UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K/A

FORM 10-K
(Amendment No.1)

xANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Mark One)

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended Fiscal Year Ended December 31, 2020

¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

2022

or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Transition Period From         To

Commission file number:number 001-39496

Starboard Value Acquisition Corp.

cyxt-20221231_g1.jpg
Cyxtera Technologies, Inc.
(Exact name of registrant as specified in its charter)

Delaware84-3743013
Delaware84-3743013
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)

777 Third Avenue, 18th Floor
New York, NY

10017
(Address
2333 Ponce De Leon Boulevard Suite 900
Coral Gables, FL
33134
   (Address of principal executive offices)(Zip Code)

(305) 537-9500
Registrant’s telephone number: (212) 845-7977

number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Classeach classTrading
Symbol(s) Symbol
Name of Each Exchangeeach exchange on Which
Registeredwhich registered
Units, each consisting of one share of Class A Common Stock and one-sixth of one Redeemable Warrantcommon stock, par value $0.0001 per shareSVACUCYXTThe Nasdaq Stock Market LLC
Class A Common Stock, par value $0.0001 per shareSVACThe Nasdaq Stock Market LLC
Redeemable Warrants, exercisable for one share of Class A Common Stock for $11.50 per shareSVACWThe Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.

Yes ¨ No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrantRegistrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨

Indicate by check mark whether the registrantRegistrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrantRegistrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer¨Accelerated filer¨
Non-accelerated filerxSmaller reporting companyx
Emerging growth companyx

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ¨

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).: Yes x No ¨

As

The aggregate market value of voting and non-voting stock held by non-affiliates of the registrant on June 30, 2020, the last day of the registrant’s most recently completed second fiscal quarter, the registrant’s securities were not publicly traded. The registrant’s units began trading2022, based on the Nasdaq Capital Market on September 10, 2020 and the registrant’s sharesclosing price of $11.34 per share of Class A common stock and warrants began trading on the Nasdaq Capital Market on November 2, 2020. The aggregate market valueJune 30, 2022, was approximately $414,622,946.
As of March 13, 2023, there were approximately 179,683,659 shares of the registrant’s Class A common stock outstanding,outstanding.
DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the Cyxtera Technologies, Inc. Definitive Proxy Statement for its 2023 Annual Meeting of Shareholders (the “2023 Proxy Statement”) to be filed pursuant to Rule 14a-6 of the Securities Exchange Act of 1934, as amended, are incorporated by reference into this Form 10-K. Other than those portions of the 2023 Proxy Statement specifically incorporated by reference pursuant to Items 10 through 14 of Part III hereof, no other than shares held by persons who mayportions of the 2023 Proxy Statement shall be deemed affiliates of the registrant, computed by reference to the closing sales price for the Class A common stock on March 12, 2021, as reported on the Nasdaq Capital Market, was approximately $407,872,641.

As of March 12, 2021, 40,423,453 shares of Class A common stock, par value $0.0001, and 10,105,863 shares of Class B common stock, par value $0.0001, were issued and outstanding.

Documentsincorporated by reference: None.

so incorporated.



TABLE OF CONTENTS


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i


EXPLANATORY NOTE

References throughout this Amendment No. 1




PART I

Summary of Risk Factors

Our business is subject to numerous risks and uncertainties that make an investment in our shares of Class A common stock speculative or risky, any one of which could materially adversely affect our results of operations, financial condition or business. These risks include, but are not limited to, those listed below. This list is not complete, and should be read together with the section titled “Risk Factors” in this Annual Report on Form 10-K (this “Amendment No. 1”“Annual Report”) to “we,” “us,” “company”, “our company” or “SVAC” are to Starboard Value Acquisition Corp., a Delaware corporation. References to “management” or our “management team” are to our officers and directors. References to our “sponsor” are to SVAC Sponsor LLC, a Delaware limited liability company. References to our “initial stockholders” are toas well as the holders of our founder shares prior to our initial public offering (the “IPO”).

This Amendment No. 1 amends theother information in this Annual Report on Form 10-K of Starboard Value Acquisition Corp. forand the year ended December 31, 2020, as filedother filings that we make with the Securities and Exchange Commission (“SEC”(the “SEC”).


Risks Related to our Indebtedness
If we are unable to refinance our material indebtedness with near term maturities, we could be forced to liquidate and/or file for bankruptcy, and the holders of our Class A common stock could suffer a total loss on March 15, 2021 (the “Original Filing”), to restatetheir investment.
Our substantial indebtedness and our current liquidity constraints could materially adversely affect our financial statements as of December 31, 2020 and for the year ended December 31, 2020.

On April 12, 2021, the staff of the Securities and Exchange Commission (the “SEC Staff”) issued a public statement entitled “Staff Statement on Accounting and Reporting Considerations for Warrants issued by Special Purpose Acquisition Companies (“SPACs”)” (the “SEC Staff Statement”). In the SEC Staff Statement, the SEC Staff expressed its view that certain terms and conditions common to SPAC warrants may require the warrants to be classified as liabilities on the SPAC’s balance sheet as opposed to equity. Since issuance on September 14, 2020, our warrants and the forward purchase agreement (as defined below) were accounted for as equity within our balance sheet. After discussion and evaluation, including with our registered public accounting firmcondition, cash flows and our audit committee, and taking into consideration the SEC Staff Statement, we have concluded thatability to service our warrants and the forward purchase agreement should be presented as liabilities with subsequent fair value remeasurement.

Therefore, the company in consultation with its audit committee, concluded that its previously issued audited financial statements as of and for the year ended December 31, 2020 and the unaudited interim financial statements as of and for the three and nine months ended September 30, 2020 (collectively, the “Affected Periods”) should be restated because of a misapplicationdebt, which could negatively impact your ability to recover your investment in the guidance around accountingCompany’s Class A common stock.


Risks Related to Our Capital Needs and Capital Strategy
The agreements governing our indebtedness contain covenants that may limit our flexibility to raise additional capital and take advantage of certain business opportunities advantageous to us.
An inability to access external sources of capital on favorable terms or at all could limit our ability to execute our business and growth strategies.
Fluctuations in foreign currency exchange rates in the markets in which we operate internationally could harm our results of operations.

Risks Related to Our Business and Operations
Inflation in the global economy, increased interest rates and adverse global economic conditions, like the ones we are currently experiencing, could negatively affect our business and financial condition.
We are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability due to the ongoing military conflict between Russia and Ukraine.
Our business depends upon the demand for certaindata centers.
Our products and services have a long sales cycle that may harm our revenues and operating results.
A limited number of customers account for a substantial portion of our outstanding warrants to purchase common stock (the “Warrants”) and the forward purchase agreement and should no longer be relied upon.

Historically, the Warrants and the forward purchase agreement were reflected as a componentrevenues.

Any failure of equity as opposed to liabilities on the balance sheets and the statements of operations did not include the subsequent non-cash changes in estimated fair value of the Warrants and the forward purchase agreement, based on our application of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 815-40, Derivatives and Hedging, Contracts in Entity’s Own Equity (“ASC 815-40). The views expressed in the SEC Staff Statement were not consistent with the company’s historical interpretation of the specific provisions within its warrant agreement and the company’s application of ASC 815-40 to the warrant agreement. We reassessed our accounting for the Warrants issued on September 14, 2020 and the forward purchase agreement in light of the SEC Staff’s published views and, based on this reassessment, we determined that the Warrants and the forward purchase agreement should be classified as liabilities measured at fair value upon issuance, with subsequent changes in fair value reported in our statement of operations for each reporting period.

The change in accounting for the Warrants and the forward purchase agreement did not have anyphysical infrastructure, negative impact on our liquidity, cash flows, revenuesability to provide our services or damage to customer infrastructure within our data centers could lead to significant costs of operatingand disruptions that could reduce our revenue and harm our business reputation and financial results.

Our business could be harmed by prolonged power outages, power and fuel shortages, capacity constraints and increases in power costs.
Our international operations expose us to regulatory, currency, legal, tax and other risks.
If we are unable to recruit or retain key executives and qualified personnel, our business could be harmed.
We may not be able to compete successfully against current and future competitors.
Our operating results may fluctuate.
We have incurred substantial losses in the past and expect to incur additional losses in the future.
We have incurred a goodwill impairment charge.
We lease space in several locations under long-term non-cancellable lease agreements and the other non-cash adjustmentsnon-renewal or loss of such leases, or the continuing obligations under such leases in the event of a loss of customers or customer revenues, could have a material adverse effect on us.
If we cannot continue to develop, acquire, market and provide new offerings or enhanced offerings that meet customer requirements and differentiate us from competitors, our operating results could suffer.
3


Our customer contracts could subject us to significant liability.
Our ability to provide data center space to existing or new customers could be constrained by our ability to provide sufficient electrical power.

Risks Related to Data Security, Intellectual Property and Technology Industry Regulations
We may not be able to adapt to changing technologies and customer requirements, and our data center infrastructure may become obsolete.
We may be vulnerable to cybersecurity incidents, including physical and electronic breaches, which could disrupt our operations and have a material adverse effect on our financial performance and operating results.
Government regulation may adversely affect our business.

Risks Related to Environmental Laws and Climate Change Impacts
Environmental regulations may impose new or unexpected costs on us.
Our business may be adversely affected by climate change and responses to it.

Risks Related to Regulatory Compliance and Laws including Tax Laws
The requirements of being a public company, including maintaining adequate internal control over our financial and management systems, may strain our resources, divert management’s attention and affect our ability to attract and retain executive management and qualified board members.
Changes to applicable US or non-US tax laws and regulations and/or their interpretation may have an adverse effect on our business, financial condition and results of operations.
Our net operating losses (“NOLs”) may not be available to offset future taxable income in the financial statements,United States.

Risks Related to our Proposed Real Estate Investment Trust (“REIT”) Conversion
We may not be successful in allconverting to a REIT by January 1, 2024, or at all.

Risks Related to Our Class A Common Stock
Our stock price has recently been volatile.
Future sales, or the perception of future sales, of our Class A common stock by us or our existing securityholders in the public market could cause the market price for our Class A common stock to decline.
Anti-takeover provisions in our governing documents and under Delaware law could make an acquisition of us more difficult and/or limit attempts by our shareholders to replace or remove our current management.
We are an “emerging growth company” and the reduced disclosure requirements applicable to emerging growth companies may make our Class A common stock less attractive to investors.
Our certificate of incorporation and our bylaws provide that the Court of Chancery of the Affected PeriodsState of Delaware is the sole and exclusive forum for substantially all disputes between us and our shareholders, which limits our shareholders’ ability to obtain a favorable judicial forum for disputes with us, our directors, officers or in any of the periods included in Item 8, Financial Statements and Supplementary Data in this filing. The change in accountingemployees.
We do not intend to pay dividends on our Class A common stock for the Warrantsforeseeable future.
BCEC-SIS Holdings L.P, a Delaware limited partnership (the “BC Stockholder”) and Medina Capital Fund II - SIS Holdco, L.P., a Delaware limited partnership (“Medina Capital” or the forward purchase agreement does not impact“Medina Stockholder”) own a substantial amount of equity interests in us, and have other substantial interests in us and agreements with us, and may have conflicts of interest with us or the amounts previously reported for the company’s cash and cash equivalents, investments held in the trust account, operating expenses or total cash flows from operations for anyother holders of these periods.

We are filing this Amendment No. 1 to amend and restate the Original Filing with modification as necessary to reflect the restatements. The following items have been amended to reflect the restatements:

Part I, Item 1A. Risk Factors

Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Part II, Item 8. Financialour capital stock.



4



Cautionary Note Regarding Forward-Looking Statements and Supplementary Data

Part II, Item 9A. Controls and Procedures

In addition, the Company’s Chief Executive Officer and Chief Financial Officer have provided new certifications dated as of the date of this filing in connection with this Amendment No. 1 (Exhibits 31.1, 31.2, 32.1 and 32.2).

ii


Except as described above, no other information included in the Original Filing is being amended or updated by this Amendment No. 1 and this Amendment No. 1 does not purport to reflect any information or events subsequent to the Original Filing. This Amendment No. 1 continues to describe the conditions as of the date of the Original Filing and, except as expressly contained herein, we have not updated, modified or supplemented the disclosures contained in the Original Filing. Accordingly, this Amendment No. 1 should be read in conjunction with the Original Filing and with our filings with the SEC subsequent to the Original Filing.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K/A (this “Annual10-K (“Annual Report”), including, without limitation, statements under the heading “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” includes forward-looking statements. We intend such forward-looking statements withinto be covered by the meaning ofsafe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressionsAll statements other than statements of historical facts contained in this Annual Report may be forward-looking statements. In some cases, you can identify forward-looking statements butby terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the absencenegative of these words does not mean thatterms or other similar expressions. These statements include statements about Cyxtera Technologies, Inc.’s (the “Company” or “Cyxtera”) plans, including the Company’s ability to refinance its material indebtedness with near term maturities, the Company’s plan to convert to a statement is not forward-looking. Forward-lookingREIT and the timing of such conversion, and other statements concerning the Company’s objectives, strategies, financial performance and outlook, trends, the amount and timing of future cash distributions, prospects or future events.

The forward-looking statements in this Annual Report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may include, for example,affect our business, financial condition and results of operations. Forward-looking statements about:

involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, risks related to our material indebtedness with near term maturities; our ability to refinance or renew our existing indebtedness on favorable terms or at all; our ability to access external sources of capital on favorable terms or at all, which could limit our ability to execute our business and growth strategies; our ability to maintain our credit ratings; increases in interest rates; fluctuations in energy prices; fluctuations in foreign currency exchange rates in the markets in which we operate internationally; inflation; prolonged power outages, shortages or capacity constraints; physical and electronic security breaches and cyber attacks, which could disrupt our operations; any failure of our physical infrastructure or negative impact on our ability to provide our services, or damage to customer infrastructure within our data centers; inadequate or inaccurate external and internal information, including budget and planning data, which could lead to inaccurate financial forecasts and inappropriate financial decisions; our fluctuating operating results; our government contracts, which are subject to early termination, audits, investigations, sanctions and penalties; our reliance on third parties to provide internet connectivity to our data centers; the incurrence of goodwill and other intangible asset impairment charges, such as our recent impairment of goodwill, or impairment charges to our property and equipment, which could result in a significant reduction to our earnings; the requirements of being a public company, including maintaining adequate internal controls over financial and management systems; our ability to manage our growth; volatility of the market price of our Class A common stock; future sales, or the perception of future sales, of our Class A common stock by us or our existing security holders in the public market, which could cause the market price for our Class A common stock to decline; our ability to use our United States federal and state NOLs to offset future United States federal and applicable state taxable income may be subject to certain limitations that could accelerate or permanently increase taxes owed; our ability to address the significant implementation and operational complexities required to complete a conversion to a REIT, including, without limitation, completing internal reorganization and modifying accounting and information technology systems, and receiving any necessary stockholder and other approvals; our initial business combination with Cyxtera Technologies, Inc. or any other initial business combination (as defined below);

our expectations aroundability to apply highly technical and complex provisions of the performanceUS Internal Revenue Code of a prospective target business or businesses;

our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;

actual and potential conflicts of interest relating to Starboard Value LP (“Starboard”1986, as amended (the “Code”), to our directors, officers andoperations; risks related to the Industry Advisors (as defined below);

our officers and directors allocating their time to other businesses and potentially having conflictseffects of interest withthe COVID-19 pandemic on our business or future results, including supply chain disruptions; and other factors discussed in approving our initial business combination;

our ability to draw fromfilings with the support and expertise of Starboard;

our potential ability to obtain additional financing to complete our initial business combination;

our pool of prospective target businesses, including the location and industry of such target businesses;

the ability of our officers and directors to generate a number of potential business combination opportunities;

our public securities’ potential liquidity and trading;

the lack of a market for our securities;

the use of proceeds not heldSEC. The forward-looking statements in the trust account orthis Annual Report are based upon information available to us as of the date of this Annual Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and difficult to predict; investors are cautioned not to unduly rely upon these statements.

5


You should read this Annual Report and the documents that we reference in this Annual Report and have filed as exhibits to this Annual Report with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from interest income onwhat we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the trust account balance;

the trust accountdate of this Annual Report. Except as required by applicable law, we do not being subjectplan to claims of third parties;publicly update or

our financial performance.

The revise any forward-looking statements contained in this Annual Report, are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Item 1A. Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of any new information, future events or otherwise, except as may be required under applicable securities laws.

By their nature, forward-looking statements involve risksotherwise.



6


Item 1. Business.

History and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and developments in the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this Annual Report. In addition, even if our results of operations, financial condition and liquidity, and developments in the industry in which we operate are consistent with the forward-looking statements contained in this Annual Report, those results or developments may not be indicative of results or developments in subsequent periods.

iii

Background


PART I

Item 1.Business.

Overview

We are a blank check company

Cyxtera was incorporated in 2019Delaware as a Delaware corporation and formed forStarboard Value Acquisition Corp. (“SVAC”) on November 14, 2019. On July 29, 2021 (the “Closing Date”), SVAC consummated the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this Annual Report as our “initial business combination”.

Our sponsor is an affiliate of Starboard, a registered investment adviser with investment experience and a track record of value creation in portfolio companies operating in the public markets. Starboard has assembled a seasoned team of executives (the “Industry Advisors”), whom we believe will help us execute our differentiated investment strategy. Through our affiliation with our sponsor and Industry Advisors, we seek to acquire established businesses that we believe are fundamentally sound but potentially in need of financial, operational, strategic, or managerial transformation to maximize value for stockholders. We focus on private companies which we believe offer an opportunity for stockholder value creation through the combination of (i) an attractive valuation entry point, (ii) a clear plan to unlock incremental value through operational and/or strategic improvements, and (iii) a clear path to bring the target company to the public market and implement best-in-class public company governance. We seek to partner with the owners of private companies to offer them an option to create partial liquidity, transition their legacy to a public company and/or resolve any fragmented ownership or succession planning issues, all while maintaining a singular focus on driving the target business to a higher level of performance and value.

While we may pursue an acquisition opportunity in any business, industry, sector or geographical location, we focus on industries that align with the background of our sponsor and Industry Advisors. These industries include the technology, healthcare, consumer, industrials and hospitality & entertainment sectors, which we refer to as our targeted sectors. We believe that there are many potential business combination targets within these industries that could become attractive public companies. Furthermore, we believe that we are well-positioned to drive ongoing value creation post-business combination, based on the operational and investment experience and track record of our team within our targeted sectors over time. We believe our team is well-suited to identify and execute on opportunities that have the potential to generate attractive risk-adjusted returns for our stockholders. We are not, however, required to complete our initial business combination within our targeted sectors, and, as a result, we may pursue a business combination outside of these industries.


Company History

On September 14, 2020, we consummated our IPO of 36,000,000 units at $10.00 per unit, generating gross proceeds of $360.0 million. Each unit consists of one share of Class A common stock and one-sixth of one redeemable warrant (each, a “detachable redeemable warrant”) and a contingent right to receive at least one-sixth of one redeemable warrant following the time at which we redeem the shares of Class A common stock that the holders thereof have elected to redeem in connection with the initial business combination (the “initial business combination redemption time”) under certain circumstances and subject to adjustments (the “distributable redeemable warrants”). Our amended and restated certificate of incorporation provides that, at the distribution time (as defined below), we will effect a distribution of a number of warrants equal to the number of units issued in the IPO multiplied by one-sixth (the “Aggregate Warrant Amount”) as follows: (i) to the extent that no holders of public shares (the “public stockholders”) redeem their shares of Class A common stock issued in the IPO (whether acquired in the IPO or afterwards) (the “public shares”) in connection with the initial business combination, each public stockholder will receive one-sixth of one distributable redeemable warrant per public share and (ii) to the extent that any public stockholders redeem any of their public shares in connection with the initial business combination, then (A) one-sixth of one distributable redeemable warrant will be distributed per each public share that was not redeemed (the “remaining public shares”) and (B) the warrants in an amount equal to the Aggregate Warrant Amount less the number of warrants distributed pursuant to the foregoing clause (A) will be distributed on a pro rata basis to (x) the holders of the remaining public shares based on their percentage of Class A common stock held after redemptions and the issuance of any forward purchase shares (as defined below), as distributable redeemable warrants and (y) the holders of the forward purchase shares based on their percentage of Class A common stock held after redemptions and the issuance of any forward purchase shares, as private placement warrants. Public stockholders who exercise their redemption rights are not entitled to receive any distribution of distributable redeemable warrants in respect of such redeemed public shares. The number of distributable redeemable warrants to be distributed in respect of each public share is contingent upon the aggregate number of public shares that are redeemed in connection with our initial business combination. The “distribution time” references the time at which the distributable redeemable warrants and the private placement warrants, if any, to the forward purchasers (as defined below) will be distributed, which will occur immediately after the initial business combination redemption time and immediately prior to the closing of our initial business combination.

On September 18, 2020, the underwriters in the IPO partially exercised their over-allotment option and on September 23, 2020, purchased an additional 4,423,453 units (the “over-allotment units”), generating gross proceeds of approximately $44.2 million.

Simultaneously with the closing of the IPO, we completed the private sale of an aggregate of 6,133,333 warrants (the “private placement warrants”) to our sponsor, at a purchase price of $1.50 per private placement warrant, generating gross proceeds to us of $9.2 million. In connection with the underwriters’ partial exercise of their over-allotment option, our sponsor purchased an additional 589,794 private placement warrants, at a purchase price of $1.50 per private placement warrant, generating gross proceeds to us of approximately $0.9 million.

