Basic) | (Diluted) | (Basic) | (Diluted) | |||||||||||||
Class A Common Stock Subject to Possible Redemption | ||||||||||||||||
Numerator: Earnings allocable to Class A Common Stock subject to possible redemption | ||||||||||||||||
Income earned in Trust Account | $ 1,850,026 | $ 1,850,026 | $ 1,690,454 | $ 1,690,454 | ||||||||||||
Income taxes | (307,349) | (307,349) | (289,155) | (289,155) | ||||||||||||
Net earnings | $ 1,542,677 | $ 1,542,677 | $ 1,401,299 | $ 1,401,299 | ||||||||||||
Denominator: Weighted-average Class A Common Stock subject to possible redemption | ||||||||||||||||
Weighted-average shares outstanding, Class A Common Stock subject to possible redemption | 200,000,000 | 219,454,901 | 200,000,000 | 224,130,690 | ||||||||||||
Net income per share, Class A Common Stock subject to possible redemption | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||||||
Non-Redeemable Class B Common Stock | ||||||||||||||||
Numerator: Net income/(loss) minus net earnings and change in fair value of FPA assets/liabilities | ||||||||||||||||
Net income/(loss) | $ 833,301,124 | $ 833,301,124 | $(954,881,205) | $(954,881,205) | ||||||||||||
Net earnings allocable to Class A Common Stock subject to possible redemption | (1,542,677) | (1,542,677) | (1,401,299) | (1,401,299) | ||||||||||||
Change in fair value of FPA assets/liabilities | 0 | (598,782,500) | 0 | 0 | ||||||||||||
Non-redeemable net income/(loss) | $ | 831,758,447 | $ | 232,975,947 | $(956,282,504) | $(956,282,504) | ||||||||||
Denominator: Weighted-average Non-redeemable Class B Common Stock | ||||||||||||||||
Weighted-average shares outstanding, Non-redeemable Class B Common Stock | 100 | 100 | 100 | 100 | ||||||||||||
Net income/(loss) per share, Non-redeemable Class B Common Stock | $ | 8,317,584.47 | $ | 2,329,759.47 | $(9,562,825.04) | $(9,562,825.04) | ||||||||||
and Contingencies
sheets.
Level 1: | Valuation determined based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. | |
Level 2: | Valuation determined based on observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. | |
Level 3: | Valuation determined based on unobservable inputs on the Company’s assessment of the assumptions that market participants would use in pricing the asset or liability. |
Description | Level | December 31, 2020 | ||||||||||
Assets: | ||||||||||||
Cash and marketable securities held in Trust Account | 1 | $ | 4,001,690,454 |
December 31, | ||||||||||
Description | Level | 2021 | 2020 | |||||||
Assets: | ||||||||||
Cash and marketable securities held in Trust Account | 1 | $ | 4,002,943,971 | $ | 4,001,690,454 | |||||
Committed Forward Purchase Agreement Asset | 3 | 6,569,180 | – | |||||||
Liabilities: | ||||||||||
Outstanding Warrants Liability – Public Warrants | 1 | 29,333,333 | 213,333,331 | |||||||
Outstanding Warrants Liability – Private Placement Warrants | 3 | 196,006,593 | 249,371,353 | |||||||
Committed Forward Purchase Agreement Liability | 3 | – | 429,783,320 | |||||||
Additional Forward Purchase Agreement Liability | 3 | 1,680,000 | 164,110,000 |
December 31, | ||||||||
Inputs – Private Placement Warrants | 2021 | 2020 | ||||||
Strike Price | $24.00 | $24.00 | ||||||
Risk-Free Interest Rate | 1.53% | 0.73% | ||||||
Observed Stock Price | $19.72 | $27.72 | ||||||
Public Warrant Price | $1.32 | $9.60 | ||||||
Term (Years) | 10.28 | 10.78 | ||||||
Volatility | 25.0% | 25.0% | ||||||
Illiquidity Discount | 20.0% | 17.0% | ||||||
Probability of Warrant Renegotiation | 18.8% | 24.5% |
December 31, | ||||||||
Inputs – Forward Purchase Agreements | 2021 | 2020 | ||||||
Exercise Price | $20.00 | $20.00 | ||||||
Risk-Free Interest Rate | 0.07% | 0.14% | ||||||
Observed Stock Price | $19.72 | $27.72 | ||||||