Upon the closing of the IPO, the sale of the private placement warrants, the sale of the over-allotment units and 589,794 additional private placement warrants, $404.2 million ($10.00 per unit) of the net proceeds of such sales were placed in a trust account located in the United States with Continental Stock Transfer & Trust Company acting as trustee (the “trust account”), and invested only in U.S. “government securities,” within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less, or in money market funds meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4) of Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations, as determined by us, until the earlier of: (i) the completion of an initial business combination and (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide holders of our Class A common stock the right to have their shares redeemed or to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of the IPO, or with respect to any other material provision relating to stockholder rights or pre-initial business combination activity; and (iii) the redemption of all of our public shares if we are unable to complete our initial business combination within 24 months from the closing of the IPO, subject to applicable law.

On September 9, 2020, certain clients of Starboard, which are also the majority-owners of our sponsor, entered into an amended and restated forward purchase agreement (the “forward purchase agreement”) with us pursuant to which such clients (the “forward purchasers”) will purchase shares of our Class A common stock (“forward purchase shares”) at a price equal to $9.50 per share, in a private placement that will close simultaneously with the closing of our initial business combination. At the closing, the forward purchasers will purchase the number of forward purchase shares from us that would result in net proceeds in an aggregate amount necessary to satisfy our aggregate payment obligations resulting from the exercise of redemption rights by holders of our public shares in connection with our initial business combination (the “Redemption Obligation”), subject to a maximum funding commitment by the forward purchasers of $100,000,000 (the “Maximum Backstop Commitment”). In addition, in connection with their purchase of any forward purchase shares, the forward purchasers will acquire private placement warrants at the distribution time as further described above.


In November 2019, our sponsor purchased an aggregate of 8,625,000 shares of our Class B common stock (our “founder shares”) for an aggregate purchase price of $25,000, or approximately $0.003 per share. In June 2020, our sponsor transferred (i) 431,250 founder shares to Martin D. McNulty, Jr., our Chief Executive Officer and a member of our board of directors, and (ii) 25,000 founder shares to each of Pauline J. Brown, Michelle Felman and Lowell Robinson. In July 2020, our sponsor transferred 25,000 founder shares to Robert L. Greene. On September 9, 2020, we effected a stock dividend of 1,725,000 shares with respect to our Class B common stock, resulting in our initial stockholders holding an aggregate of 10,350,000 founder shares. An aggregate of 244,137 of such founder shares held by our sponsor and our Chief Executive Officer were forfeited upon the underwriters’ partial exercise of the over-allotment option on September 18, 2020. The number of founder shares issued was determined based on the expectation that the founder shares would represent 20% of the outstanding shares of our Class A common stock and our Class B common stock (collectively, the “common stock”) upon the completion of our IPO. The founder shares will be worthless if we do not complete an initial business combination.

Proposed Business Combination

On February 21, 2021, we entered into an Agreement and Plan of Merger, dated February 21, 2021 (the “Merger Agreement”) with, by and among SVAC, Cyxtera Technologies, Inc. (now known as Cyxtera Technologies, LLC), a Delaware corporation (“Legacy Cyxtera”), Mundo Merger Sub 1, Inc., a Delaware corporation and wholly-ownedwholly owned subsidiary of SVAC (“Merger Sub 1”), Mundo Merger Sub 2, LLC (now known as Cyxtera Holdings, LLC), a Delaware limited liability company and wholly-ownedwholly owned subsidiary of SVAC (“Merger Sub 2”), Cyxtera Technologies, Inc., a Delaware corporation (“Cyxtera” and, together with Mundo Merger Sub 1, the “Merger Subs”), and Mundo Holdings, Inc. (“NewCo”), a Delaware corporation and wholly-ownedwholly owned subsidiary of SIS Holdings LP, a Delaware limited partnership (“and the sole stockholder of Legacy Cyxtera Stockholder”(“SIS”), which provides for, among other things, (i). Pursuant to the Merger Agreement, Legacy Cyxtera to bewas contributed to Newco by the Cyxtera Stockholder, with Cyxtera becomingNewCo and then converted into a wholly-owned subsidiary of Newco, (ii)limited liability company and, thereafter, Merger Sub 1 to bewas merged with and into NewCo, (the “First Merger”), with NewCo surviving the First Mergersuch merger as a wholly-ownedwholly owned subsidiary of SVAC, and Merger Sub 1 ceasing to exist, and (iii) immediately following such merger and as part of the First Merger,same overall transaction, NewCo to bewas merged with and into Merger Sub 2, (the “Second Merger”, and together with the First Merger and the other transactions contemplated by the Merger Agreement, the “Cyxtera Business Combination”), with Merger Sub 2 surviving the Second Mergersuch merger as a wholly-ownedwholly owned subsidiary of SVAC (the “Business Combination” and, NewCo ceasingcollectively with the other transactions described in the Merger Agreement, the “Transactions”). On the Closing Date, and in connection with the closing of the Business Combination, SVAC changed its name to exist.

Cyxtera Technologies, Inc.


Business Overview

We are a global data center leader in retail colocation and interconnection services. We provide an innovative suite of deeply connected and intelligently automated infrastructure and interconnection solutions to more than 2,300 leading enterprises, service providers and government agencies around the world – enabling them to scale faster, meet rising consumer expectations and gain a competitive edge.

We believe that our data center platform sets us apart from our competitors in the data center industry in the following ways:

Global Footprint: Over 65 facilities in 33 markets on three continents.

Breadth of Offering: Complete suite of colocation, connectivity and bare metal solutions.

World-Class Platform: High-quality assets with dense connectivity and a strong customer ecosystem.

Market Leadership: Recognized as a leader by customers and industry thought leaders.

Continuous Innovation: Proven track record of developing innovative products and services.

We focus exclusively on carrier-neutral retail colocation, interconnection and related services, an area we believe represents the sweet spot within the broader data center industry.

We have a large global footprint, which includes key markets in North America, Europe and Asia. This scale and geographic reach enable us to deliver solutions to enterprises, service providers and government agencies in the locations where they want to be – near population centers, customers, employees and service providers – and to support their growth with deployments in multiple data centers across several markets. Our 251 MW of total power capacity and 56.6 MW of available expansion capacity is balanced across our platform, positioning us to meet the expanding requirements of our strong customer base.

The scale and density of our interconnection platform strengthens our customer value proposition. Our interconnection platform includes more than 307 individual network service providers, with an average of 24 per site; low latency connectivity to major public cloud zones from virtually all of our data centers; and more than
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40,000 cross-connects. Our interconnection solutions are the backbone of a global platform of data centers that operate as an ecosystem where our customers can easily connect to other enterprises and business partners, including a wide range of network service providers, public cloud service providers and “as a Service” providers. Utilizing innovative, software-defined and API-driven solutions, we make all of these products easier to consume, allowing customers to deploy, access and manage their IT infrastructure solutions with the click of a button.

We believe we have a stable and predictable business model, with more than 90% of our revenue being recurring revenue, fixed term customer contracts (typically three years), long-tenured customer relationships and network effects that drive customer stickiness.

Our Product Portfolio

We provide a variety of data center products and services that are specifically designed to address the needs of enterprises, service providers and government agencies. The following are our primary service and product offerings:

Colocation: We offer retail colocation services in 65 high-quality, highly connected data centers in 33 markets on three continents. Our colocation services provide customers space and power in our reliable, redundant and secure data centers to host their critical applications and workloads in an integrated ecosystem. Colocation space and power services are offered under fixed duration contracts (typically three years) and billed on a monthly basis generating monthly recurring revenue.

Interconnection: Our carrier- and cloud-neutral, densely connected global data center footprint and thriving partner ecosystem deliver the local, global and cloud connectivity options customers need for today’s distributed hybrid IT. We offer traditional physical cross connects as well as virtual cross connects that can be provisioned on-demand through the Cyxtera Digital Exchange. These offerings provide customers the ability to establish fast, convenient, affordable and highly reliable connections to their preferred network service providers, low latency public cloud on-ramps and a wide range of technology and network service providers and business partners. Interconnection services are offered on month-to-month contract terms and generate monthly recurring revenue.

Bare Metal: Cyxtera Enterprise Bare Metal is an on-demand IT infrastructure solution that allows customers to consume our data center services in a cloud-like fashion by enabling customers to purchase compute solutions “as a Service.” Our fully automated provisioning platform enables customers to seamlessly connect to partner services, including single-tenant, private bare metal servers from NVIDIA, Nutanix, Fujitsu, HPE and Dell. Enterprise Bare Metal offers the best of all worlds – rapid access to high-performance compute power to solve for even the most bandwidth-intensive AI and ML workloads, the ability to rapidly scale up and down in accordance with business requirements and the financial benefits associated with having a predictable monthly operating expense rather than a large, upfront capital purchase. Enterprise Bare Metal services are offered under fixed duration contracts and billed on a monthly basis generating monthly recurring revenue.

Cyxtera SmartCabs: Cyxtera SmartCabs are on-demand, dedicated colocation cabinets, complete with built-in power and integrated, configurable, core network fabric. Cyxtera SmartCabs allows customers to instantly deploy and dynamically configure their end-to-end colocation infrastructure in a cloud-like, on-demand model with direct access to a robust ecosystem of technology and service providers available across Cyxtera’s global platform. Integrated with Cyxtera’s massively scalable and highly secure network fabric and offering access to network connectivity from Cyxtera’s on-demand Layer 3 bandwidth solution, IP Connect, Cyxtera SmartCabs enable customers to achieve rapid connectivity in an as-a-service model without requiring them to bring in additional network hardware or incur further capital expenditures to get started. Cyxtera SmartCabs is currently available in 12 markets.

Deployment Services: We offer a variety of value-added services to help customers streamline data center deployment and reduce time-to-solution. These services are provided by our team of industry-recognized personnel and include custom data center installation and set-up, access to secure cages and cabinets, integrated structured
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cabling solutions including cage design, rack layout and rack elevation and the ability to deliver a turnkey environment. Deployment services are one-time in nature and generally billed at the time of completion or delivery.

Gold Support: Through our gold support services, our infrastructure professionals are available 24 hours a day, 7 days a week to assist customers with routine management of their environments such as server reboots, telecommunications support, equipment racking and stacking, operating system loading and magnetic tape backups of critical data. Gold support services can be consumed on an ad hoc basis or in pre-paid blocks, in each case generating non-recurring revenue. Customers can also elect to purchase recurring monthly blocks of gold support hours, generating monthly recurring revenue.

Our Business Segment Financial Information

The Company manages its operations as a single operating segment for the purposes of assessing performance and making operating decisions – the colocation segment.

The Company derives the significant majority of its colocation revenue from sales to customers in the United States, based upon the service address of the customer. Revenue derived from customers outside the United States, based upon the service address of the customer, was not significant in any individual foreign country.

Competition

We compete with numerous providers of data center and interconnection services. Many of these companies own or operate data centers similar to ours in the same markets in which our data centers are located. Certain of our data center competitors include Digital Realty Trust, Inc. and Equinix, Inc. as well as several privately held data center services providers. We believe that we are differentiated from most competitors in the retail data center industry because we offer a true platform with the large scale and geographic reach of our data center portfolio, density of our interconnection platform – which creates an ecosystem where our customers can easily connect to other enterprises and business partners – and innovative, software-defined technologies that increase the value proposition for customers by making it easier for them to address their hybrid IT infrastructure needs. See “Risk Factors—Risks Related to Our Business and Operations—We may not be able to compete successfully against current and future competitors.”

Customers

Our customers include network service providers, cloud and IT services providers, digital media and content providers, financial services companies and global enterprises in various industries. We have more than 2,300 customers, and Lumen accounted for 10% of the total revenues as of December 31, 2022. We provide each customer access to a choice of highly customized solutions based on their scale, colocation and interconnection needs.

Intellectual Property

We rely on trademarks, domain names, patents, copyrights, trade secrets, contractual provisions and restrictions on access and use to establish and protect our proprietary rights. These include: trademark registrations and applications for “Cyxtera” and the Cyxtera logo; issued patents and pending patent applications covering various technologies related to our Cyxtera Digital Exchange offering; and various domain name registrations, including for “cyxtera.com.”

Human Capital

As of December 31, 2022, we had 755 employees worldwide, with 672 based in the United States and Canada, 61 based in Europe, and 22 based in Asia-Pacific. Of those employees, 424 were in engineering and
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operations, 147 were in sales and marketing, and 184 were in management, finance and administration. In addition, of the 755 employees, 752 were full-time employees.

Commitment to Diversity

We have made a commitment to diversity, equity and inclusion in the workplace, one where everyone has the opportunity to fully participate and is valued for their distinctive skills, experiences and perspectives. We make all recruiting, payment, performance and promotion decisions based on merit, without discrimination on the basis of gender, sexual orientation, age, family status, ethnic origin, nationality, disability or religious belief.

Employee Development and Recognition

We have invested in resources and opportunities to allow our team members to develop and enhance their skills, including through Cyxtera University, our on-demand learning channel that allows employees to access homegrown and third-party learning tools and content. We seek to proactively recognize employees who are performing at a high level, including through quarterly “Spotlight Awards” that provide for cash bonuses and recognition on our quarterly all-employee town hall meetings.

In early 2022, we launched the Cyxtera Leadership Development Program, a strategic initiative designed to identify and develop the next generation of our company leadership. Participants, who range from Vice Presidents to individual contributors, were selected based on their current outstanding performance, overall skill set and leadership potential.The goal of the program is to work with each selected employee to assess their current leadership skills and identify areas of focus and improvement to enable and empower their future career path.

Employee Health and Safety

We are dedicated to ensuring the health and safety of our team members, customers, partners and suppliers. To that end, our dedicated global health and safety function ensures that employees are trained on best practices to create a safe and healthy workplace for all.

Employee Engagement and Satisfaction

We conduct periodic employee surveys as a means to receive feedback from our team members and improve employee engagement and satisfaction. We intend to conduct such surveys on at least an annual basis.

Sustainability

We are committed to protecting, connecting and powering a more sustainable digital world and to greening our customers’ supply chains. Through our sustainability efforts, Cyxtera strives to protect our planet and climate, unleash our people’s potential to be a force for good and lead with purpose and integrity in everything we do. Our definition of business growth and success includes steadfastly adhering to best-in-class environmental, social and governance (“ESG”) practices.

Environmental Matters

We are exposed to various environmental risks that may result in unanticipated losses and could affect our operating results and financial condition. Either the previous owners or we have conducted environmental reviews on a majority of the properties we have acquired. While some of these assessments have led to further investigation and sampling, none of the environmental assessments have revealed an environmental liability that we believe would have a material adverse effect on our business, financial condition or results of operations. See “Risk Factors
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—Risks Related to Environmental Laws and Climate Change Impacts—Environmental regulations may impose new or unexpected costs on us.”

Insurance

We carry comprehensive general liability, property, earthquake, flood and business interruption insurance covering all of the properties in our portfolio. We also carry coverage for technology professional liability and cybersecurity. We have selected policy specifications and insured limits that we believe to be appropriate given the relative risk of loss, the cost of the coverage and industry practice. In the opinion of our management, we maintain adequate insurance with limits and coverages we believe to be commercially reasonable. We do not carry insurance for generally uninsured losses such as loss from riots and war, because such coverage is not available or is not available at commercially reasonable rates. In addition, although we carry earthquake and flood insurance on our properties in an amount and with deductibles that we believe are commercially reasonable, such policies are subject to limitations in certain flood and seismically active zones. Certain of the properties in our portfolio are located in areas known to be seismically active. See “Risk Factors—Risks Related to Our Business and Operations—The level of insurance coverage that we purchases may prove to be inadequate.”

Available Information

Our Website and Availability of SEC Reports and Other Information

The Company maintains a website at the following address: https://www.cyxtera.com. The information on the Company’s website is not incorporated by reference in this Annual Report or in any other report or document we file with the SEC, and any references to our website are intended to be inactive textual references only.

We make available on or through our website certain reports and amendments to those reports we file with or furnish to the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act. These include our annual reports on Form 10-K, our quarterly reports on Form 10-Q, and our current reports on Form 8-K. We make this information available on our website free of charge as soon as reasonably practicable after we electronically file the information with, or furnish it to, the SEC. The SEC also maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The address of the site is https://www.sec.gov.

Investors and others should note that Cyxtera routinely announces material information to investors and the marketplace using SEC filings, press releases, public conference calls, webcasts and the Cyxtera investor relations website. We also intend to use certain social media channels as a means of disclosing information about us and our business to our colleagues, customers, investors and the public (Twitter - @cyxtera (https://twitter.com/cyxtera), Facebook – Cyxtera Technologies (https://www.facebook.com/cyxtera), and LinkedIn – Cyxtera Technologies (https://www.linkedin.com/company/cyxtera)). The information posted on social media channels is not incorporated by reference in this Annual Report or in any other report or document we file with the SEC. While not all of the information that the Company posts to the Cyxtera investor relations website or to social media accounts is of a material nature, some information could be deemed to be material. Accordingly, the Company encourages investors, the media and others interested in Cyxtera to review the information that it shares on the Company’s investor relations website at www.ir.cyxtera.com, and regularly follow our social media accounts.


Item 1A. Risk Factors.

You should carefully consider the following risk factors, together with all of the other information included in this Annual Report and in our other public disclosures. The risks described below highlight potential events, trends or other circumstances that could adversely affect our business, financial condition, results of operations, cash flows, liquidity or access to sources of financing and could adversely affect the trading price of our securities. These risks could cause our future results to differ materially from historical results and from guidance we may provide regarding our expectations of future financial performance. This Annual Report also contains forward-
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looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks faced by us described below and elsewhere in this Annual Report.

Risks Related to Our Indebtedness

If we are unable to refinance our material indebtedness with near term maturities, we could be forced to liquidate and/or file for bankruptcy, and the holders of our Class A common stock could suffer a total loss on their investment.

We have substantial debt with near term maturities.Specifically, our $120.1 million revolving credit facility would have matured on November 1, 2023 (the “2021 Revolving Facility”) and our term loan facilities with $869.0 million of outstanding indebtedness as of December 31, 2022 mature on May 1, 2024 (the “2017 First Lien Term Facility” and the “2019 First Lien Term Facility,” and collectively with the 2021 Revolving Facility, the “Senior Secured Credit Facilities”). On March 14, 2023, we entered into an amendment to our 2021 Revolving Facility, which, among other things, provided for an extension of the maturity date from November 1, 2023 to April 2, 2024, an approximately $18 million reduction to the borrowing capacity under such facility, a transition of the benchmark rate for such facility from LIBOR to SOFR, increases to the applicable interest rates for borrowings under such facility and certain other covenant modifications, including additional limitations on our ability to make investments and incur indebtedness. The Company is actively attempting to extend the maturity on, or refinance or repay, its revolving credit facility and long-term debt that mature in April 2024 and May 2024, respectively, to ensure it will have positive cash flow for the long-term foreseeable future. However, if the Company cannot successfully extend its revolving credit facility and long-term debt, or refinance or repay its revolving credit facility and long-term debt with proceeds from other sources, the Company will not be able to meet its financial obligations when due in April 2024 and May 2024, respectively. As a result, the Company could be forced to consider all strategic alternatives including restructuring its debt, seeking additional debt or equity capital, reducing or delaying its business activities and strategic initiatives or selling assets, other strategic transactions and/or other measures, including liquidation or filing for bankruptcy. Our ability to successfully extend, refinance or repay our long-term debt could be adversely affected by numerous factors outside of our control, including changes in the Cyxtera Business Combination, Cyxteraeconomic or business environment, financial market volatility and the various operating subsidiariesperformance of Cyxtera will become subsidiariesour business. We caution that trading in our securities is highly speculative, and the trading prices for our securities may bear little or no relationship to the actual recovery, if any, by holders of SVAC, withour Class A common stock in any bankruptcy or liquidation proceedings that we may be forced to undertake if we are unable to extend, refinance or repay our long-term debt. In the Cyxtera Stockholder becomingevent of a stockholderbankruptcy or liquidation, the claims in respect of SVAC. Upon closingindebtedness rank senior to claims of an equity holder, and the Cyxtera Business Combination, we will be renamed “Cyxtera Technologies, Inc.”

As a consequence of the Cyxtera Business Combination, each issued and outstanding founder share will automatically convert into a shareholders of Class A common stock could suffer a total loss on their investment. Even if we are able to refinance our debt, the terms of any refinancing may not be as favorable as the terms of our existing debt. Furthermore, if prevailing interest rates or other factors at the time of refinancing result in higher interest rates upon refinancing, then the interest expense relating to that refinanced indebtedness would increase. These risks could materially adversely affect our financial condition, cash flows and results of operations.


Our substantial indebtedness and our current liquidity constraints could materially adversely affect our financial condition, cash flows and our ability to service our debt, which could negatively impact your ability to recover your investment in the Company’s Class A common stock.

We have a one-for-one basis. The Cyxtera Business Combination is expectedsignificant amount of outstanding indebtedness. As of December 31, 2022, we had $1,121.8 million and $907.0 million in finance lease obligations and long-term debt outstanding under our Senior Secured Credit Facilities, respectively. If we are unable to close mid-2021, followingmaintain or increase our profitability and cash flows and sustain such results in future periods, our ability to service our debt and/or comply with the receiptfinancial and/or operating covenants under our Senior Secured Credit Facilities could be adversely affected. Our substantial amount of debt and related covenants and the current constraints on our liquidity could have important consequences. For example, they could:

require us to dedicate a substantial portion of our cash flows from operations to make interest and principal payments on our debt, reducing the availability of our cash flows to fund future capital expenditures, expansion efforts, working capital and other general corporate requirements;

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increase the likelihood of negative outlook from credit rating agencies, or of a further downgrade to our current rating;

make it more difficult for us to satisfy our obligations under our various debt instruments;

increase our cost of borrowing and limit our ability to access additional debt to fund future growth or maintain adequate liquidity;

increase our vulnerability to general adverse economic and industry conditions and adverse changes in governmental regulations;

limit our flexibility in planning for, or reacting to, changes in our business and industry;

limit our operating flexibility through covenants with which we must comply; and

make us more vulnerable to increases in interest rates because of the required approvalvariable interest rates on some of our borrowings.

The occurrence of any of the foregoing factors could have a material adverse effect on our business, results of operations and financial condition, which could negatively impact your ability to recover your investment in the Company’s Class A common stock.

Our ability to meet our expenses, to remain in compliance with our covenants under our Senior Secured Credit Facilities and to make future principal and interest payments in respect of our debt depends on, among other factors, our operating performance, competitive developments and financial market conditions, all of which are significantly affected by financial, business, economic and other factors. We are not able to control many of these factors. Given current industry and economic conditions, our stockholderscash flows may not be sufficient to allow us to pay principal and interest on our debt and meet our other obligations.

Risks Related to Our Capital Needs and Capital Strategy

The agreements governing our indebtedness contain covenants that may limit our flexibility to raise additional capital and take advantage of certain business opportunities advantageous to us.

We may need to incur additional debt to support our growth in the fulfillmentfuture. Our substantial amount of debt and related covenants could impair our ability to obtain additional financing for working capital, capital expenditures, acquisitions or general corporate purposes may be impaired. Our Senior Secured Credit Facilities contain various covenants that limit our ability to, among other customary closing conditions.

In connectionthings:


pay dividends or make other distributions to our shareholders;

make restricted payments;

incur liens;

engage in transactions with the Merger Agreement, the Cyxtera Stockholderaffiliates;

modify certain material contracts; and

enter into business combinations.

On March 14, 2023, we entered into a Stockholder Support Agreement with SVAC and Cyxtera (the “Stockholder Support Agreement”), pursuantan amendment to our 2021 Revolving Facility, which, among other things, provided for an extension of the Cyxtera Stockholder agreedmaturity date from November 1, 2023 to (i) provide its consentApril 2, 2024, an approximately $18 million reduction to the borrowing capacity under such facility, a transition of the benchmark rate for such facility from LIBOR to SOFR, increases to the applicable interest rates for borrowings under such facility and
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certain other covenant modifications, including additional limitations on our ability to make investments and incur indebtedness. These restrictions could limit our ability to obtain future financing, make acquisitions, fund needed capital expenditures, withstand economic downturns in our business or the economy in general, conduct operations or otherwise take advantage of business opportunities that may arise. At the same time, the covenants contained in our Senior Secured Credit Facilities may not provide investors with protections against transactions that they may deem undesirable. These risks could materially adversely affect our financial condition, cash flows and results of operations.

An inability to access external sources of capital on favorable terms or at all could limit our ability to execute our business and growth strategies.

We may not be able to fund future capital needs from operating cash flow, especially with respect to new data center expansions and acquisitions. Consequently, we intend to rely on third-party sources of capital to fund a substantial amount of our future capital needs. Any additional debt we incur will increase our leverage, expose us to the risk of default and impose operating restrictions on us. In addition, any equity financing could be materially dilutive to the equity interests held by our shareholders. Our access to third-party sources of capital depends, in part, on general market conditions, the market’s perception of our growth potential, our leverage, our current and expected results of operations, liquidity, financial condition and the market price of our Class A common stock. There can be no assurances that we can successfully obtain third-party capital on favorable terms or at all. If we cannot obtain capital when needed, we may not be able to execute our business and growth strategies, satisfy our debt service obligations or fund our other business needs, which could have a material adverse effect on us.

Fluctuations in foreign currency exchange rates in the markets in which we operate internationally could harm our results of operations.

We may experience gains and losses resulting from fluctuations in foreign currency exchange rates. A majority of revenues and costs in our international operations are denominated in foreign currencies. We are exposed to risks resulting from fluctuations in foreign currency exchange rates in connection with our international operations. As was the case in 2022, our earnings before interest, depreciation, amortization and taxes could be adversely affected by declines in foreign currencies relative to the US Dollar. Declines in the US Dollar relative to foreign currencies, on the other hand, could lead to our operating costs being more than anticipated to the extent we are required to pay foreign contractors in foreign currencies.

In addition, fluctuating foreign currency exchange rates have a direct impact on how our international results of operations translate into US Dollars. We do not currently have any foreign exchange hedging transactions to reduce foreign currency transaction exposure. Therefore, if the US Dollar strengthens relative to the currencies of the foreign countries in which we operate, as was the case in 2022, our consolidated financial position and results of operations may be negatively impacted as amounts in foreign currencies will generally translate into fewer US Dollars.

Risks Related to Our Business and Operations

Inflation in the global economy, increased interest rates and adverse global economic conditions, like the ones we are currently experiencing, could materially adversely affect our business and financial condition.

Inflation in the United States, Europe and other regions has risen to levels not experienced in recent decades, and it has had a material impact on our business, by, for example, materially increasing our interest rate payments on our outstanding debt and the cost of obtaining new capital. Rising prices for materials related to construction and our data center offerings, energy and gas prices, as well as rising wages and benefits costs negatively impact our business by increasing our operating costs. The levels of inflation we are currently experiencing may cause a decrease in sales of our offerings should customers scale back their operations and could result in churn in our customer base, reductions in revenues from our offerings, longer sales cycles, slower adoption of new technologies and increased price competition, which could adversely affect our liquidity. Customers and vendors filing for bankruptcy could also lead to costly and time-intensive actions with adverse effects, including
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greater difficulty or delay in accounts receivable collection. Adverse global economic conditions like the Merger Agreementones we are currently experiencing with global inflation, the increased cost of power, and supply chain issues have created, and in the future may increase, risk to our business and financial outlook.

Our efforts to mitigate the risks associated with these adverse conditions may not be successful and our business and growth could be materially adversely affected.

We are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability due to the ongoing military conflict between Russia and Ukraine. Our business, financial condition and results of operations may be materially adversely affected by any negative impact on the global economy and capital markets resulting from the conflict in Ukraine or any other geopolitical tensions.

US and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the transactions contemplatedstart of the military conflict between Russia and Ukraine. On February 24, 2022, a full-scale military invasion of Ukraine by Russian troops occurred. Although the length and impact of the ongoing military conflict is highly unpredictable, the conflict in Ukraine has led to market disruptions, including significant volatility in commodity prices, credit and capital markets, and to supply chain interruptions for micro-electronics and components required in the manufacture of equipment that we and/or our customers use in the provision or use of our services. We are experiencing an increase in our costs to procure power, which has been exacerbated by the Merger Agreement, including the mergersongoing military conflict between Russia and the pre-closing restructuring, and (ii) take all actions necessary or appropriate to contribute its equity securities in Cyxtera to NewCo and otherwise cause the pre-closing restructuring to occur in accordance with the Merger Agreement.Ukraine. In addition, the current volatility in the financial markets, which has been significantly impacted by geopolitical instability due to the ongoing military conflict between Russia and Ukraine, could affect our ability to access the capital markets at a time when we desire, or need, to do so, which could have an impact on our liquidity, ability to refinance our existing debt, flexibility to pursue additional expansion opportunities and maintain our desired level of revenue growth in the future. The ongoing conflict could also compromise existing semiconductor chip production and have downstream implications for us. We are continuing to monitor the situation in Ukraine and globally and assessing its potential impact on our business.

Our business depends upon the demand for data centers.

We are in the business of owning, leasing and operating data centers. A reduction in the demand for data center space, power or connectivity would have a greater adverse effect on our business and financial condition than if we had less specialized use. We are susceptible to general economic slowdowns as well as adverse developments in the data center, internet and data communications and broader technology industries. Any such slowdown or adverse development could lead to reduced corporate information technology (“IT”) spending or reduced demand for data center space. Reduced demand could also result from business relocations, including to markets that we do not currently serve. Changes in industry practice or in technology could also reduce demand for the physical data center space we provide. In addition, our customers may choose to develop new data centers or expand their own existing data centers or consolidate into data centers that we do not own or operate, which could reduce demand for our data centers or result in the loss of one or more key customers. If any of our key customers were to do so, it could result in a reduction in our revenues and/or put pressure on our pricing. If we lose a customer, we may not be able to replace that customer at a competitive rate or at all. Mergers or consolidations could reduce further the number of our customers and potential customers and make us more dependent on a more limited number of customers. If our customers merge with or are acquired by other entities that are not our customers, they may discontinue or reduce the use of our data centers in the future. Our financial condition, results of operations, cash flows and ability to satisfy our debt service obligations could be materially adversely affected as a result of any or all of these factors.

Our products and services have a long sales cycle that may harm our revenues and operating results.

A customer’s decision to license space in a Cyxtera Stockholder agreeddata center and to purchase additional services typically involves a significant commitment of resources. As a result, we have a long sales cycle for our products and services. Furthermore, we may expend significant time and resources in pursuing a particular sale or customer that ultimately does not result in revenue.

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Macroeconomic conditions, including economic and market downturns, may further impact this long sales cycle by making it extremely difficult for customers to transferaccurately forecast and plan future business activities. This could cause customers to slow spending or delay decision-making on our products and services, which would delay and lengthen our sales cycle.

Delays due to the length of our sales cycle may materially and adversely affect our revenues and operating results, which could harm our ability to meet our financial forecasts for a given quarter and cause volatility in our stock price.

We have significant customer concentration, with a limited number of customers accounting for a substantial portion of our revenues. Failure to attract, grow and retain a diverse and balanced customer base could harm our business and operating results.

For the year ended December 31, 2022, Lumen, our largest customer, accounted for 10% of revenue. As of December 31, 2022, our top 20 and top 50 largest customers (in each case, including Lumen) accounted for 42% and 56% of recurring revenue, respectively. While our customer contracts generally include committed terms of three years with early termination charges for termination prior to the end of such committed term, there are risks whenever a large percentage of total revenues are concentrated with a limited number of customers. It is not possible for us to predict the level of demand that will be generated by any equity securities of these customers in the future. In addition, revenues from these larger customers may fluctuate from time to time based on these customers’ business needs and customer experience, the timing of which may be affected by market conditions or other factors outside of our control. These customers could also potentially pressure us to reduce the prices we charge, which could have an adverse effect on our margins and financial position and could negatively affect our revenues and results of operations. If any of our largest customers terminates its relationship with us or materially reduces the services it acquires from us, such termination or reduction could negatively affect our revenues and results of operations.

Our ability to attract, grow and retain a diverse and balanced customer base, consisting of enterprises, cloud service providers and network service providers, may affect our ability to maximize our revenues. Dense and desirable customer concentrations within a facility enable us to better generate significant interconnection revenues, which in turn increases our overall revenues. Our ability to attract customers to our data centers depends on a variety of factors, including our product offerings, the presence of carriers, the overall mix of customers, the presence of key customers attracting business through ecosystems, the data center’s operating reliability and security and our ability to effectively market our product offerings. If we are unable to develop, provide or effectively execute any of these factors, we may fail to develop, grow and retain a diverse andbalanced customer base, which would adversely affect our business, financial condition and results of operations.

The successful operation of our business is highly dependent on third parties and any failure of our physical infrastructure or damage to customer infrastructure within our data centers could lead to significant costs and disruptions that could reduce our revenue and harm our business reputation and financial results.

Our business depends on providing customers with highly reliable solutions. We must safehouse our customers’ infrastructure and equipment located in our data centers and ensure that our data centers and offices remain operational at all times. While we own two of our data centers, we lease the remainder of our data centers and rely on our landlords for basic maintenance of our leased data centers. If a landlord fails to properly and adequately maintain such data center, we may be forced to exit that data center earlier than we would have otherwise, which could be disruptive to our business.

Problems at one or more of our data centers, whether or not within our control, could result in service interruptions or significant infrastructure or equipment damage. These could result from numerous factors, including:

human error;

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maintenance lapses and/or failures;

equipment failure;

availability of parts and materials needed to appropriately maintain our infrastructure;

cybersecurity incidents, including physical and electronic breaches;

fire, earthquake, hurricane, flood, tornado and other nature disasters;

extreme temperatures;

water damage;

fiber cuts;

power loss, water loss and or loss of other local utilities;

terrorist acts;

sabotage and vandalism; and

civil disorder.

We have service-level commitment obligations to our customers. As a result, service interruptions or significant equipment damage in our data centers could result in difficulty maintaining service-level commitments to these customers and potential claims related to such failures. Because our data centers are critical to many of our customers’ businesses, service interruptions or significant equipment damage in our data centers could also result in lost profits or other indirect or consequential damages to our customers. There can be no assurance that a court would enforce any contractual limitations on our liability in the event that one of our customers brings a lawsuit against us as a result of a problem at a Cyxtera data center. Furthermore, we may decide to reach settlements with affected customers irrespective of any such contractual limitations. Any such settlement may result in a reduction of revenue under generally accepted accounting principles in the United States of America (“US GAAP”). In addition, any loss of service, equipment damage or NewCo untilinability to meet our service-level commitment obligations could reduce the dateconfidence of our customers and could consequently impair our ability to obtain and retain customers, which would adversely affect both our ability to generate revenues and our operating results.

Furthermore, we are dependent upon major internet service providers, telecommunications carriers and other website operators in North America, Europe and Asia, some of which have experienced significant system failures and electrical outages in the Stockholder Support Agreement expires, exceptpast. Our customers may in the future experience difficulties due to system failures unrelated to our systems and offerings. If, for any reason, these providers fail to provide the required services, our business, financial condition and results of operations could be materially and adversely impacted.

Our business could be harmed by prolonged power outages, power and fuel shortages, capacity constraints and increases in power costs.

Our data centers are affected by problems accessing electricity sources, such as contemplatedplanned or unplanned power outages and limitations on transmission or distribution. Unplanned power outages, including, but not limited to, those relating to large storms, earthquakes, fires, tsunamis, cyberattacks and planned power outages by public utilities could harm our customers and our business. Some of our data centers are located in leased buildings where, depending upon the lease requirements and number of tenants involved, we may or may not control some or all of the infrastructure including generators and fuel tanks. As a result, in the event of a power outage, we may be dependent upon the landlord, as well as the utility company, to restore the power. We attempt to limit our exposure
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to system downtime by using backup generators and alternative power supplies, but these measures may not always prevent downtime, which can adversely affect customer experience and revenues.

In each of our markets, we rely on third parties to provide a sufficient amount of power for current and future customers. At the same time, power and cooling requirements are increasing per unit of equipment. As a result, some customers are consuming an increasing amount of power for the same amount of infrastructure. We generally do not control the amount of power our customers draw from their installed circuits, which can result in growth in the aggregate power consumption of our facilities beyond our original planning and expectations. This means that limitations on the capacity of our electrical delivery systems and equipment could limit customer utilization of our data centers. These limitations could have a negative impact on the effective available capacity of a given data center and limit our ability to grow our business, which could have a negative impact on our financial performance, operating results and cash flows. We attempt to limit our exposure to system downtime by using backup generators and alternative power supplies, but these measures may not always prevent downtime, which can adversely affect customer experience and revenues.

Recently, the cost of electricity has generally risen due to macroeconomic natural gas supply and demand constraints, initially beginning with inadequate natural gas reserves in Europe to meet European demand in light of sanctions on Russian natural gas supply as a result ofthe ongoing military conflict between Russia and Ukraine. In addition, we expect the cost of utilities, specifically electricity, will generally continue to increase in the future on a cost-per-unit or fixed basis and for growth in consumption of electricity by our customers. In addition, we expect the cost of utilities, specifically electricity, will generally continue to increase in the future on a cost-per-unit or fixed basis and for growth in consumption of electricity by our customers. Furthermore, the cost of electricity is generally higher in the summer months, as compared to other times of the year. Our costs of electricity may also increase as a result of the physical effects of climate change, increased regulations driving alternative electricity generation due to environmental considerations or as a result of our election to use renewable energy sources. To the extent we incur increased utility costs, such increased costs could materially impact our financial condition, results of operations and cash flows.

Our international operations expose us to regulatory, currency, legal, tax and other risks distinct from those we face in the United States.

Although our operations are primarily based in the United States, we also have a presence outside of the United States, in Europe and Asia. Foreign operations involve risks that are in addition to those risks generally associated with investments in the United States, including:

our limited knowledge of and relationships with customers, contractors, suppliers or other parties in these markets;

protectionist laws and business practices favoring local competition;

political and economic instability;

wars, such as the current military conflict between Russia and Ukraine;

complexity and costs associated with managing international operations;

difficulty in hiring qualified management, sales and other personnel and service providers in these markets;

differing employment practices and labor issues;

compliance with evolving governmental regulation with which we have limited experience;

compliance with economic and trade sanctions enforced by the Stockholder Support Agreement. Further,Office of Foreign Assets Control of the US Department of Treasury;

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compliance with data privacy and cybersecurity laws, rules and regulations applicable to our sponsorbusiness;

our ability to obtain, transfer or maintain licenses required by governmental entities with respect to our business;

unexpected changes in regulatory, tax and political environments;

exposure to increased taxation, confiscation or expropriation and the other holdersrisk of forced nationalization;

fluctuations in currency exchange rates;

currency transfer restrictions and limitations on our ability to distribute cash earned in foreign jurisdictions to the United States;

difficulty in enforcing agreements in non-US jurisdictions, including in the event of a default by one or more of our founder shares (togethercustomers, suppliers or contractors;

compliance with anti-bribery, corruption and export control laws;

difficulties in managing across cultures and in foreign languages; and

global pandemics or health emergencies, such as COVID-19.

Geopolitical events, such as the sponsor,ongoing military conflict between Russia and Ukraine and the “Insiders”ongoing COVID-19 pandemic may increase the likelihood of the risks above to occur and could have a negative effect on our business in the affected regions. In addition, compliance with international and US laws and regulations that apply to our international operations increases our cost of doing business in foreign jurisdictions. These laws and regulations include the General Data Protection Regulation (“GDPR”) entered intoand other data privacy laws and requirements, cybersecurity laws, labor relations laws, tax laws, anti-competition regulations, import and trade restrictions, export requirements, economic and trade sanctions, US laws such as the Foreign Corrupt Practices Act and local laws which also prohibit corrupt payments to governmental officials such as the UK Bribery Act and the Singapore Prevention of Corruption Act. We have several customers in China named in restrictive executive orders. If we are required to cease business with these companies, or additional companies in the future, our revenues could be adversely affected. Violations of any of these domestic or international laws and regulations could result in fines, criminal sanctions against us, our officers or our employees, and prohibitions on the conduct of our business. Any such violations could include prohibitions on our ability to make our offerings available in one or more countries and could also materially damage our reputation, brand, ability to attract and retain employees, business and results of operations.

Our inability to overcome these risks could adversely affect our foreign operations and growth prospects and could have a Sponsor Support Agreementmaterial adverse effect on our business, financial condition and results of operations.

If we are unable to recruit or retain key executives and qualified personnel, our business could be harmed.

Our business is substantially dependent on the performance of senior management and key personnel. We must also continue to identify, hire, train and retain key personnel who maintain relationships with SVACour customers and Cyxtera (the “Sponsor Support Agreement”), pursuantwho can provide the technical, strategic and marketing skills required for our growth. There is a shortage of qualified personnel in these fields, and we compete with other companies for the limited pool of talent. The failure to recruit and retain necessary key executives and personnel could cause disruption, harm our business and hamper our ability to grow the company.

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We may not be able to compete successfully against current and future competitors.

The global multi-tenant data center market is highly fragmented. We compete with a significant number of firms which among other things, each Insider agreedvary in terms of their data center offerings. We must continue to (i) vote allevolve our product strategy and be able to differentiate our data centers and product offerings from those of our competitors.

Our competitors may adopt aggressive pricing policies. As a result, we may suffer from pricing pressure that would adversely affect our ability to generate revenues. Some of our competitors may also provide customers with additional benefits, including bundled communication services or cloud services, and may do so in a manner that is more attractive to potential customers than obtaining space in our data centers. Similarly, with growing acceptance of cloud-based technologies, we are at risk of losing customers that may decide to fully leverage cloud infrastructure offerings instead of managing their own. Competitors could also operate more successfully or form alliances to acquire significant market share.

Failure to compete successfully may materially adversely affect our financial condition, cash flows and results of operations.

Our operating results may fluctuate.

We have experienced fluctuations in our results of operations on a quarterly and annual basis. The fluctuations in our operating results may cause the market price of our Class A common stock to be volatile. We may experience significant fluctuations in our operating results in the foreseeable future due to a variety of factors, including, but not limited to:

fluctuations of foreign currencies in the markets in which we operate that may impact the value of our foreign revenue and profitability;

demand for space, power and solutions at our data centers;

changes in general economic conditions, such as an economic downturn, or specific market conditions in the internet and data communications and broader technology industries, all of which may have an impact on our customer base;

the duration of the sales cycle for our offerings;

additions and changes in product offerings and our ability to ramp up and integrate new products;

the financial condition and credit risk of our customers;

the provision of customer discounts and credits;

the mix of current and proposed products and offerings and the gross margins associated with our products and offerings;

the timing required for future data centers to open or become fully utilized;

competition in the markets in which we operate;

conditions related to international operations;

increasing repair and maintenance expenses in connection with aging data centers;

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changes in rent expense and shared operating costs in connection with our leases, which are commonly referred to as common area maintenance expenses, as we amend, extend or renew our data center leases in the future;

the timing and magnitude of other operating expenses;

the cost and availability of adequate public utilities, including electricity;

implementation of our employee stock-based compensation practices as a newly public company and changes in employee stock-based compensation;

overall inflation;

increasing interest expense due to any increases in interest rates and/or potential additional debt financings;

changes in tax planning strategies or failure to realize anticipated benefits from such strategies; and

changes in income tax benefit or expense.