Public Warrant Price | $1.32 | $9.60 | ||||||
Term (Years) | 0.28 | 0.78 | ||||||
Discount for Lack of Marketability – Committed FPA | 1.0% | 3.0% | ||||||
Discount for Lack of Marketability – Additional FPA | 45.0% | 8.0% | ||||||
Discount for Probability of Exercise – Additional FPA | 79.8% | 79.8% |
Outstanding Warrants Liability | Public Warrants | Private Placement Warrants | Total Outstanding Warrants | |||||||||
Fair Value at May 4, 2020 (inception) | $ | 0 | $ | 0 | $ | 0 | ||||||
Initial Measurement | 36,222,222 | 67,837,500 | 104,059,722 | |||||||||
Change in Fair Value | 177,111,109 | 181,533,853 | 358,644,962 | |||||||||
Fair Value at December 31, 2020 | 213,333,331 | 249,371,353 | 462,704,684 | |||||||||
Change in Fair Value | (183,999,998 | ) | (53,364,760 | ) | (237,364,758 | ) | ||||||
Fair Value at December 31, 2021 | $ | 29,333,333 | $ | 196,006,593 | $ | 225,339,926 | ||||||
FPA Liability / (Asset) | Committed Forward Purchase Agreement | Additional Forward Purchase Agreement | Total Forward Purchase Agreements | |||||||||
Fair Value at May 4, 2020 (inception) | $ | 0 | $ | 0 | $ | 0 | ||||||
Initial Measurement | – | – | – | |||||||||
Change in Fair Value | 429,783,320 | 164,110,000 | 593,893,320 | |||||||||
Fair Value at December 31, 2020 – Liability | 429,783,320 | 164,110,000 | 593,893,320 | |||||||||
Change in Fair Value | (436,352,500 | ) | (162,430,000 | ) | (598,782,500 | ) | ||||||
Fair Value at December 31, 2021 – Liability / (Asset) | $ | (6,569,180 | ) | $ | 1,680,000 | $ | (4,889,180 | ) | ||||
December 31, 2020 | ||||
Deferred tax assets: | ||||
Startup expenses / Organizational costs | $ | 567,112 | ||
|
| |||
Total deferred tax assets | 567,112 | |||
Valuation Allowance | (528,795 | ) | ||
|
| |||
Deferred tax liabilities: | ||||
Unrealized gains on marketable securities | (38,317 | ) | ||
|
| |||
Total deferred tax liabilities | (38,317 | ) | ||
|
| |||
Net deferred tax asset, net of allowance | $ | — | ||
|
|
December 31, | ||||||||
2021 | 2020 | |||||||
Deferred tax assets: | ||||||||
Startup expenses / Organizational costs | $ | 1,446,417 | $ | 567,112 | ||||
Total deferred tax assets | 1,446,417 | 567,112 | ||||||
Valuation Allowance | (1,368,457 | ) | (528,795 | ) | ||||
Deferred tax liabilities: | ||||||||
Unrealized gains on marketable securities | (77,960 | ) | (38,317 | ) | ||||
Total deferred tax liabilities | (77,960 | ) | (38,317 | ) | ||||
Net deferred tax asset, net of allowance | $ | 0 | $ | 0 |
For the Period from May 4, 2020 (inception) through December 31, 2020 | ||||
Current | ||||
Federal | $ | 289,155 | ||
State | — | |||
Deferred | ||||
Federal | (528,795 | ) | ||
State | — | |||
Change in valuation allowance | 528,795 | |||
|
| |||
Income tax provision | $ | 289,155 | ||
|
|
December 31, | ||||||||
2021 | 2020 | |||||||
Current | ||||||||
Federal | $ | 307,349 | $ | 289,155 | ||||
State | 0— | 0 | ||||||
Deferred | ||||||||
Federal | (839,663 | ) | (528,795 | ) | ||||
State | 0— | 0 | ||||||
Change in valuation allowance | 839,663 | 528,795 | ||||||
Income tax provision | $ | 307,349 | $ | 289,155 | ||||
was $1,368,457 and $528,795, respectively.
| ||||
| ||||
| ||||
| ||||
December 31, | ||||
2021 | 2020 | |||
Statutory federal income tax rate | 21.0% | 21.0% | ||
State taxes, net of federal tax benefit | 0.0% | 0.0% | ||
Change in fair value of Forward Purchase Agreement liabilities | (15.1%) | (13.1%) | ||
Change in fair value of Outstanding Warrant liabilities | (6.0%) | (7.9%) | ||
Offering costs allocable to Outstanding Warrant liabilities | 0 | (0.0%) | ||
Change in valuation allowance | 0.1% | (0.0%) | ||
Income tax provision | (0.0%) | (0.0%) | ||
examination by the taxing authorities.
F-20