Any of the foregoing factors, or other factors discussed elsewhere in this Annual Report, could have a material adverse effect on our business, results of operations and financial condition. In addition, a relatively large portion of our expenses are fixed in the short term, particularly with respect to lease and personnel expenses, depreciation and amortization and interest expenses. Therefore, our results of operations are particularly sensitive to fluctuations in revenues. As such, comparisons to prior reporting periods should not be relied upon as indications of our future performance. In addition, our operating results in one or more future quarters may fail to meet the expectations of securities analysts or investors.

We have incurred substantial losses in the past and expect to incur additional losses in the future.

We had a net loss of $355.1 million for the year ended December 31, 2022, and had an accumulated deficit of $1,576.5 million as of December 31, 2022. We have never been profitable and do not expect to generate positive net income until at least 2030. However, our ability to achieve profitability is dependent upon many factors, including several that may be difficult to predict and/or control, such as continued bookings growth, stable customer churn, the ability to continue to apply contractual price escalators under our customer contracts, stability in energy pricing, management of personnel costs and stability in interest rates. We cannot provide any assurances that we will become profitable within this timeframe or at all.

We have incurred a goodwill impairment charge, and in the future could incur additional impairment charges, which could harm our profitability.

We have significant amounts of long-lived assets, goodwill and intangible assets. As of December 31, 2022, we had $1.0 billion of goodwill and identifiable intangible assets. We periodically review the carrying values of goodwill and intangible assets to determine whether such carrying values exceed their fair market values. Declines in the profitability of the Company, due to economic or market conditions or otherwise, as well as adverse changes in financial, competitive and other conditions, could adversely affect the values of our reporting units, resulting in an impairment of goodwill or intangible assets. In addition, adverse changes to the key valuation assumptions contributing to the fair value of our reporting units could result in an impairment of goodwill or intangible assets. In the fourth quarter of 2022, we recorded $153.6 million of goodwill and intangible asset impairment. For additional details, see Note 2—Summary Significant Accounting Policies in the notes to the audited consolidated financial statements for the year ended December 31, 2022, which is included in this Annual Report. Based on future economic and capital market conditions, as well as the operating performance of our reporting units, future impairment charges could be incurred, which could adversely affect our financial condition and operating results.

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We lease space in several locations under long-term non-cancellable lease agreements and the non-renewal or loss of such leases, or the continuing obligations under such leases in the event of a loss of customers or customer revenues, could have a material adverse effect on us.

We lease the space that houses our data centers in all but two of our locations. Our data center leases are typically long-term, non-cancellable leases. As of December 31, 2022, our data center leases have remaining lease terms of 1 year to 32 years. As of December 31, 2022, five of our leased facilities had a lease term expiring in less than five years, and an additional three leased facilities had lease terms expiring in less than 10 years.

Our landlords could attempt to evict us for reasons beyond our control. If we are forced to vacate any leased data center space, we will incur significant costs due to the high costs of relocating the equipment in these facilities and installing the necessary infrastructure in a new data center property. We may also lose customers that chose their services based on the location of the relevant data center. In addition, we cannot provide any assurance that we will be able to renew our data center leases on or prior to their expiration dates on favorable terms or at all. Certain of our landlords may view us as a competitor, which may impact their willingness to extend these leases beyond their contracted expiration dates. If we are unable to renew our lease agreements, we could lose a significant number of customers who are unwilling to relocate their equipment to another one of our data center properties, which could have a material adverse effect on us. Even if we are able to renew our lease agreements, the terms and other costs of renewal may be less favorable than our existing lease arrangements. Failure to sufficiently increase revenue from customers at these facilities to offset these potential higher costs could have a material adverse effect on us. Further, we may be unable to maintain good working relationships with our landlords, which would adversely affect our relationship with and potentially result in the loss of current customers. This would have a significant impact on our customer satisfaction and relationships and would greatly reduce our chances of not only retaining the revenue in question, but also any future business with those customers.

Our government customers, contracts and subcontracts may subject us to additional risks, including early termination, audits, investigations, sanctions and penalties, which could have a material adverse effect on us.

We derive revenue from contracts with state and local governments and subcontracts with government contractors that provide services to the US federal government and state and local governments. Some of these customers may be entitled to terminate all or part of their contracts at any time, without cause. These contracts are subject, directly or indirectly, to approval of appropriations to fund by lawmakers who may reduce or eliminate such appropriations.

Government contracts and subcontracts also are generally subject to government audits and investigations. To the extent we fail to comply with laws or regulations related to such contracts, any such audit or investigation of us could result in various civil and criminal penalties and administrative sanctions, including termination of such contracts, refund of a portion of fees received, forfeiture of profits, suspension of payments, fines and suspensions or debarment from future government business, any of which could have a material adverse effect on us.

Acquisitions present many risks, and we may not realize the financial or strategic goals that were contemplated at the time of any transaction.

We may make acquisitions in the future. Such acquisitions may include, without limitation, acquisitions of individual facilities in new geographic markets as well as acquisitions of individual facilities or larger platforms that would enhance our customer and service provider ecosystem. We may pay for future acquisitions by using our existing cash resources (which may limit other potential uses of cash), incurring additional debt (which may increase interest expense, leverage and debt service requirements) and/or issuing shares (which may dilute existing shareholders). We have a limited history of acquisitions, and there can be no assurance that we will be able to effectively and successfully complete acquisitions in the future. Acquisitions expose us to many potential risks, including risks relating to disruption of our business; diversion of management attention; our ability to properly identify and value suitable acquisition targets; our ability to identify and plan for all material risks and potential liabilities of any particular acquisition target; our ability to complete acquisitions for which we enter into a definitive acquisition agreement; litigation related to any potential acquisition; our ability to integrate the acquired business in
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a timely and efficient manner that does not disrupt the acquired business or our remaining business; and continuity of the acquired business and our key customer, landlord and/or supplier relationships. The occurrence of any of these risks could have a material adverse effect on our business, results of operations, financial condition or cash flows. If an acquisition does not proceed or is materially delayed for any reason, the price of our Class BA common stock ownedmay be adversely impacted, and we may not recognize the anticipated benefits of the acquisition.

If we cannot continue to develop, acquire, market and provide new offerings or enhanced offerings that meet customer requirements and differentiate us from competitors, our operating results could suffer.

We must remain flexible and evolve along with new technologies and industry and market shifts. In order to adapt effectively, we must sometimes make long-term investments, develop, acquire or obtain certain intellectual property and commit significant resources before knowing whether there will be adequate customer demand for our new offerings. If we misjudge customer needs in the future, our new offerings may not succeed, and our revenues and earnings may be harmed. Additionally, any delay in the development, acquisition, marketing or launch of a new offering could result in customer dissatisfaction or attrition. Ineffective planning and execution in our product development strategies may cause difficulty in sustaining our competitive advantages. If we cannot continue adapting our products, or if our competitors can adapt their products more quickly, our business could be harmed.

The process of developing new offerings and enhancing existing offerings is complex. Our research and software development teams have positioned us to do well to develop innovative new offerings and enhance existing offerings to meet our customers’ evolving IT strategies. However, there can be no assurance that we will be able to develop such offerings or enhancements in a timely and cost-effective manner or at all. If we cannot develop such offerings or enhancements in house, we may have to acquire technologies from third parties if available, which may require significant expenditures and may require us to compete against other data center providers, some of whom are significantly larger and have greater financial and other resources, to acquire such technologies.

Our customer contracts could subject us to significant liability, which may adversely affect our business, results of operations and financial condition.

In the ordinary course of business, we enter into agreements with our customers pursuant to which we provide them with data center space, power and connectivity products. These contracts typically contain indemnification and liability provisions, in addition to service-level commitments, which could potentially impose a significant cost on us in the event of losses arising out of certain breaches of such agreements, services to be provided by us or our subcontractors (if any) or from third-party claims. Customers increasingly are looking to pass through their regulatory obligations and other liabilities to their outsourced data center providers and we may not be able to limit our liability or damages in an event of loss suffered by such customers whether as a result of our breach of an agreement or otherwise. Further, liabilities and standards for damages and enforcement actions, including the regulatory framework applicable to different types of losses, vary by jurisdiction, and we may be subject to greater liability for certain losses in certain jurisdictions. If such an event of loss occurred, we could be liable for material monetary damages and could incur significant legal fees in defending against such an action, which could adversely affect our financial condition and results of operations.

Our ability to provide data center space to existing or new customers could be constrained by our ability to provide sufficient electrical power.

As current and future customers increase their power footprint in our data centers over time, the corresponding reduction in available power could limit our ability to increase occupancy rates or network density within our existing data centers. Furthermore, at certain of our data centers, our aggregate maximum contractual obligation to provide power and cooling to our customers may exceed the physical capacity at such data centers if customers were to quickly increase their demand for power and cooling. If we are not able to increase the available power and/or cooling or move the customer to another location within our data centers with sufficient power and cooling to meet such demand, we could lose the customer as well as be exposed to liability under our agreement with such customer. In addition, our power and cooling systems are difficult and expensive to upgrade. Accordingly, we may not be able to efficiently upgrade or change these systems to meet new demands without incurring
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significant costs that we may not be able to pass on to our customers. Any such material loss of customers, liability or additional costs could adversely affect our business, financial condition and results of operations.

Risks Related to Data Security, Intellectual Property and Technology Industry Regulations

We may not be able to adapt to changing technologies and customer requirements, and our data center infrastructure may become obsolete.

The technology industry generally and specific industries in which certain of our customers operate are characterized by rapidly changing technology, customer requirements and industry standards. New systems to deliver power to or eliminate heat in data centers or the development of new server technology that do not require the levels of critical load and heat removal that our facilities are designed to provide and could be run less expensively on a different platform could make our data center infrastructure obsolete. Our power and cooling systems are difficult and expensive to upgrade, and we may not be able to efficiently upgrade or change these systems to meet new demands without incurring significant costs that we may not be able to pass on to our customers which could adversely impact our business, financial condition and results of operations. In addition, the infrastructure that connects our data centers to the internet and other external networks may become insufficient, including with respect to latency, reliability and connectivity. We may not be able to adapt to changing technologies or meet customer demands for new processes or technologies in a timely and cost-effective manner, if at all, which would adversely impact our ability to sustain and grow our business.

Further, our inability to adapt to changing customer requirements may make our data centers obsolete or unmarketable to such customers. Some of our customers operate at significant scale across numerous data center facilities and have designed cloud and computing networks with redundancies and fail-over capabilities across these facilities, which enhances the resiliency of their networks and applications. As a result, these customers may realize cost benefits by locating their data center operations in facilities with less electrical or mechanical infrastructure redundancy than is found in our existing data center facilities. Additionally, some of our customers have begun to operate their data centers using a wider range of humidity levels and at temperatures that are higher than servers customarily have operated at in the past, all of which may result in energy cost savings for these customers. We may not be able to operate our existing data centers under these environmental conditions, particularly as our other customers may not be willing to operate under these conditions, and our data centers could be at a competitive disadvantage to facilities that satisfy such requirements. Because we may not be able to modify the redundancy levels or environmental systems of our existing data centers cost effectively, these or other changes our customer requirements could have a material adverse effect on our business, results of operations and financial condition.

Additionally, due to regulations that apply to our customers as well as industry standards that customers may deem desirable, such as ISO and SOC certifications, our customers may seek specific requirements from our data centers that we are unable to provide. If new or different regulations or standards are adopted or such extra requirements are demanded by our customers, we could lose some customers or be unable to attract new customers in certain industries, which could materially and adversely affect our operations.

We may be vulnerable to cybersecurity incidents, including physical and electronic breaches, which could disrupt our operations and have a material adverse effect on our financial performance and operating results.

We face risks associated with unauthorized access to our computer systems, denial of service, loss or destruction of data, computer viruses, malware or other malicious activities. A party who is able to compromise the security measures on our networks or the security of our infrastructure could, among other things, misappropriate our proprietary information and the personal information of our customers and employees, cause interruptions or malfunctions in our or our customers’ operations, cause delays or interruptions to our ability to meet customer needs, cause us to breach our legal, regulatory or contractual obligations, create an inability to access or rely upon critical business records or cause other disruptions to our operations. These incidents may result from human errors, equipment failure, or fraud or malice on the part of employees, third parties or malicious actors. As we increasingly market the security features in our data centers, we may be targeted by computer hackers seeking to compromise our
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data security.

We are committed to protecting against such threats. We expend financial resources to protect against physical and electronic breaches, and may be required to further expend financial resources to alleviate problems caused by such breaches. As techniques used to breach security are growing in frequency and sophistication and are generally not recognized until launched against a target, regardless of our expenditures and protection efforts, we may not be able to promptly detect that a breach has occurred, or implement security measures in a timely manner or, if and when implemented, we may not be able to determine the extent to which these measures could be circumvented. Any breaches that may occur could expose us to increased risk of regulatory penalties, loss of existing or potential future customers, damage relating to loss of proprietary information, harm to our reputation, increases in our security costs and lawsuits, which could have a material adverse effect on our financial performance and operating results. Any breaches could also delay or prevent us from maintaining security certifications that our customers rely on such as SOC-1, SOC-2 and ISO 27001. We maintain insurance coverage for cyber risks, but such coverage may be unavailable or insufficient to cover our losses. In the event of a cybersecurity incident resulting in loss of data, such as personally identifiable information or other such data protected by data privacy or other laws, we may be liable for damages, fines and penalties for such losses under applicable regulatory frameworks despite not handling the data. Furthermore, if a high-profile security breach or cyberattack occurs with respect to another provider of mission-critical data center facilities, our customers and potential customers may lose trust in the security of these business models generally, which could harm our reputation and brand image as well as our ability to retain existing customers or attract new ones. In addition, the regulatory framework around data custody, data privacy and breaches varies by jurisdiction and is an evolving area of law. We may not be able to limit our liability or damages in the event of such a loss.

We offer professional services to our customers where we assist with implementation and remote management. The access to our clients’ networks and data, which is gained from these services, creates risk that our clients’ networks or data will be improperly accessed. If we were held responsible for any such incident, it himcould result in significant loss, including damage to our client relationships, harm to our brand and reputation and legal liability.

We may not be able to protect our intellectual property rights.

We cannot make assurances that the steps we have taken to protect our intellectual property rights will be adequate to deter misappropriation of proprietary information or her (allthat we will be able to detect unauthorized use and take appropriate steps to enforce our intellectual property rights. We are also subject to the risk of litigation alleging infringement of third-party intellectual property rights. Any such claims could require us to spend significant sums in litigation, pay damages, develop non-infringing intellectual property or acquire licenses to the intellectual property that is the subject of the alleged infringement.

Government regulation may adversely affect our business.

Various laws and governmental regulations, both in the United States and in the other jurisdictions where we currently operate or may operate in the future, governing internet-related services, related communications services and information technologies remain largely unsettled, even in areas where there has been some legislative action. We remain focused on whether and how existing and changing laws, such as those governing intellectual property, privacy, libel, telecommunications services (including net neutrality laws), data flows/data localization, cybersecurity, carbon emissions impact and taxation apply to the internet and to related offerings such as our offerings, and substantial resources may be required to comply with regulations or bring any non-compliant business practices into compliance with such regulations. In addition, the continuing development of the market for online commerce and the displacement of traditional telephony service by the internet and related communications services may prompt an increased call for more stringent consumer protection laws or other regulation both in the United States and abroad that may impose additional burdens on companies conducting business online and their service providers. The adoption or modification of laws or regulations relating to the internet and our business, or interpretations of existing laws, could have a material adverse effect on our business, financial condition and results of operations.

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Risks Related to Environmental Laws and Climate Change Impacts

Environmental regulations may impose new or unexpected costs on us.

We are subject to various federal, state, local and international environmental and health and safety laws and regulations, including those relating to the generation, storage, handling and disposal of hazardous substances and wastes. Certain of these laws and regulations also impose joint and several liability, without regard to fault, for investigation and cleanup costs on current and former owners and operators of real property and persons who have disposed of or released hazardous substances into the environment. Our operations involve the use of hazardous substances and materials such as petroleum fuel for emergency generators, as well as batteries, refrigerants, cleaning solutions and other materials. In addition, we lease, own or operate real property at which hazardous substances and regulated materials have been used in the past. At some of our locations, hazardous substances or regulated materials are known to be present in soil or groundwater, and there may be additional unknown hazardous substances or regulated materials present at sites we lease, own or operate. At some of our locations, there are land use restrictions in place relating to earlier environmental cleanups that do not materially limit our use of the sites. To the extent any hazardous substances or any other substance or material must be cleaned up or removed from our property, we may be responsible under applicable laws, permits or leases for the removal or cleanup of such substances or materials, the cost of which could be substantial.

We purchase significant amounts of electricity from generating facilities and utility companies that are subject to environmental laws, regulations and permit requirements. Changes in laws and regulations, including those promulgated by the US Environmental Protection Agency which could limit air emissions from coal-fired power plants, restrict discharges of cooling water and otherwise impose new operational restraints on conventional power plants that could increase costs of electricity may be passed on to consumers, including us. Regulatory programs intended to promote increased generation of electricity from renewable sources may also increase our costs of procuring electricity. In addition, we are directly subject to environmental, health and safety laws regulating air emissions, storm water management and other issues arising in our business. For example, our emergency generators are subject to state and federal regulations governing air pollutants, which could limit the operation or preventative maintenance testing of those generators or require the installation of new pollution control technologies. Noncompliance with such laws, including as a result of unexpected events, equipment malfunctions or human error, could result in substantial administrative, civil and criminal penalties and injunctive obligations, and lead to additional capital requirements, limitations upon our operations and unexpected increased costs.

Additionally, at the international level, in December 2015, the United States and a coalition of international partners adopted the Paris Agreement at the United Nations Framework Convention on Climate Change (the “Paris Agreement”), which calls on the parties to undertake “ambitious efforts” to limit the average global temperature, and to conserve and enhance sinks and reservoirs of greenhouse gases. In 2021, the Biden administration announced a new Nationally Determined Contribution to the Paris Agreement which contained a new greenhouse gas (“GHG”) target for the United States calling on it to reduce net GHG emissions by 50%-52% below 2005 levels by 2030. Other countries have announced targeted reductions as well. Carbon pricing initiatives have been implemented or are under consideration in countries around the world, the largest being the European Union Emissions Trading Scheme covering all EU countries plus some others. The course of future legislation and regulation in the United States and abroad remains difficult to predict and the potential increased costs associated with GHG regulation or taxes cannot be estimated at this time.

State regulations also have the potential to increase our costs of obtaining electricity. The majority of states have released some version of a climate action plan or are revising or developing one. Certain states, like California, have issued or may enact environmental regulations that could materially affect our facilities and electricity costs. California has limited GHG emissions from new and existing conventional power plants by imposing regulatory caps and by auctioning the rights to emission allowances. Other states have issued regulations to implement similar carbon cap and trade program or are considering similar proposals to limit carbon emissions through cap-and-trade programs, carbon taxes, carbon pricing initiatives and other mechanisms. Some northeastern states adopted a multi-state program for limiting carbon emissions through the Regional Greenhouse Gas Initiative cap and trade program.
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State programs have not had a material adverse effect on our electricity costs to date, but due to the market-driven nature of some of the programs, they could have a material adverse effect on electricity costs in the future.

Aside from regulatory requirements, we have separately undertaken efforts to procure energy from renewable energy projects in order to support new renewables development. The costs of procuring such energy may exceed the costs of procuring electricity from existing sources, such as existing utilities or electric service provided through conventional grids. These efforts to support and enhance renewable electricity generation may increase our costs of electricity above those that would be incurred through procurement of conventional electricity from existing sources.

Our business may be adversely affected by climate change and responses to it.

Severe weather events, such as droughts, heat waves, fires, hurricanes and flooding, pose a threat to our data centers and our customers’ IT infrastructure through physical damage to facilities or equipment, power supply disruption and long-term effects on the cost of electricity. The frequency and intensity of severe weather events are reportedly increasing locally and regionally as part of broader climate changes and may cause the cost of operating expenses, like power, to increase over time. Global weather pattern changes may also pose long-term risks of physical impacts to our business.

We maintain disaster recovery and business continuity plans that have been and would be implemented in the event of severe weather events that interrupt our business or affect our customers’ IT infrastructure. While these plans are designed to allow us to recover from natural disasters or other events that can interrupt our business, we cannot be certain that our plans will protect our or our customers from all such disasters or events. Failure to prevent impact to customers from such events could adversely affect our business.

We face pressures from our customers, who are increasingly focused on climate change, to prioritize sustainable energy practices, reduce our carbon footprint and promote sustainability. To address these concerns, we pursue opportunities to improve energy efficiency and implement energy-saving retrofits. It is possible, however, that our customers and investors might not be satisfied with our sustainability efforts or the speed of their adoption. If we do not meet our customers’ or shareholders’ expectations, our business and/or share price could be harmed.

Concern about climate change in various jurisdictions may result in more stringent laws and regulatory requirements regarding emissions of carbon dioxide or other GHGs. For example, the European Union Commission recently published a digital strategy that announced an intent to enact initiatives to achieve climate-neutral, highly energy-efficient and sustainable data centers by no later than 2030. Restrictions on carbon dioxide or other GHG emissions could result in significant increases in operating or capital costs, including higher energy costs generally, and increased costs from carbon taxes, emission cap and trade programs and renewable portfolio standards that are imposed upon our electricity suppliers. These higher energy costs, and the cost of complying across our global platform, or of failing to comply with these and other climate change regulations, may have an adverse effect on our business and results of operations.

We are subject to risks related to corporate social responsibility.

The growing integration of ESG factors in making investment decisions is relatively new, and frameworks and methods used by investors for assessing ESG policies are not fully developed and vary considerably among the investment community. While we have enacted various policies and practices to address ESG matters, we do not currently report on our ESG policies and practices to the same degree as some of our competitors. As a result, we may not be adequately recognized for our current ESG efforts and there may be a perception held by the general public, our governmental partners, vendors, suppliers, other stakeholders or the communities in which we do business that our policies and procedures are insufficient.

We expect to continue to evolve and expand our ESG reporting in the future. However, by electing to set and publicly share these ESG standards, we may also face increased scrutiny related to our ESG activities. As a result, our reputation could be harmed if we fail to act responsibly in the areas in which we choose to report. Any
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harm to our reputation resulting from setting these standards or our failure or perceived failure to meet such standards could impact employee retention; the willingness of our governmental partners, vendors and suppliers to do business with us; investors’ willingness or ability to purchase or hold our securities; or our ability to access capital, any of which could adversely affect our business, financial performance and growth.

Risks Related to Regulatory Compliance and Laws including Tax Laws

The requirements of being a public company, including maintaining adequate internal control over our financial and management systems, may strain our resources, divert management’s attention and affect our ability to attract and retain executive management and qualified board members.

We became a public company following the Business Combination. As a result, we have incurred, and will continue to incur, significant legal, accounting and other expenses that we did not incur as a private company. We are subject to the reporting requirements of the Exchange Act, and are required to comply with the applicable requirements of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”) and the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as the rules and regulations subsequently implemented by the SEC and the listing standards of The Nasdaq Stock Market, LLC (the “Nasdaq”), including changes in corporate governance practices and the establishment and maintenance of effective disclosure and financial controls. Compliance with these rules and regulations can be burdensome. Our management and other personnel need to devote a substantial amount of time to these compliance initiatives.

We have hired and may need to continue to hire additional accounting and financial staff, and engage outside consultants, all with appropriate public company experience and technical accounting knowledge and maintain an internal audit function, which will increase our operating expenses. Moreover, we could incur additional compensation costs in the event that we decide to pay cash compensation closer to that of other publicly listed companies, which would increase our general and administrative expenses and could materially and adversely affect our profitability. We are evaluating these rules and regulations and cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.

We were previously not subject to Section 404 of the Sarbanes-Oxley Act. The standards required for a public company under Section 404(a) of the Sarbanes-Oxley Act are significantly more stringent than those required of Legacy Cyxtera as a privately held company. Our most recent evaluation of our controls resulted in our conclusion that, as of December 31, 2022, in compliance with Section 404(a) of the Sarbanes-Oxley Act of 2002, our internal controls over financial reporting were effective. If, however, in the future, our internal controls over financial reporting are found to be ineffective, or if a material weakness is identified in our controls over financial reporting, our financial results may be adversely affected. Investors may also lose confidence in the reliability of our financial statements which could adversely affect our stock price.

US and non-US tax legislation and future changes to applicable US or non-US tax laws and regulations and/or their interpretation may have an adverse effect on our business, financial condition and results of operations. Tax rules and regulations are subject to interpretation and require judgment by us that may be successfully challenged by the applicable taxation authorities upon audit, which could result in additional tax liabilities.

We are subject to tax laws in the United States and each other jurisdiction where we do business, including Australia, Canada, Germany, Hong Kong, Japan, the Netherlands, Singapore and the United Kingdom, where a number of our subsidiaries are organized. Changes in tax laws or their interpretation could decrease the amount of revenues we receive, the value of any tax loss carry-forwards and tax credits recorded on our balance sheet and the amount of our cash flow, and adversely affect our business, financial condition or results of operations. In addition, other factors or events, including business combinations and investment transactions, changes in the valuation of our deferred tax assets and liabilities, adjustments to taxes upon finalization of various tax returns or as a result of deficiencies asserted by taxing authorities, increases in expenses not deductible for tax purposes, changes in available tax credits, other changes in the apportionment of our income and other activities among tax jurisdictions, and changes in tax rates, could also increase our future effective tax rate.

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In addition, our effective tax rate and tax liability are based on the application of current income tax laws, regulations, treaties and mix of income in the taxing jurisdictions in which we operate. These laws, regulations and treaties are complex, and the manner which they apply to us and our diverse set of business arrangements is often open to interpretation, and can require us to take positions regarding the interpretation of applicable rules or the valuation of our assets that are subject to material uncertainty. Significant management judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets. The tax authorities could challenge our interpretation of laws, regulations and treaties or the positions that it has taken regarding the valuation of our assets, resulting in additional tax liability or adjustment to our income tax provision that could increase our effective tax rate.

Our tax filings are subject to review or audit by the US Internal Revenue Service (the “IRS”) and state, local and non-US taxing authorities. As discussed above, we exercise significant judgment in determining our worldwide provision for taxes and, in the ordinary course of our business, there may be transactions and calculations where the proper tax treatment is uncertain. We may also be liable for taxes in connection with businesses we acquire. Our determinations are not binding on the IRS or any other taxing authorities, and accordingly the final determination in an audit or other proceeding may be materially different than the treatment reflected in our tax provisions, accruals and returns. An assessment of additional taxes because of an audit could have a material adverse effect on our business, financial condition, results of operations and cash flows.

New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time, or interpreted, changed, modified or applied adversely to us, any of which could adversely affect our business operations and financial performance. We are unable to predict what changes will occur and, if so, the ultimate impact on our business. To the extent that such changes have a negative impact on us, they may materially and adversely impact our business, financial condition, results of operations and cash flows. For purposes of the foregoing, reference to us shall include references to us and our subsidiaries.

Our NOLs may not be available to offset future taxable income in the United States.

As of December 31, 2022, we had gross NOLs of $300.8 million for U.S. federal income tax purposes, $440.9 million for state and local income tax purposes, and $20.4 million for foreign income tax purposes. Subject to expiration or other uses or limitations, these NOLs may be available to offset our future US taxable income, if any. However, as of the date hereof, we have not had any history of prior positive earnings. Further, certain of these NOLs, which are available and could potentially be utilized to offset tax that would otherwise be owed in respect of prior taxable corporate actions (including any incremental tax that might otherwise be owed as a result of an audit adjustment), if any, will begin to expire at various dates through 2042. In addition, under Section 382 of the Code, if a corporation undergoes an “ownership change” (very generally defined as a greater than 50% change, by value, in the corporation’s equity ownership by certain shareholders or groups of shareholders over a rolling three-year period), the corporation’s ability to utilize its pre-change NOLs to offset future taxable income is limited. Future changes in our stock ownership, some of which might be beyond our control, could result in an ownership change under Section 382 of the Code. Future regulatory changes could also limit our ability to utilize our NOLs. In addition, utilization of NOLs in the United States generated in tax years beginning after December 31, 2017 are limited to a maximum of 80% of the taxable income for such year determined without regard to the NOL deduction. To the extent our NOLs expire, are utilized to offset tax that would otherwise be owed as a result of prior corporate actions, are restricted or are otherwise not available to offset future taxable income with NOLs, our cash flows and results of operations may be adversely affected. For purposes of the foregoing, references to us shall include references to us and our subsidiaries.

Risks Related to Our Proposed REIT Conversion

Although we have chosen to pursue conversion to a REIT, we may not be successful in converting to a REIT by January 1, 2024, or at all.

On September 13, 2022, our board of directors unanimously approved Cyxtera’s conversion to a REIT under the Code, with a target to complete the conversion by January 1, 2023. Subsequently, on November 16, 2022,
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our board of directors determined to target completion of our conversion to a REIT for federal income tax purposes by January 1, 2024 instead of January 1, 2023. There are significant implementation and operational complexities to address before we can convert to a REIT, including, without limitation, completing internal reorganizations, modifying accounting and information technology systems, and receiving any necessary shareholder and other approvals. Even if we are able to satisfy the existing REIT requirements or any future REIT requirements, the tax laws, regulations and interpretations governing REITs may change at any time in ways that could be disadvantageous to us.

Additionally, several conditions must be met in order to complete the conversion to a REIT, and the timing and outcome of many of these conditions are beyond our control. Even if the transactions necessary to implement REIT conversion are effected, our board of directors may decide not to elect REIT status, or to delay such election, if it determines in its sole discretion that it is not in the best interests of us or our shareholders. We can provide no assurance if or when conversion to a REIT will be successful. Furthermore, the effective date of the REIT conversion could be delayed beyond January 1, 2024, in which event we could not elect REIT status until the taxable year beginning January 1, 2025, at the earliest.

Risks Related to Our Class A Common Stock

Our stock price has recently been volatile, and as a result investors in our Class A common stock could lose some or all of their investment.

Our stock price has been recently volatile. For an example, on May 31, 2022, the price of our stock closed at $14.82 per share while on December 27, 2022 our stock closed at $1.57 per share. We may experience rapid and substantial increases or decreases in our stock price in the foreseeable future that may or may not coincide in timing with the disclosure of news or developments by us. The stock market in general has experienced heightened volatility related to inflation, increased interest rates and other macroeconomic factors. As a result of this volatility, investors may experience losses on their investments in our Class A common stock. The market price for our Class A common stock may be influenced by many factors, including the following:

our ability to refinance our long-term existing debt;

variations in our financial results or those of companies that are perceived to be similar to us;

announcements related to delay in the REIT conversion;

announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us, our strategic collaboration partners or our competitors;

trading volume of our Class A common stock;

the impact of inflation and rising interest rates and its effect on us;

the impact of the ongoing Russian - Ukraine conflict and its effect on us;

the impact of the ongoing COVID-19 pandemic and its effect on us;

our ability or inability to raise additional capital and the terms on which we raise it;

sales of our Class A common stock by us or our shareholders;

declines in the market prices of stocks generally or of companies that are perceived to be similar to us; and

general economic, industry and market conditions.
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If securities analysts issue unfavorable commentary about us or our industry or downgrade our Class A common stock, the “Covered Shares”)price of our Class A common stock could decline.

The trading market for our Class A common stock depends, in favorpart, on the research and reports that third-party securities analysts publish about us and the industries in which we operate. If any analyst that may cover us ceases covering us or fails to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price or trading volume of our Class A common stock to decline. Moreover, if one or more of the transactions contemplated by the Merger Agreement, including the mergers, and each other proposal related thereto included on the agenda for the special meeting of stockholders related thereto and (ii) not redeem, or seek to redeem, any Covered Shares owned by it, him or her in connection with the stockholder approval of the Cyxtera Business Combination. In addition, each Insider agreed, subject to certain exceptions, not to transfer, as applicable, any shares ofanalysts who cover us change their recommendation regarding our Class BA common stock private placement warrants (oradversely or provide more favorable relative recommendations about our competitors or if our reporting results do not meet analysts’ expectations, the market price of our Class A common stock could decline.

Our issuance of additional shares of Class A common stock issued or issuable uponconvertible securities may dilute your ownership interest in us and could adversely affect our stock price.

From time to time in the exercise of private placement warrants) or other equity securities of SVAC until the date upon which the Sponsor Support Agreement expires. Solely in connection with and only for the purpose of the transactions contemplated by the Merger Agreement, each Insider irrevocably and unconditionally waived and agreed not to assert, claim or perfect any rights to adjustment or other anti-dilution protection with respect to the rate that thefuture, we may issue additional shares of our Class BA common stock held by him, her or it convertssecurities convertible into Class A common stock pursuant to Section 4.3a variety of transactions, including acquisitions. Additional shares of our amendedClass A common stock may also be issued upon exercise of outstanding stock options. The issuance by us of additional shares of our Class A common stock or securities convertible into our Class A common stock would dilute your ownership interest in us and restated certicfiatethe sale of incorporation a significant amount of such shares in the public market could adversely affect prevailing market prices of our Class A common stock. Subject to the satisfaction of vesting conditions, shares issuable upon exercise of options and upon settlement of restricted stock unit and/or any other anti-dilution protectionsperformance stock unit awards will be available for resale immediately in the public market without restriction.

In the future, we expect to obtain financing or to further increase our capital resources by issuing additional shares of our capital stock or offering debt or other adjustmentequity securities, including senior or similar protections that arisesubordinated notes, debt securities convertible into equity, or shares of preferred stock. Issuing additional shares of our capital stock, other equity securities, or securities convertible into equity may dilute the economic and voting rights of our existing shareholders and reduce the market price of our Class A common stock. Debt securities convertible into equity could be subject to adjustments in connection with the Cyxtera Business Combination.


In addition, Cyxtera and the forward purchasers entered into a letter agreement related to the optional share purchase agreement (as defined below),conversion ratio pursuant to which letter agreementcertain events may increase the forward purchasers agreed notnumber of equity securities issuable upon conversion. Preferred stock, if issued, could have a preference with respect to purchase optional shares (as defined below) in an aggregate amount exceeding $75,000,000 for all forward purchasers.

In connectionliquidating distributions or a preference with respect to dividend payments that could limit our ability to pay dividends to the Merger Agreement, we entered into separate subscription agreements, dated February 21, 2021, with certain investors, pursuant to which we have agreedholders of our Class A common stock. Our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, which may adversely affect the amount, timing or nature of our future offerings. As a result, holders of our Class A common stock bear the risk that our future offerings may reduce the market price of our Class A common stock and dilute their percentage ownership.


Future sales, or the perception of future sales, of our Class A common stock by us or our existing securityholders in the public market could cause the market price for our Class A common stock to decline.

The sale of substantial amounts of shares of our Class A common stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of shares of our Class A common stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in private placementsthe future at a time and at a price that we deem appropriate.

Affiliates of BC Partners, Medina Capital and Starboard Value LP hold shares of our Class A common stock eligible for resale, subject to, close immediately priorin the case of certain shareholders, volume, manner of sale and other limitations under Rule 144.

If the holders of these shares sell them or are perceived by the market as intending to sell them, the closingmarket price of the Cyxtera Business Combination, an aggregateshares of 25,000,000our Class A common stock could drop significantly. These factors could also make it more difficult for us to raise additional funds through future offerings of our shares of Class A common stock for a purchaseor other securities.

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Anti-takeover provisions in our governing documents and under Delaware law could make an acquisition of us more difficult, limit attempts by our shareholders to replace or remove our current management and limit the market price of $10.00 per shareour Class A common stock.

Our certificate of incorporation, our bylaws and Delaware law each contain provisions that could have the effect of rendering more difficult, delaying or preventing an aggregate purchase priceacquisition deemed undesirable by our board of $250,000,000 (the “PIPE Shares”),directors. Among other things, our certificate of incorporation and/or our bylaws include the following provisions:

limitations on convening special shareholder meetings, which make it difficult for our shareholders to adopt desired governance changes;

a forum selection clause, which means certain litigation against us can only be brought in Delaware;

the authorization of undesignated preferred stock, the terms of which certain clients of Starboard have committed to purchase, on the same terms as the other subscribers, an aggregate of 6,000,000may be established and shares of which may be issued without further action by our shareholders; and

advance notice procedures, which apply for shareholders to nominate candidates for election as directors or to bring matters before an annual meeting of shareholders.

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management. As a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the Delaware General Corporation Law (the “DGCL”), which prevents interested shareholders, such as certain shareholders holding more than 15% of our outstanding shares of our Class A common stock, for a purchase pricefrom engaging in certain business combinations unless (i) prior to the time such shareholder became an interested shareholder, the board of $10.00 per share anddirectors approved the transaction that resulted in such shareholder becoming an aggregate purchase price of $60,000,000.

The Merger Agreement and related agreements are further described in the Current Report on Form 8-K filed by us on February 22, 2021. For additional information regarding Cyxtera, the Merger Agreement and the Cyxtera Business Combination, see the proxy statement to be filed by us.

Other than as specifically discussed, this Annual Report does not assume the closinginterested shareholder, (ii) upon consummation of the Cyxtera Business Combination.

Business Strategy

Our business strategy is to identify and complete our initial business combination with a companytransaction that can benefit fromresulted in such shareholder becoming an interested shareholder, the strategic and transactional experienceinterested shareholder owned at least 85% of Starboard, our management and our Industry Advisors to catalyze and transform the company and create stockholder value. We believe our sponsor, management team, Industry Advisors, and independent directors have access to a wide range of opportunities due to their extensive network of relationships with management teams of public and private companies, private equity sponsors, other public investors, investment bankers, lenders, restructuring advisers, attorneys, accountants, and other consultants and intermediaries. We have chosen Industry Advisors with specific experience in a broad range of industry sectors, including technology, healthcare, consumer, industrials and the hospitality & entertainment sectors because we believe that examining acquisition opportunities across all of these sectors increases the likelihood of finding an acquisition target that will lead to stockholder value creation.

Over the last 18 years, Starboard’s investment team has developed extensive experience working with management teams of public companies, across market capitalizations and industries, in order to unlock stockholder value. Over the past 18 years, Starboard’s team has been actively involved with more than 120 public companies and has developed an extensive network of operators and advisors with whom it works. Starboard has built a strong reputation and following in the public markets, attracting significant fundamental investor interest in the companies in which it invests. Starboard typically focuses on investment opportunities in public companies in need of transformation and looks to work with those companies to effect such transformations through operational improvements, changes in strategic focus, improved execution, enhanced corporate governance and oversight, and/or by providing strategic capital. We believe this track record of public company value creation and Starboard’s practices in partnering with companies and their stockholders to effect change are relevant capabilities for private companies seeking a public listing, and present a compelling value proposition for such potential target businesses. Our management team and Starboard have experience in:

Sourcing, structuring, acquiring, integrating and selling businesses;

Fostering relationships with sellers, capital providers and target leadership teams;

Negotiating transactions favorable to investors; and


Accessing the capital markets, including financing businesses and helping companies transition to public ownership.

In addition, our Industry Advisors have been successful chief executive officers, senior executives, and board members of public and private companies, and we believe they will enhance our value proposition to potential business combination partners given their collective expertise, operational and strategic capabilities, and track record in their respective sectors. Our Industry Advisors have experience in:

Operating companies, setting and changing strategies and capital allocation, and identifying, monitoring and recruiting world-class talent;

Acquiring and integrating companies;

Embarking on corporate turnarounds and implementing transformational long-term strategies; and

Developing and growing companies, both organically and through acquisitions and strategic transactions and expanding the product range and geographic footprint of businesses.

We believe that our management team’s and Industry Advisors’ track record of identifying and sourcing transactions positions us well to appropriately evaluate potential business combinations and select one that will be well received by the public markets. Additionally, we believe that Starboard’s extensive experience investing in and serving on the boards of companies that are undergoing strategic and/or operational transformations further increases the chances of successfully identifying a quality business where we can employ our practices to improve performance and valuation while it undergoes strategic and/or operational changes. Our sourcing process leverages the extensive networks of our Industry Advisors. We deploy a proactive sourcing strategy and focus on companies where we believe the combination of our management team’s and Industry Advisors’ operating experience, relationships, capital and capital markets expertise can be catalysts to transform a target company and create value for our stockholders. Since the completion of our IPO, members of our management team, Starboard and the Industry Advisors have actively been searching for a target business by communicating with their network of relationships and other interested parties.

Acquisition Criteria

We believe we have the opportunity to pursue a differentiated set of potential acquisition targets due to our management team’s, Starboard’s and the Industry Advisors’ experience in driving transformative change in businesses in order to create value for stockholders. Consistent with our business strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective target businesses and set us apart from other sources of capital pursuing target businesses in our areas of focus. We use these criteria and guidelines in evaluating acquisition opportunities, but we may decide to enter into our initial business combination with a target business that does not meet these criteria and guidelines. We seek to acquire companies that we believe:

Are prepared to be public companies and will benefit from having a public currency in order to enhance their ability to pursue accretive acquisitions, high-return capital projects, and/or strengthen their balance sheet.

Are good businesses that are underperforming their potential in industries that are otherwise exhibiting stable or improving fundamentals. We evaluate each industry and the target businesses within those industries based on several factors, including the potential for sustainable competitive advantages, the ability to drive meaningful operational improvements, the ability to generate attractive risk-adjusted returns, and the sustainability of cash flow. We seek targets that will be compatible with our rigorous value creation process, whereby we identify several value enhancing initiatives prior to making the acquisition and define processes to implement and optimize those initiatives.

Have a defensible market position with demonstrated advantages compared to competitors that create barriers to entry against new potential market entrants.


Are at an inflection point, such as those requiring additional management expertise, are able to innovate by developing new products or services, or are situations in which we believe we can drive improved financial performance.

Have significant embedded and/or underexploited expansion opportunities. This can be accomplished through a combination of accelerating organic growth and finding attractive bolt-on acquisition targets. Our management team and Industry Advisors have significant experience in identifying such targets and helping target management assess the strategic and financial fit of potential bolt-on acquisitions. Similarly, we believe our management team and Industry Advisors have the expertise to assess the likely synergies between target companies and help a target effectively integrate acquisitions.

Exhibit unrecognized value or other characteristics that we believe represent upside in the public markets based on our company-specific analysis and due diligence review. For a potential target company, this process includes, among other things, a review and analysis of the company’s capital structure, quality of earnings, potential for operational improvements, corporate governance, customers, materials contracts, and industry background and trends.

Have strong, experienced management teams, or provide a platform to assemble an effective management team with a track record of driving growth, profitability, and value creation.

Will offer attractive risk-adjusted equity returns for our stockholders. We seek to acquire a target on terms and in a manner that leverages our experience in transformational investing. Financial returns are evaluated based on (i) the potential for organic growth in cash flows, (ii) the ability to achieve cost savings, (iii) the ability to accelerate growth, including through the opportunity for follow-on acquisitions, and (iv) the prospects for creating value through other value creation initiatives. Potential upside from growth in the target business’ earnings and an improved capital structure is weighed against any identified downside risks.

These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our stockholder communications related to our initial business combination, which would be in the form of proxy solicitation materials or tender offer documents that we would file with the Securities and Exchange Commission (the “SEC”).

In addition to any potential business candidates we may identify on our own, we anticipate that other target business candidates will be brought to our attention from various unaffiliated sources, including investment market participants, private equity funds, and large business enterprises seeking to divest non-core assets or divisions.

Acquisition Process

In evaluating a prospective target business, we conduct an extensive due diligence review which encompasses, as applicable and among other things, commercial and industry due diligence, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection of facilities, and a review of financial and other information about the target and its industry. To help facilitate this evaluation, we rely on input from our management team, Industry Advisors and third-party due diligence providers. We also leverage the operational and capital allocation planning experience of Starboard, our management team, and our Industry Advisors.

We are not prohibited from pursuing our initial business combination with a business combination target that is affiliated with our sponsor, our directors, or our officers or from making the acquisition through a joint venture or other form of shared ownership with our sponsor, our directors, officers or their affiliates. In the event we seek to complete our initial business combination with a business combination target that is affiliated with our sponsor, our directors or officers, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm which is a member of Financial Industry Regulatory Authority, Inc. (“FINRA”) or an independent accounting firm that such an initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.


In addition, we believe our ability to complete our initial business combination will be enhanced by the forward purchase agreement pursuant to which the forward purchasers will purchase forward purchase shares for an aggregate amount of up to $100,000,000 in a private placement that will close simultaneously with the closing of our initial business combination. These purchases are intended to satisfy the Redemption Obligation and thereby provide us with a minimum funding level for our initial business combination.

Further, our distributable redeemable warrants provide our public stockholders with an incentive not to redeem their shares of Class A common stock in connection withor (iii) following board approval, such business combination receives the approval of the holders of at least two-thirds of our initial business combination. Holders who choose to redeem their shares will lose the right to receive any distributable redeemable warrants. Public stockholders who choose not to redeem their shares ofoutstanding Class A common stock will sharenot held by such interested shareholder at an annual or special meeting of shareholders.


Any provision of our certificate of incorporation, our bylaws or Delaware law that has the effect of delaying, preventing or deterring a change in control could limit the distributionopportunity for our shareholders to receive a premium for their shares of 6,737,242 warrants with other non-redeeming holders, and, to the extent public stockholders exercise their right to redeem theirour Class A common stock in connection withand could also affect the initial business combination, with the holders of the forward purchase shares (as described in this Annual Report), and will receive a portion of the additional warrantsprice that were effectively surrendered by redeeming holders. As a result, public stockholders who do not redeem their shares will receive at least one-sixth of a distributable redeemable warrant per share they hold, and a greater amount if other holders electsome investors are willing to redeem. pay for our Class A common stock.

We believe this structure will likely lead to a lower level of redemptions.

Certain of our directors and officers own founder shares and, accordingly, may have a conflict of interest in determining whether a particular target business isare an appropriate business with which to effectuate our initial business combination. Further, such directors and officers may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such directors and officers was included by a target business as a condition to any agreement with respect to our initial business combination.

Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations or duties to one or more other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entities. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for one or more entities to which he or she has fiduciary, contractual or other obligations or duties, he or she will honor these obligations and duties to present such business combination opportunity to such entities first, and only present it to us if such entities reject the opportunity and he or she determines to present the opportunity to us. However, we do not expect these duties to present a significant conflict of interest with our search for an initial business combination. We believe this conflict of interest with respect to our officers and directors affiliated with Starboard is mitigated, to a certain extent, by the differing nature of the investments Starboard typically considers most attractive for its clients“emerging growth company” and the types of acquisitions we expect Starboard Value Acquisition Corp.reduced disclosure requirements applicable to find most attractive.

No members ofemerging growth companies may make our management team have any obligationClass A common stock less attractive to present us with any opportunity for a potential business combination of which they become aware, unless presented to such member specifically in his or her capacity as an officer or director of the company and after they have satisfied their contractual and fiduciary obligations to other parties. Any knowledge or presentation of such opportunities may therefore present conflicts of interest.

Our amended and restated certificate of incorporation provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation.

In addition, none of our Industry Advisors are officers or directors of our company and therefore owe us no fiduciary duties as such. While we expect that they will continue to assist us in identifying business combination targets, they have no obligation to do so and may devote a substantial portion of their business time to activities unrelated to us. Our Industry Advisors may have fiduciary, contractual or other obligations or duties to other organizations to present business combination opportunities to such other organizations rather than to us. Accordingly, if any Industry Advisor becomes aware of a business combination opportunity which is suitable for one or more entities to which he has fiduciary, contractual or other obligations or duties, he or she will honor those obligations and duties to present such business combination opportunity to such entities first and only present it to us if such entities reject the opportunity and he determines to present the opportunity to us.

investors.


Initial Business Combination

As required by the rules of The Nasdaq Stock Market LLC (“Nasdaq”), our initial business combination will be approved by a majority of our independent directors. So long as we obtain and maintain a listing for our securities on Nasdaq, our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the value of the trust account (excluding any deferred underwriting discount and taxes payable on the income earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination. If our securities are no longer listed on Nasdaq, we will not be obligated to satisfy such 80% test. If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm which is a member of FINRA or a valuation or appraisal firm with respect to the satisfaction of such criteria. While we consider it unlikely that our board will not be able to make an independent determination of the fair market value of a target business or businesses, it may be unable to do so if the board is less familiar or experienced with the target company’s business, there is a significant amount of uncertainty as to the value of the company’s assets or prospects, including if such company is at an early stage of development, operations or growth, or if the anticipated transaction involves a complex financial analysis or other specialized skills and the board determines that outside expertise would be helpful or necessary in conducting such analysis. Since any opinion, if obtained, would merely state that the fair market value of the target business meets the 80% threshold, unless such opinion includes material information regarding the valuation of a target business or the consideration to be provided, it is not anticipated that copies of such opinion would be distributed to our stockholders. However, if required under applicable law, any proxy statement that we deliver to stockholders and file with the SEC in connection with a proposed transaction will include such opinion.

We anticipate structuring our initial business combination so that the post-transaction company in which our public stockholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business for the post-acquisition company to meet certain objectives of the target management team or stockholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires an interest in the target or assets sufficient for it not to be required to register as an investment company under the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to the business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% test. If the business combination involves more than one target business, the 80% test will be based on the aggregate value of all of the target businesses and we will treat the target businesses together as the initial business combination for the purposes of a tender offer or for seeking stockholder approval, as applicable.


Corporate Information

We are 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, as amended (the “JOBS Act”). As such,an emerging growth company, we may follow reduced disclosure requirements and do not have to make all of the disclosures that public companies that are not emerging growth companies do. We will remain an emerging growth company until the earlier of (a) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more; (b) the last day of the fiscal year following the fifth anniversary of the date of the completion of the initial public offering of SVAC (the “IPO”); (c) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (d) the date on which we are eligibledeemed to take advantagebe a large accelerated filer under the rules of certainthe SEC, which requires, among other things, that the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the prior June 30th. For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions from various reportingcertain disclosure requirements that are applicable to other public companies that are not “emergingemerging growth companies,” including, but not limited to, companies. These exemptions include:


not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”)Act;
32



not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);

reduced disclosure obligations regarding executive compensation in our periodic reports, and proxy statements and registration statements; and

exemptions from the requirements of holding a non-bindingnonbinding advisory vote of shareholders on executive compensation, and stockholdershareholder 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 securitiesapproved and having to disclose the pricesratio of the compensation of our securities may be more volatile.

chief executive officer to the median compensation of our employees.


In addition, Section 107 of the JOBS Act also provides that an “emergingemerging growth company”company can take advantage of thean 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,This allows an “emergingemerging growth company” cancompany to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intendhave elected to use the extended transition period for complying with new or revised accounting standards; and as a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.

We may choose to take advantage of some, but not all, of the benefits of this extended transition period.

We will remain anavailable exemptions for emerging growth company until the earlier of  (1) the last day of the fiscal year (a) following September 14, 2025, the fifth anniversary of our IPO, (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 ofcompanies. We cannot predict whether investors will find our Class A common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the dateless attractive if we rely 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.

Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value ofthese exemptions. If some investors find our common stock held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter.

Financial Position

With funds available for a business combination in the amount of $386,212,762 as of December 31, 2020, assuming no redemptions and after payment of  $18,190,554 of deferred underwriting fees, but before fees and expenses associated with our initial business combination, and the funds, if any, from the issuance of our forward purchase shares and optional shares, we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt ratio. Because we are able to complete our initial business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its needs and desires.

Effecting our Initial Business Combination

We are not presently engaged in, and we will not engage in, any operations until we consummate our initial business combination. We intend to complete our initial business combination using cash from the proceeds of our IPO and the sale of the private placement warrants to the sponsor and the forward purchase shares, our capital stock, debt or a combination of these as the consideration to be paid in our initial business combination. We may seek to complete our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.

If our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemptions of our public shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-transaction business, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other assets, companies or for working capital.


In addition to the forward purchase shares, we may seek to raise additional funds in connection with the completion of our initial business combination through a private offering of equity securities or debt securities or loans, and we may effectuate our initial business combination using the proceeds of such offerings or loans rather than using the amounts held in the trust account. Subject to compliance with applicable securities laws, we would expect to complete such financing only simultaneously with the completion of our initial business combination. In the case of an initial business combination funded with assets other than the trust account assets, our tender offer documents or proxy materials disclosing the initial business combination would disclose the terms of the financing and, only if required by applicable law, we would seek stockholder approval of such financing. There are no prohibitions on our ability to raise funds privately, or through loans in connection with our initial business combination.

For more information regarding the PIPE Shares to be issued in connection with the Cyxtera Business Combination, please see “—Proposed Business Combination” above.

Selection of a Target Business and Structuring of our Initial Business Combination

As required by Nasdaq rules, our initial business combination will be approved by a majority of our independent directors. Nasdaq rules also require that an initial business combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the value of the trust account (excluding any deferred underwriting discount and taxes payable on the income earned on the trust account). The fair market value of the target or targets will be determined by our board of directors based upon one or more standards generally accepted by the financial community, such as discounted cash flow valuation or value of comparable businesses. If our board is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm, with respect to the satisfaction of such criteria. We do not currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination, although there is no assurance that will be the case. Subject to this requirement, our management will have virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses, although we will not be permitted to effectuate our initial business combination with another blank check company or a similar company with nominal operations.

In any case, we will only complete an initial business combination in which we own or acquire 50% or more of the outstanding voting securities of the target or otherwise acquire a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act. If we own or acquire less than 100% of the equity interests or assets of a target business or businesses, the portion of such business or businesses that are owned or acquired by the post-transaction company is what will be valued for purposes of the 80% test. There is no basis for investors in our securities to evaluate the possible merits or risks of any target business with which we may ultimately complete our initial business combination.

To the extent we effect our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth, we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.

In evaluating a prospective target business, we conduct a thorough due diligence review which encompasses, among other things, meetings with incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial, operational, legal and other information which will be made available to us.

Any costs incurred with respect to the identification and evaluation of a prospective target business with which our initial business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination.


Lack of Business Diversification

For an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend entirely on the future performance of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business. By completing our initial business combination with only a single entity, our lack of diversification may:

subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination, and

cause us to depend on the marketing and sale of a single product or limited number of products or services.

Limited Ability to Evaluate the Target’s Management Team

Although we closely scrutinize the management of a prospective target business when evaluating the desirability of effecting our initial business combination with that business, our assessment of the target business’s management may not prove to be correct. In addition, the future management may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of our management team or of our board, if any, in the target business cannot presently be stated with any certainty. While it is possible that one or more of our directors or Industry Advisors will remain associated in some capacity with us following our initial business combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our initial business combination. Moreover, we cannot assure you that members of our management team will have significant experience or knowledge relating to the operations of the particular target business.

We cannot assure you that any of our key personnel will remain in senior management or advisory positions with the combined company. The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our initial business combination.

Following our initial business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management.

Stockholders may not have the Ability to Approve our Initial Business Combination

We may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC. However, we will seek stockholder approval if it is required by applicable law or stock exchange rule, or we may decide to seek stockholder approval for business or other reasons. Presented in the table below is a graphic explanation of the types of initial business combinations we may consider and whether stockholder approval is currently required under Delaware law for each such transaction.

Type of TransactionWhether
Stockholder
Approval is
Required
Purchase of assetsNo
Purchase of stock of target not involving a merger with the companyNo
Merger of target into a subsidiary of the companyNo
Merger of the company with a targetYes

Under Nasdaq’s listing rules, stockholder approval would be required for our initial business combination if, for example:

we issue shares of common stock that will either be equal to or in excess of 20% of the number of shares of our common stock then outstanding (other than in a public offering);


any of our directors, officers or substantial security holders (as defined by Nasdaq rules) has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of common stock could result in an increase in outstanding common shares or voting power of 5% or more; or

the issuance or potential issuance will result in our undergoing a change of control.

The decision as to whether we will seek stockholder approval of a proposed business combination in those instances in which stockholder approval is not required by law will be made by us, solely in our discretion, and will be based on business and legal reasons, which include a variety of factors, including, but not limited to:

the timing of the transaction, including in the event we determine stockholder approval would require additional time and there is either not enough time to seek stockholder approval or doing so would place the company at a disadvantage in the transaction or result in other additional burdens on the company;

the expected cost of holding a stockholder vote;

the risk that the stockholders would fail to approve the proposed business combination;

other time and budget constraints of the company; and

additional legal complexities of a proposed business combination that would be time-consuming and burdensome to present to stockholders.

Permitted Purchases of our Securities

In the event we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, Industry Advisors or any of their respective affiliates may purchase public shares or redeemable warrants or a combination thereof in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. There is no limit on the number of shares or warrants such persons may purchase. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. In the event our initial stockholders, directors, officers, advisors or any of their respective affiliates determine to make any such purchases at the time of a stockholder vote relating to our initial business combination, such purchases could have the effect of influencing the vote necessary to approve such transaction. None of the funds in the trust account will be used to purchase public shares in such transactions. If they engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. Such a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. We have adopted an insider trading policy which requires insiders to (1) refrain from purchasing securities during certain blackout periods and when they are in possession of any material non-public information and (2) clear all trades with our legal counsel prior to execution. We cannot currently determine whether our insiders will make such purchases pursuant to a Rule 10b5-1 plan, as it will be dependent upon several factors, including but not limited to, the timing and size of such purchases. Depending on such circumstances, our insiders may either make such purchases pursuant to a Rule 10b5-1 plan or determine that such a plan is not necessary.

In the event that our sponsor, directors, officers, advisors or any of their respective affiliates purchase public shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights or submitted a proxy to vote against our initial business combination, such selling stockholders would be required to revoke their prior elections to redeem their shares and any proxy to vote against our initial business combination. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules.


The purpose of such purchases could be to vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of our initial business combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. This may result in the completion of our initial business combination that may not otherwise have been possible. In addition, if such purchases are made, the public “float” of our common stock may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.

Our sponsor, officers, directors, advisors and/or any of their respective affiliates anticipate that they may identify the stockholders with whom our sponsor, officers, directors, advisors or any of their respective affiliates may pursue privately negotiated purchases by either the stockholders contacting us directly or by our receipt of redemption requests submitted by stockholders following our mailing of proxy materials in connection with our initial business combination. To the extent that our sponsor, officers, directors, advisors or any of their respective affiliates enter into a private purchase, they would identify and contact only potential selling stockholders who have expressed their election to redeem their shares for a pro rata share of the trust account or vote against our initial business combination. Such persons would select the stockholders from whom to acquire shares based on the number of shares available, the negotiated price per share and such other factors as any such person may deem relevant at the time of purchase. The price per share paid in any such transaction may be different than the amount per share a public stockholder would receive if it elected to redeem its shares in connection with our initial business combination. Our sponsor, officers, directors, advisors or any of their respective affiliates will purchase shares only if such purchases comply with Regulation M under the Exchange Act and the other federal securities laws. Any purchases by our sponsor, officers, directors and/or any of their respective affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act will only be made to the extent such purchases are made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical requirements that must be complied with in order for the safe harbor to be available to the purchaser. Our sponsor, officers, directors and/or any of their respective affiliates will be restricted from making purchases of common stock if such purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act.

Redemption Rights for Public Stockholders Upon Completion of our Initial Business Combination

We will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion of our initial business combination at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of our initial business combination, including interest (net of amounts withdrawn to pay our taxes (“permitted withdrawals”)), divided by the number of then outstanding public shares, subject to the limitations described herein. At completion of the initial business combination, we will be required to purchase any public shares properly delivered for redemption and not withdrawn. The amount in the trust account as of December 31, 2020 is $10.00 per public share. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. However, the per-share redemption amount received by public stockholders could be less than the $10.00 per public share initially held in the trust account due to claims of creditors (see “Item 1A. Risk Factors— Risks Relating to our Securities — If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein). The redemption right will include the requirement that any beneficial owner on whose behalf a redemption right is being exercised must identify itself in order to validly redeem its shares. Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the completion of our initial business combination.


Distribution of Redeemable Warrants to Holders of Class A Common Stock not Electing Redemption

Our amended and restated certificate of incorporation provides that, at the distribution time, we will effect a distribution of a number of warrants equal to the Aggregate Warrant Amount as follows: (i) to the extent that no public stockholders redeem their public shares in connection with the initial business combination, each public stockholder will receive one-sixth of one distributable redeemable warrant per public share and (ii) to the extent that any public stockholders redeem any of their public shares in connection with the initial business combination, then (A) one-sixth of one distributable redeemable warrant will be distributed per each remaining public share and (B) the warrants in an amount equal to the Aggregate Warrant Amount less the number of warrants distributed pursuant to the foregoing clause (A) will be distributed on a pro rata basis to (x) the holders of the remaining public shares based on their percentage of Class A common stock held after redemptions and the issuance of any forward purchase shares, as distributable redeemable warrants and (y) the holders of the forward purchase shares based on their percentage of Class A common stock held after redemptions and the issuance of any forward purchase shares, as private placement warrants. Public stockholders who exercise their redemption rights are not entitled to receive any distribution of distributable redeemable warrants in respect of such redeemed public shares.

The distribution of the distributable redeemable warrants in respect of a public share is contingent upon such share not being redeemed in connection with our initial business combination, and the number of distributable redeemable warrants to be distributed in respect of each such unredeemed public shares will be contingent upon the aggregate number of public shares that are redeemed. The contingent rights to receive distributable redeemable warrants will remain attached to our Class A common stock, will not be separately transferrable, assignable or salable, and will not be evidenced by any certificate or instrument.

Our distributable redeemable warrants are otherwise identical to our detachable redeemable warrants, including with respect to exercise price, exercisability and exercise period. No fractional distributable redeemable warrants will be issued, no cash will be paid in lieu of fractional distributable redeemable warrants and only whole distributable redeemable warrants will trade. The distributable redeemable warrants will be fungible with our detachable redeemable warrants and will become tradable upon their distribution under the same stock symbol as the detachable redeemable warrants.

Manner of Conducting Redemptions

We will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion of our initial business combination either (i) in connection with a stockholder meeting called to approve the business combination or (ii) by means of a tender offer. Pursuant to the forward purchase agreement, the forward purchasers have agreed that they will not redeem any Class A common stock held by them in connection with the initial business combination. The decision as to whether we will seek stockholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek stockholder approval under applicable law or stock exchange listing requirement. Asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our outstanding common stock or seek to amend our amended and restated certificate of incorporation would typically require stockholder approval. If we structure a business combination transaction with a target company in a manner that requires stockholder approval, we will not have discretion as to whether to seek a stockholder vote to approve the proposed business combination. We currently intend to conduct redemptions pursuant to a stockholder vote unless stockholder approval is not required by applicable law or stock exchange listing requirement and we choose to conduct redemptions pursuant to the tender offer rules of the SEC for business or other reasons.

If a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other reasons, we will, pursuant to our amended and restated certificate of incorporation:

conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and

file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.

Upon the public announcement of our initial business combination, we and our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase shares of our Class A common stock in the open market if we elect to redeem our public shares through a tender offer, to comply with Rule 14e-5 under the Exchange Act.


In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number of public shares, which number will be based on the requirement that we may not redeem public shares in an amount that would cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete such initial business combination.

If, however, stockholder approval of the transaction is required by applicable law or stock exchange listing requirement, or we decide to obtain stockholder approval for business or other reasons, we will, pursuant to our amended and restated certificate of incorporation:

conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and

file proxy materials with the SEC.

We expect that a final proxy statement would be mailed to public stockholders at least 10 days prior to the stockholder vote. However, we expect that a draft proxy statement would be made available to such stockholders well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy solicitation. Although we are not required to do so, we currently intend to comply with the substantive and procedural requirements of Regulation 14A in connection with any stockholder vote even if we are not able to maintain our Nasdaq listing or Exchange Act registration.

In the event that we seek stockholder approval of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our public stockholders with the redemption rights described above upon completion of the initial business combination.

If we seek stockholder approval, we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock of the company entitled to vote at such meeting. Our initial stockholders, officers and directors will count towards this quorum and have agreed to vote any founder shares and any public shares held by them in favor of our initial business combination. These quorum and voting thresholds and agreements may make it more likely that we will consummate our initial business combination. Each public stockholder may elect to redeem its public shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction. In addition, our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the completion of a business combination.

Our amended and restated certificate of incorporation provides that in no event will we redeem our public shares in an amount that would cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules). Redemptions of our public shares may also be subject to a higher net tangible asset test or cash requirement pursuant to an agreement relating to our initial business combination. For example, the proposed business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration we would be required to pay for all shares of Class A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, and all shares of Class A common stock submitted for redemption will be returned to the holders thereof.


Limitation on Redemption Upon Completion of our Initial Business Combination if we Seek Stockholder Approval

Notwithstanding the foregoing, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in our IPO, without our prior consent, which we refer to as the “Excess Shares.” We believe this restriction will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed business combination as a means to force us or our affiliates to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15% of the shares sold in our IPO could threaten to exercise its redemption rights if such holder’s shares are not purchased by us or our affiliates at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders’ ability to redeem no more than 15% of the shares sold in our IPO, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination.

Tendering Stock Certificates in Connection With a Tender Offer or Redemption Rights

We may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed to such holders, or up to two business days prior to the initially scheduled vote on the proposal to approve the business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, rather than simply voting against the initial business combination at the holder’s option. The tender offer or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements, which will include the requirement that any beneficial owner on whose behalf a redemption right is being exercised must identify itself in order to validly redeem its shares. Accordingly, a public stockholder would have from the time we send out our tender offer materials until the close of the tender offer period, or up to two business days prior to the initially scheduled vote on the business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights. Pursuant to the tender offer rules, the tender offer period will be not less than 20 business days and, in the case of a stockholder vote, a final proxy statement would be mailed to public stockholders at least 10 days prior to the stockholder vote. However, we expect that a draft proxy statement would be made available to such stockholders well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy solicitation. Given the relatively short exercise period, it is advisable for stockholders to use electronic delivery of their public shares.

There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System. The transfer agent will typically charge the tendering broker $80.00 and it would be up to the broker whether or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights to tender their shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated.


The foregoing is different from the procedures used by many blank check companies. In order to perfect redemption rights in connection with their business combinations, many blank check companies would distribute proxy materials for the stockholders’ vote on an initial business combination, and a holder could simply vote against a proposed business combination and check a box on the proxy card indicating such holder was seeking to exercise his or her redemption rights. After the business combination was approved, the company would contact such stockholder to arrange for him or her to deliver his or her certificate to verify ownership. As a result, the stockholder then had an “option window” after the completion of the business combination during which he or she could monitor the price of the company’s stock in the market. If the price rose above the redemption price, he or she could sell his or her shares in the open market before actually delivering his or her shares to the company for cancellation. As a result, the redemption rights, to which stockholders were aware they needed to commit before the stockholder meeting, would become “option” rights surviving past the completion of the business combination until the redeeming holder delivered its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming holder’s election to redeem is irrevocable once the business combination is approved.

Any request to redeem such shares, once made, may be withdrawn at any time up to the date set forth in the tender offer materials or the date of the stockholder meeting set forth in our proxy materials, as applicable. Furthermore, if a holder of a public share delivered its certificate in connection with an election of redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically or electronically). It is anticipated that the funds to be distributed to holders of our public shares electing to redeem their shares will be distributed promptly after the completion of our initial business combination.

If our initial business combination is not approved or completed for any reason, then our public stockholders who elected to exercise their redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any certificates delivered by public holders who elected to redeem their shares.

If the Cyxtera Business Combination is not completed, we may continue to try to complete a business combination with a different target by September 14, 2022, which is 24 months from the closing of the IPO.

Redemption of Public Shares and Liquidation if no Initial Business Combination

Our amended and restated certificate of incorporation provides that we will have only 24 months from the closing of the IPO (i.e., until September 14, 2022) to complete our initial business combination. If we are unable to complete our initial business combination by September 14, 2022, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of permitted withdrawals and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our redeemable warrants, and our detachable redeemable warrants will expire worthless and no distributable redeemable warrants will have been issued if we fail to complete our initial business combination within 24 months from the closing of the IPO.

Our initial stockholders, officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to any founder shares held by them if we fail to complete our initial business combination within 24 months from the closing of the IPO. However, if our sponsor or any of our officers and directors acquires public shares after the IPO, it will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within 24 months from the closing of the IPO.


Our sponsor, officers and directors have agreed, pursuant to a letter agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide holders of our Class A common stock the right to have their shares redeemed or to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of the IPO, unless we provide our public stockholders with the opportunity to redeem their shares of Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of permitted withdrawals), divided by the number of then outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules).

We expect to use the amounts held outside the trust account ($2,557,154 as of December 31, 2020) to pay for all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, although we cannot assure you that there will be sufficient funds for such purpose. However, if those funds are not sufficient to cover the costs and expenses associated with implementing our plan of dissolution, to the extent that there is any interest accrued in the trust account not required to pay taxes, we may request the trustee to release to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.

If we were to expend all of the net proceeds of our IPO and the sale of the private placement warrants to the sponsor, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account and any tax payments or expenses for the dissolution of the trust, the per-share redemption amount received by stockholders upon our dissolution would be $10.00. The proceeds deposited in the trust account could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public stockholders. We cannot assure you that the actual per-share redemption amount received by stockholders will not be substantially less than $10.00. Please see “Item 1A. Risk Factors— Risks Relating to our Securities — If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors described above. Under Section 281(b) of the Delaware General Corporation Law (“DGCL”), our plan of dissolution must provide for all claims against us to be paid in full or make provision for payments to be made in full, as applicable, if there are sufficient assets. These claims must be paid or provided for before we make any distribution of our remaining assets to our stockholders. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims.

Although we seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims 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. 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 we are 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 futureattractive 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. In order to protect the amounts held in the trust account, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (1) $10.00 per public share or (2) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in the value of the trust assets, in each case net of permitted withdrawals, except as to any claims by a third party that executed a waiver of any and all rights to the monies held in the trust account (whether any such waiver is enforceable) and except as to any claims under our indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company and, therefore, our sponsor may not be able to satisfy those obligations. We have not asked our sponsor to reserve for such obligations. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against the trust account, the funds available for our initial business combination and redemptions could be reduced to less than $10.00 per public share. In such event, we may not be able to complete our initial business combination, and you would receive such lesser amount per share in connection with any redemption of your public shares. None of our officers will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses. None of our other officers will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

In the event that the proceeds in the trust account are reduced below (i) $10.00 per public share or (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in the value of the trust assets, in each case net of permitted withdrawals, and our sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in certain instances. For example, the cost of such legal actionthere may be deemed by the independent directors to be too high relative to the amount recoverable or the independent directors may determine that a favorable outcome is not likely.

Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be substantially less than $10.00 per share. Please see “Item 1A. Risk Factors— Risks Relating to our Securities — If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors described above.

We seek to reduce the possibility that our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account. Our sponsor will also not be liable as to any claims under our indemnity of the underwriters of our IPO against certain liabilities, including liabilities under the Securities Act. We will have access to the amounts held outside the trust account ($2,557,154 as of December 31, 2020) to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000), but these amounts may be spent on expenses incurred as a result of being a public company or due diligence expenses on prospective business combination candidates. In the event that we liquidate and it is subsequently determined that the reserveactive trading market for claims and liabilities is insufficient, stockholders who received funds from our trust account could be liable for claims made by creditors.

Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination by September 14, 2022 may be considered a liquidating distribution under Delaware law. If the corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution.


Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination by September 14, 2022, is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful, 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. If we are unable to complete our initial business combination by September 14, 2022, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of permitted withdrawals and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Accordingly, it is our intention to redeem our public shares as soon as reasonably possible following our 24th month and, therefore, we do not intend to comply with those procedures. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary of such date.

Because we will not be complying with 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 subsequent ten years. However, because we are a blank check company, rather than an operating company, and our operations are limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. As described above, we seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account. As a result of this obligation, the claims that could be made against us are significantly limited and the likelihood that any claim that would result in any liability extending to the trust account is remote. Further, our sponsor may be liable only to the extent necessary to ensure that the amounts in the trust account are not reduced below (i) $10.00 per public share or (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in value of the trust assets, in each case net of permitted withdrawals and will not be liable as to any claims under our indemnity of the underwriters of our IPO against certain liabilities, including liabilities under the Securities Act.

If we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to return $10.00 per share to our public stockholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our stockholders. Furthermore, our board may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons. Please see “Item 1A. Risk Factors— Risks Relating to our Search for, Consummation of, or Inability to Consummate, a Business Combination and Post-Business Combination Risks — If, after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages.”


Our public stockholders will be entitled to receive funds from the trust account only in the event of the redemption of our public shares if we do not complete our initial business combination by September 14, 2022 or if they redeem their respective shares for cash upon the completion of the initial business combination. In no other circumstances will a stockholder have any right or interest of any kind to or in the trust account. In the event we seek stockholder approval in connection with our initial business combination, a stockholder’s voting in connection with our initial business combination alone will not result in a stockholder’s redeeming its shares to us for an applicable pro rata share of the trust account. Such stockholder must have also exercised its redemption rights described above.

Competition

In identifying, evaluating and selecting a target business for our initial business combination, we encounter intense competition from other entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, public companies and operating businesses seeking strategic acquisitions. Many of these entities are well-established and have extensive experience identifying and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other resources than we do. Our ability to acquire larger target businesses will be limited by our available financial resources. This inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore, our obligation to pay cash in connection with our public stockholders who exercise their redemption rights may reduce the resources available to us for our initial business combination and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating an initial business combination.

Facilities

Our offices are located at 777 Third Avenue, 18th Floor, New York, New York 10017, and our telephone number is (212) 845-7977. Our corporate website address is StarboardSVAC.com. Our website and the information contained on, or that can be accessed through, the website is not deemed to be incorporated by reference in, and is not considered part of, this Annual Report. You should not rely on any such information in making your decision whether to invest in our securities.

Employees

We currently have three officers and do not intend to have any full-time employees prior to the completion of our initial business combination. Members of our management team are not obligated to devote any specific number of hours to our matters, but they devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time that any such person devotes to our company in any time period varies based on the stage of the initial business combination process we are in.

Periodic Reporting and Financial Information

We have registered our units, Class A common stock and redeemable warrants under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual reports contain financial statements audited and reported on by our independent registered public accounting firm.

We will provide stockholders with audited financial statements of the prospective target business as part of the tender offer materials or proxy solicitation materials sent to stockholders to assist them in assessing the target business. These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America (“GAAP”) or International Accounting Standards Board (“IFRS”), depending on the circumstances and the historical financial statements may be required to be audited in accordance with the Public Company Accounting Oversight Board (United States) (“PCAOB”). These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such financial statements in time for us to disclose such financial statements in accordance with federal proxy rules and complete our initial business combination within 24 months from the closing of the IPO. We cannot assure you that any particular target business identified by us as a potential business combination candidate will have financial statements prepared in accordance with GAAP or that the potential target business will be able to prepare its financial statements in accordance with the requirements outlined above. To the extent that these requirements cannot be met, we may not be able to acquire the proposed target business. While this may limit the pool of potential business combination candidates, we do not believe that this limitation will be material.


We will be required to evaluate our internal control procedures for the fiscal year ending December 31, 2021 as required by the Sarbanes-Oxley Act. Only in the event we are deemed to be a large accelerated filer or an accelerated filer and no longer an emerging growth company will we be required to have our internal control procedures audited. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.

Item 1A.Risk Factors.

Risk Factors Summary

The following is a summary of the principal risks that could adversely affect our business, operations and financial results. This summary does not address all of the risks that we face. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under the heading “Risk Factors” and should be carefully considered, together with other information in this Annual Report, before making an investment decision regarding our securities.

We are a recently incorporated company with a limited history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.

Past performance by Starboard, our management team and our Industry Advisors may not be indicative of future performance of an investment in us.

Our public stockholders may not be afforded an opportunity to vote on our proposed initial business combination, and even if we hold a vote, holders of our founder shares will participate in such vote, which means we may complete our initial business combination even though a majority of our public stockholders do not support such a combination.

Your only opportunity to affect the investment decision regarding a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash, unless we seek stockholder approval of such business combination.

If you elect to exercise your redemption rights with respect to your shares of Class A common stock, you will not receive any distributable redeemable warrants.

Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the recent coronavirus (COVID-19) outbreak and the status of debt and equity markets.

We may not be able to complete our initial business combination within 24 months from the closing of the IPO, in which case we would cease all operations, except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public stockholders may receive only $10.00 per share, or less than such amount in certain circumstances, and our detachable redeemable warrants will expire worthless, and our distributable redeemable warrants will never have been distributed.

Because we are not limited to evaluating target businesses in a particular industry, you will be unable to ascertain the merits or risks of any particular target business’s operations.

Although we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial business combination may not have attributes entirely consistent with our general criteria and guidelines.

We may seek acquisition opportunities with an early stage company, a financially unstable business or an entity lacking an established record of revenue or earnings, which could subject us to volatile revenues or earnings, intense competition and difficulties in obtaining and retaining key personnel.

We may not hold an annual meeting of stockholders until after we consummate our initial business combination and you will not be entitled to any of the corporate protections provided by such a meeting.

We are not registering the shares of Class A common stock issuable upon exercise of the redeemable warrants under the Securities Act or any state securities laws at this time, and such registration may not be in place when an investor desires to exercise redeemable warrants, thus precluding such investor from being able to exercise its warrants except on a “cashless basis” and potentially causing such warrants to expire worthless.

We may amend the terms of the redeemable warrants in a manner that may be adverse to holders of such warrants with the approval by the holders of at least 50% of the then outstanding redeemable warrants. As a result, the exercise price of your redeemable warrants could be increased, the redeemable warrants could be converted into cash or stock (at a ratio different than initially provided), the exercise period could be shortened and the number of shares of our Class A common stock purchasable upon exercise of a redeemable warrant could be decreased, all without your approval.

Since our initial stockholders will lose their entire investment in us if our initial business combination is not completed (other than with respect to any public shares they may hold), a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.

Our management may not be able to maintain control of a target business after our initial business combination. Upon loss of control of a target business, new management may not possess the skills, qualifications or abilities necessary to profitably operate such business.

Our initial stockholders control the election of our board of directors until consummation of our initial business combination and hold a substantial interest in us. As a result, they will elect all of our directors prior to the consummation of our initial business combination and may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support.

Risk Factors

An investment in our securities involves a high degree of risk. You should consider carefully all of the risks described below, together with the other information contained in this Annual Report, before making a decision to invest in our securities. If any of the following events occur, our business, financial condition and operating results may be materially adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your investment. Additional risk factors relating to the Cyxtera Business Combination will be included in the proxy statement to be filed by us with the SEC.

Risks Relating to our Search for, Consummation of, or Inability to Consummate, a Business Combination and Post-Business Combination Risks

We are a recently incorporated company with a limited history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.

We are a recently incorporated company with operations limited to pursuing and reviewing potential opportunities for the initial business combination since the IPO. Because we lack an extensive operating history, you have no basis upon which to evaluate our ability to achieve our business objective of completing our initial business combination with one or more target businesses. If we fail to complete our initial business combination, we will never generate any operating revenues.


Past performance by Starboard, our management team and our Industry Advisors may not be indicative of future performance of an investment in us.

Information or other references herein regarding performance by, or businesses associated with, Starboard, members of our management team and our Industry Advisors is presented for informational purposes only. Any past experience and performance, including related to acquisitions, of Starboard, businesses associated with Starboard, or members of our management team or Industry Advisors is not a guarantee: (1) that we will be able to successfully identify a suitable candidate for our initial business combination; (2) of any results with respect to any initial business combination we may consummate; or (3) that we will be able to adequately assess the risks of a potential transaction. You should not rely on the historical record and performance of Starboard, businesses associated with Starboard, members of our management team or our Industry Advisors as indicative of the future performance of an investment in us or the returns we will, or are likely to, generate going forward. An investment in us is not an investment in Starboard or any of its clients, and does not in any way create an advisory relationship between Starboard and any of our stockholders. None of our sponsor, officers, directors, Industry Advisors or Starboard has had experience with a blank check company or special purpose acquisition company in the past. Starboard is not acting as our investment adviser. Furthermore, Starboard acts as investment adviser to its advisory clients, and will be required to prioritize the interests of those clients, even to the extent that Starboard’s activities may operate to our detriment.

Our public stockholders may not be afforded an opportunity to vote on our proposed initial business combination, and even if we hold a vote, holders of our founder shares will participate in such vote, which means we may complete our initial business combination even though a majority of our public stockholders do not support such a combination.

We may not hold a stockholder vote to approve our initial business combination unless the business combination would require stockholder approval under applicable law or stock exchange listing requirements or if we decide to hold a stockholder vote for business or other reasons. For instance, the Nasdaq rules currently allow us to engage in a tender offer in lieu of a stockholder meeting but would still require us to obtain stockholder approval if we were seeking to issue more than 20% of our outstanding shares to a target business as consideration in any business combination. Therefore, if we were structuring a business combination that required us to issue more than 20% of our outstanding shares, we would seek stockholder approval of such business combination. However, except as required by applicable law or stock exchange rules, the decision as to whether we will seek stockholder approval of a proposed business combination or will allow stockholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek stockholder approval. Even if we seek stockholder approval, the holders of our founder shares will participate in the vote on such approval. Accordingly, we may consummate our initial business combination even if holders of a majority of our outstanding public shares do not approve of the business combination we consummate. Please see “Item 1. Business—Stockholders may not Have the Ability to Approve our Initial Business Combination” for additional information.

If we seek stockholder approval of our initial business combination, our sponsor, officers and directors have agreed to vote in favor of such initial business combination, regardless of how our public stockholders vote.

Our initial stockholders, officers and directors have agreed (and their permitted transferees will agree) to vote any founder shares and any public shares held by them in favor of our initial business combination. We expect that our initial stockholders and their permitted transferees will own at least 20% of our outstanding shares of common stock at the time of any such stockholder vote. Accordingly, if we seek stockholder approval of our initial business combination, it is more likely that the necessary stockholder approval will be received than would be the case if our initial stockholders and their permitted transferees agreed to vote their founder shares in accordance with the majority of the votes cast by our public stockholders.


In evaluating a prospective target business for our initial business combination, our management may rely on the availability of funds from the sale of the forward purchase shares which will be used to satisfy the Redemption Obligation. If the sale of some or all of the forward purchase shares fails to close, for any reason, we may lack sufficient funds to consummate our initial business combination.

We have entered into a forward purchase agreement pursuant to which the forward purchasers have agreed to purchase forward purchase shares in an aggregate amount of up to $100,000,000, in a private placement that will close simultaneously with the closing of our initial business combination. The funds from the sale of forward purchase shares will be used to satisfy the Redemption Obligation and is therefore intended to provide us with a minimum funding level for our initial business combination.

If the sale of some or all of the forward purchase shares does not close for any reason, including by reason of the failure by the forward purchasers to fund the purchase price for their forward purchase shares, we may lack sufficient funds to consummate our initial business combination. The forward purchasers’ obligations to purchase the forward purchase shares is subject to termination prior to the closing of the sale of the forward purchase shares by mutual written consent of the company and the forward purchasers. The forward purchasers’ obligations to purchase its forward purchase shares is subject to fulfillment of customary closing conditions. In the event of any such failure to fund by the forward purchase investors, any obligation is so terminated or any such closing condition is not satisfied and not waived by the forward purchasers, we may lack sufficient funds to consummate our initial business combination.

Your only opportunity to affect the investment decision regarding a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash, unless we seek stockholder approval of such business combination.

At the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of any target businesses. Additionally, since our board of directors may complete a business combination without seeking stockholder approval, public stockholders may not have the right or opportunity to vote on the business combination. Accordingly, if we do not seek stockholder approval, your only opportunity to affect the investment decision regarding a potential business combination may be limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public stockholders in which we describe our initial business combination.

If you elect to exercise your redemption rights with respect to your shares of Class A common stock, you will not receive any distributable redeemable warrants.

In connection with our initial business combination, public stockholders will have the opportunity to exercise their right to redeem their shares of Class A common stock for cash. However, our distributable redeemable warrants will be distributed only to the holders of record of those shares of our Class A common stock that remain outstanding after such redemptions. Accordingly, to the extent that you elect to redeem your shares of Class A common stock, you will receive no distributable redeemable warrants in respect of such shares. The contingent right to receive the distributable redeemable warrants will remain attached to our Class A common stock, will not be separately transferable, assignable or salable, and will not be evidenced by any certificate or instrument.

The ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target.

We may seek to enter into a business combination transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. If too many public stockholders exercise their redemption rights, we would not be able to meet such closing condition and, as a result, would not be able to proceed with the business combination. The amount of the deferred underwriting commissions payable to the underwriters will not be adjusted for any shares that are redeemed in connection with a business combination and such amount of deferred underwriting discount is not available for us to use as consideration in an initial business combination. Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 or such greater amount necessary to satisfy a closing condition as described above, we would not proceed with such redemption and the related business combination and may instead search for an alternate business combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business combination transaction with us. If we are able to consummate an initial business combination, the per-share value of shares held by non-redeeming stockholders will reflect our obligation to pay the deferred underwriting commissions.


The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure.

At the time we enter into an agreement for our initial business combination, we will not know how many stockholders may exercise their redemption rights and, therefore, we will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account to meet such requirements or arrange for third-party financing. In addition, if a larger number of shares is submitted for redemption than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for third-party financing. Raising additional third-party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. Furthermore, this dilution would increase to the extent that the anti-dilution provision of the Class B common stock results in the issuance of shares of Class A common stock on a greater than one-to-one basis upon conversion of the Class B common stock at the time of our initial business combination. In addition, the amount of deferred underwriting commissions payable to the underwriters is not required to be adjusted for any shares that are redeemed in connection with an initial business combination. The above considerations may limit our ability to complete the most desirable business combination available to us or optimize our capital structure.

The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your stock.

If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful increases. If our initial business combination is unsuccessful, you would not receive your pro rata portion of the trust account until we liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your stock in the open market; however, at such time our stock may trade at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your stock in the open market.

The requirement that we complete our initial business combination within 24 months from the closing of the IPO may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our stockholders.

Any potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination within 24 months from the closing of the IPO. Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not complete our initial business combination with that particular target business, we may be unable to complete our initial business combination with any target business. This risk will increase as we get closer to the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.


We may not be able to complete our initial business combination within 24 months from the closing of the IPO, in which case we would cease all operations, except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public stockholders may receive only $10.00 per share, or less than such amount in certain circumstances, and our detachable redeemable warrants will expire worthless, and our distributable redeemable warrants will never have been distributed.

Our amended and restated certificate of incorporation provides that we must complete our initial business combination within 24 months from the closing of the IPO. We may not be able to find a suitable target business and complete our initial business combination within such time period. Our ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein. For example, while the extent of the impact of the outbreak of the novel coronavirus disease 2019 (“COVID-19”) on us will depend on future developments, it could limit our ability to complete our initial business combination, including as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable on terms acceptable to us or at all. Additionally, the outbreak of COVID-19 may negatively impact businesses we may seek to acquire.

If we have not completed our initial business combination within such time period, we will: (1) cease all operations, except for the purpose of winding up; (2) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the public shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of permitted withdrawals and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In such case, our public stockholders may receive only $10.00 per share, or less than $10.00 per share, on the redemption of their shares, and our detachable redeemable warrants will expire worthless, and no distributable redeemable warrants will have been distributed. Please see “— Risks Relating to our Securities — If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.

If the net proceeds of the IPO and the sale of the private placement warrants to the sponsor not being held in the trust account are insufficient, it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination and we will depend on loans from our sponsor, Starboard or our management to fund our search, to pay our taxes and to complete our initial business combination. If we are unable to obtain such loans, we may be unable to complete our initial business combination.

Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the recent coronavirus (COVID-19) outbreak and the status of debt and equity markets.

The COVID-19 pandemic has resulted (and a significant outbreak of other infectious diseases could result) in a widespread health crisis and has adversely affected the economies and financial markets worldwide, and could materially and adversely affect the business of any potential target business with which we consummate a business combination. Furthermore, we may be unable to complete a business combination if continued concerns relating to COVID-19 restrict travel, limit the ability to have meetings with potential investors or the target company’s personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our search for a business combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue for an extensive period of time, our ability to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected.


In addition, our ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by COVID-19 and other events.

If we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors or any of their respective affiliates may elect to purchase shares or warrants from the public, which may influence a vote on a proposed business combination and reduce the public “float” of our common stock.

If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or any of their respective affiliates may purchase public shares or detachable redeemable warrants or a combination thereof in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination, although they are under no obligation or other duty to do so. Please see “Item 1. Business—Permitted Purchases of our Securities” for a description of how such persons will determine from which stockholders to seek to acquire shares or warrants. Such a purchase may include a contractual acknowledgement that such public stockholder, although still the record holder of our shares is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that our sponsor, directors, officers, advisors or any of their respective affiliates purchase public shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling public stockholders would be required to revoke their prior elections to redeem their shares. The price per share paid in any such transaction may be different than the amount per share a public stockholder would receive if it elected to redeem its shares in connection with our initial business combination. The purpose of such purchases could be to vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of our initial business combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose of such purchases could be to vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of our initial business combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of detachable redeemable warrants could be to reduce the number of such warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection with our initial business combination. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. Please see “Item 1. Business—Permitted Purchases of our Securities” for a description of how our sponsor, directors, officers, advisors or any of their respective affiliates will select which stockholders to purchase securities from in any private transaction.

In addition, if such purchases are made, the public “float” of our Class A common stock and the number of beneficial holders of our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.

Because of our limited resources and the significant competition for business combination opportunities, itshare price may be more difficult for us to complete our initial business combination. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on our redemption of their stock, and our detachable redeemable warrants will expire worthless, and no distributable redeemable warrants will have been distributed.

We expect to encounter intense competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, including, without limitation, Starboard’s clients, competing for the types of businesses we intend to acquire. Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there will be numerous target businesses we could potentially acquire with the net proceeds of the IPO and the sale of the private placement warrants to the sponsor, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. Although our sponsor, directors, officers, Industry Advisors, or any of their respective affiliates may invest in us after the date of the IPO, they are under no obligation or other duty to do so. Please see “Item 10. Directors, Executive Officers and Corporate Governance—Conflicts of Interest” for a discussion on certain limitations related to other resources Starboard may, but is under no obligation or other duty to, provide us.

volatile.


This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, in the event we seek stockholder approval of our initial business combination and we are obligated to pay cash for public shares that are redeemed, it will potentially reduce the resources available to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating and completing a business combination. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our detachable redeemable warrants will expire worthless, and no distributable redeemable warrants will have been distributed. Please see “ — Risks Relating to our Securities — If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.

If the funds not being held in the trust account are insufficient to allow us to operate for at least 24 months from the closing of the IPO, we may be unable to complete our initial business combination.

The funds available to us outside of the trust account may not be sufficient to allow us to operate for at least 24 months from the closing of the IPO, assuming that our initial business combination is not completed during that time. We believe that the funds available to us outside of the trust account will be sufficient to allow us to operate for at least 24 months from the closing of the IPO; however, we cannot assure you that our estimate is accurate. Of the funds available to us, we could use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent or merger agreements designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into a letter of intent or merger agreement where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our detachable redeemable warrants will expire worthless, and no distributable redeemable warrants will have been distributed. Please see “— Risks Relating to our Securities — If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.

If the net proceeds of the IPO and the sale of the private placement warrants to the sponsor not being held in the trust account are insufficient, it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination and we will depend on loans from our sponsor, Starboard or our management to fund our search, to pay our taxes and to complete our initial business combination. If we are unable to obtain such loans, we may be unable to complete our initial business combination.

Of the net proceeds of the IPO and the sale of the private placement warrants to the sponsor, only a limited amount is available to us outside the trust account to fund our working capital requirements. If we are required to seek additional capital, we would need to borrow funds from our sponsor, Starboard or our management to operate or may be forced to liquidate. None of our sponsor, Starboard or our management is under any obligation or other duty to loan funds to us in such circumstances. Any such loans would be repaid only from funds held outside the trust account or from funds released to us upon completion of 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. In such case, our public stockholders may receive only $10.00 per share, or less in certain circumstances, and our detachable redeemable warrants will expire worthless, and no distributable redeemable warrants will have been distributed. Please see “— Risks Relating to our Securities — If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.


The securities in which we invest the proceeds held in the trust account could bear a negative rate of interest, which could reduce the interest income available for payment of taxes or reduce the value of the assets held in trust such that the per share redemption amount received by stockholders may be less than $10.00 per share.

The proceeds held in the trust account are only invested in direct U.S. Treasury obligations having a maturity of 185 days or less, or in certain money market funds which invest only in direct U.S. Treasury obligations. While short-term U.S. Treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent years. Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States. In the event of very low or negative yields, the amount of interest income (which we may withdraw to pay income taxes, if any) would be reduced. In the event that we are unable to complete our initial business combination, our public stockholders are entitled to receive their pro-rata share of the proceeds held in the trust account, plus any interest income. If the balance of the trust account is reduced below $404,234,530 as a result of negative interest rates, the amount of funds in the trust account available for distribution to our public stockholders may be reduced below $10.00 per share.

Subsequent to our completion of our initial business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and the price of our securities, which could cause you to lose some or all of your investment.

Even if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will identify all material issues that may be present with a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing. Accordingly, any stockholders or warrant holders who choose to remain a stockholder or warrant holder following our initial business combination could suffer a reduction in the value of their securities. Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value.

If, after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages.

If, after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our stockholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith by paying public stockholders from the trust account prior to addressing the claims of creditors, thereby exposing itself and us to claims of punitive damages.


If, before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.

If, before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, the per share amount that would otherwise be received by our public stockholders in connection with our liquidation would be reduced.

If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination.

If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:

restrictions on the nature of our investments; and

restrictions on the issuance of securities;

each of which may make it difficult for us to complete our initial business combination.

In addition, we may have imposed upon us burdensome requirements, including:

registration as an investment company with the SEC;

adoption of a specific form of corporate structure; and

reporting, record keeping, voting, proxy and disclosure requirements and compliance with other rules and regulations that we are currently not subject to.

In order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other than investing, reinvesting or trading of securities and that our activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business will be to identify and complete a business combination and thereafter to operate the post-transaction business or assets for the long term. We do not plan to buy businesses or assets with a view to resale or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.

We do not believe that our anticipated principal activities will subject us to the Investment Company Act. To this end, the proceeds held in the trust account are only invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting the investment of the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses for the 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. Our securities are 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 primary business objective, which is a business combination; (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide holders of our Class A common stock the right to have their shares redeemed or to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of the IPO, or with respect to any other material provision relating to stockholder rights or pre-initial business combination activity; and (iii) absent a business combination, our return of the funds held in the trust account to our public stockholders as part of our redemption of the public shares. If we do not invest the proceeds as discussed above, we may be deemed to be subject to the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to consummate our initial business combination. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share on the liquidation of our trust account and our detachable redeemable warrants will expire worthless and no distributable redeemable warrants will have been issued. In certain circumstances, our public stockholders may receive less than $10.00 per share on the redemption of their shares. Please see “— Risks Relating to our Securities — If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.


We may not hold an annual meeting of stockholders until after we consummate our initial business combination and you will not be entitled to any of the corporate protections provided by such a meeting.

We may not hold an annual meeting of stockholders until after we consummate our initial business combination (unless required by Nasdaq) and thus may not be in compliance with Section 211(b) of the DGCL, which requires an annual meeting of stockholders be held for the purposes of electing directors in accordance with a company’s bylaws unless such election is made by written consent in lieu of such a meeting. Therefore, if our stockholders want us to hold an annual meeting prior to our consummation of our initial business combination, they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of the DGCL.

Because we are not limited to evaluating target businesses in a particular industry, you will be unable to ascertain the merits or risks of any particular target business’s operations.

We may seek to complete a business combination with an operating company in any industry or sector. However, we are not, under our amended and restated certificate of incorporation, permitted to effectuate our initial business combination with another blank check company or similar company with nominal operations. To the extent we complete our initial business combination, we may be affected by numerous risks inherent in the business operations with which we combine. For example, if we combine with a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development stage entity. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business. We also cannot assure you that an investment in our units will ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available, in a business combination target. Accordingly, any stockholders or warrant holders who choose to remain a stockholder or warrant holder following our initial business combination could suffer a reduction in the value of their securities. Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value.

We may seek acquisition opportunities in acquisition targets that may be outside of our management’s areas of expertise.

We may consider a business combination in sectors which may be outside of our management’s areas of expertise if such business combination candidate is presented to us and we determine that such candidate offers an attractive acquisition opportunity for our company. In the event we elect to pursue an acquisition outside of the areas of our management’s expertise, our management’s expertise may not be directly applicable to its evaluation or operation, and the information contained in this Annual Report regarding the areas of our management’s expertise would not be relevant to an understanding of the business that we elect to acquire. As a result, our management may not be able to adequately ascertain or assess all of the significant risk factors relevant to such acquisition. Accordingly, any stockholders or warrant holders who choose to remain a stockholder or warrant holder following our initial business combination could suffer a reduction in the value of their securities. Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value.


Although we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial business combination may not have attributes entirely consistent with our general criteria and guidelines.

Although we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business combination will not have all of these positive attributes. If we complete our initial business combination with a target that does not meet some or all of these criteria and guidelines, such combination may not be as successful as a combination with a business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business combination with a target that does not meet our general criteria and guidelines, a greater number of stockholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if stockholder approval of the transaction is required by applicable law or stock exchange rules, or we decide to obtain stockholder approval for business or other reasons, it may be more difficult for us to attain stockholder approval of our initial business combination if the target business does not meet our general criteria and guidelines. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our detachable redeemable warrants will expire worthless and no distributable redeemable warrants will have been issued.

We may seek acquisition opportunities with an early stage company, a financially unstable business or an entity lacking an established record of revenue or earnings, which could subject us to volatile revenues or earnings, intense competition and difficulties in obtaining and retaining key personnel.

To the extent we complete our initial business combination with an early stage company, a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by numerous risks inherent in the operations of the business with which we combine. These risks include investing in a business without a proven business model and with limited historical financial data, volatile revenues or earnings, intense competition and difficulties in obtaining and retaining key personnel. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we may not be able to properly ascertain or assess all of the significant risk factors and we may not have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.

A slowdown in economic growth in the markets that our business target operates in may adversely affect our business, financial condition, results of operations, the value of its shares and the trading price of our shares following our business combination.

Following the business combination, our results of operations and financial condition may be dependent on, and may be adversely affected by, conditions in financial markets in the global economy, and, particularly in the markets where the business operates. The specific economy could be adversely affected by various factors, such as political or regulatory action, including business corruption, social disturbances, terrorist attacks and other acts of violence or war, natural calamities, interest rates, inflation, commodity and energy prices and various other factors which may adversely affect our business, financial condition, results of operations, value of our shares and the trading price of our shares following the business combination.


We are not required to obtain an opinion from an independent investment banking firm or from an independent accounting firm, and consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our stockholders from a financial point of view.

Unless we complete our initial business combination with an affiliated entity, we are not required to obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm that the price we are paying is fair to our stockholders from a financial point of view.

In addition, if our board of directors is not able to determine the fair market value of the target business or businesses, in connection with Nasdaq rules that require that an initial business combination be with one or more operating businesses or assets with a fair market value equal to at least 80% of the value of the trust account (excluding any deferred underwriting discount and taxes payable on the income earned on the trust account), we will obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm with respect to the satisfaction of such criteria.

Other than the two circumstances described above, we are not required to obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm.

If no opinion is obtained, our stockholders will be relying on the judgment of our board of directors, who will determine fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed in our tender offer documents or proxy solicitation materials, as applicable, related to our initial business combination.

We may issue additional shares of Class A common stock or preferred stock to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. We may also issue shares of Class A common stock upon the conversion of the Class B common stock at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions described herein. Any such issuances would dilute the interest of our stockholders and likely present other risks.

Our amended and restated certificate of incorporation authorizes the issuance of up to 200,000,000 shares of Class A common stock, par value $0.0001 per share, and 20,000,000 shares of Class B common stock, par value $0.0001 per share, and 1,000,000 shares of undesignated preferred stock, par value $0.0001 per share. There are 139,378,936 and 9,894,137 authorized but unissued shares of Class A and Class B common stock, respectively, available for issuance, which amount takes into account shares reserved for issuance upon exercise of the redeemable warrants and the private placement warrants issued to the sponsor, but not shares reserved upon the exercise of the forward purchase shares or the conversion of the Class B common stock. Shares of Class B common stock are automatically convertible into shares of our Class A common stock at the time of our initial business combination, initially at a one-for-one ratio but subject to adjustment as set forth herein. There are no shares of preferred stock issued and outstanding.

We may issue a substantial number of additional shares of Class A common stock, and may issue shares of preferred stock, in order to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. We may also issue shares upon conversion of the Class B common stock at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions described herein. However, our amended and restated certificate of incorporation provides, among other things, that prior to our initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (1) receive funds from the trust account or (2) vote on any initial business combination, pre-initial business combination activity or amendments to our amended and restated certificate of incorporation. The issuance of additional shares of common or preferred stock, including the issuance of the forward purchase shares:

may significantly dilute the equity interest of investors in the IPO;

may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock;

could cause a change in control if a substantial number of shares of common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and


may adversely affect prevailing market prices for our units, common stock and/or redeemable warrants.

Resources could be wasted in researching initial business combinations that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share, or less than such amount in certain circumstances, on the liquidation of our trust account and our detachable redeemable warrants will expire worthless and no distributable redeemable warrants will have been issued.

We anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If we decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial business combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our detachable redeemable warrants will expire worthless and no distributable redeemable warrants will have been issued. Please see “— Risks Relating to our Securities — If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.

We may have a limited ability to assess the management of a prospective target business and, as a result, may affect our initial business combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company.

When evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess the target business’s management may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target business’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target business’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly, any stockholders or warrant holders who choose to remain a stockholder or warrant holder following our initial business combination could suffer a reduction in the value of their securities. Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value.

We may issue notes or other debt securities, or otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition and thus negatively impact the value of our stockholders’ investment in us.

Although we have no commitments as of the date of this Annual Report to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to incur substantial debt to complete our initial business combination. We have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the trust account. As such, no issuance of debt will affect the per share amount available for redemption from the trust account. Nevertheless, the incurrence of debt could have a variety of negative effects, including:

default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;

acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;


our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;

our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt security is outstanding;

our inability to pay dividends on our common stock;

using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;

limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;

increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and

limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.

We may only be able to complete one business combination with the proceeds of the IPO and the sale of the private placement warrants to the sponsor, which will cause us to be solely dependent on a single business which may have a limited number of products or services. This lack of diversification may materially negatively impact our operations and profitability.

The net proceeds from the IPO, the sale of the private placement warrants to the sponsor and the partial exercise of the over-allotment option provided us with approximately $404.2 million that we may use to complete our initial business combination (which includes approximately $18.2 million of deferred underwriting commissions being held in the trust account).

We may effectuate our initial business combination with a single target business or multiple target businesses simultaneously or within a short period of time. However, we may not be able to effectuate our initial business combination with more than one target business because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By completing our initial business combination with only a single entity our lack of diversification may subject us to numerous economic, competitive and regulatory risks. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different areas of a single industry. Accordingly, the prospects for our success may be:

solely dependent upon the performance of a single business, property or asset; or

dependent upon the development or market acceptance of a single or limited number of products, processes or services.

This lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.


We may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise to increased costs and risks that could negatively impact our operations and profitability.

If we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete our initial business combination. With multiple business combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.

We may attempt to complete our initial business combination with a private company about which little information is available, which may result in a business combination with a company that is not as profitable as we suspected, if at all.

In pursuing our acquisition strategy, we may seek to effectuate our initial business combination with a privately held company. Very little public information generally exists about private companies, and we could be required to make our decision on whether to pursue a potential initial business combination on the basis of limited information, which may result in a business combination with a company that is not as profitable as we suspected, if at all.

We do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete our initial business combination with which a substantial majority of our stockholders do not agree.

Our amended and restated certificate of incorporation does not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that would cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 (such that we do not then become subject to the SEC’s “penny stock” rules), or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. As a result, we may be able to complete our initial business combination even though a substantial majority of our public stockholders do not agree with the transaction and have redeemed their shares or, if we seek stockholder approval of our initial business combination and do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, officers, directors, advisors or any of their respective affiliates. In the event the aggregate cash consideration we would be required to pay for all shares of common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, all shares of common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.

In order to effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments, including their warrant agreements. We cannot assure you that we will not seek to amend our amended and restated certificate of incorporation or governing instruments, including our warrant agreement, in a manner that will make it easier for us to complete our initial business combination that some of our stockholders or warrant holders may not support.

In order to effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments, including their warrant agreements. For example, blank check companies have amended the definition of business combination, increased redemption thresholds, extended the time to consummate an initial business combination and, with respect to their warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities. We cannot assure you that we will not seek to amend our charter or governing instruments or extend the time to consummate an initial business combination in order to effectuate our initial business combination.


Certain provisions of our amended and restated certificate of incorporation that relate to our pre-business combination activity (and corresponding provisions of the agreement governing the release of funds from our trust account) may be amended with the approval of holders of not less than 65% of our common stock, which is a lower amendment threshold than that of some other blank check companies. It may be easier for us, therefore, to amend our amended and restated certificate of incorporation and the trust agreement to facilitate the completion of an initial business combination that some of our stockholders may not support.

Our amended and restated certificate of incorporation provides that any of its provisions (other than amendments relating to the appointment of directors, which require the approval by the holders of at least 90% of our common stock entitled to vote thereon) related to pre-business combination activity (including the requirement to deposit proceeds of the IPO and the private placement warrants sale to the sponsor into the trust account and not release such amounts, except in specified circumstances and tobylaws provide redemption rights to public stockholders as described herein) may be amended if approved by holders of at least 65% of our common stock, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of 65% of our common stock. In all other instances, our amended and restated certificate of incorporation provides that it may be amended by holders of a majority of our common stock, subject to applicable provisions of the DGCL, or applicable stock exchange rules. We may not issue additional securities that can vote on amendments to our amended and restated certificate of incorporation or on our initial business combination. Our initial stockholders, who beneficially own 20% of our common stock, may participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated certificate of incorporation which will govern our pre-business combination behavior more easily than some other blank check companies, and this may increase our ability to complete our initial business combination with which you do not agree. Our stockholders may pursue remedies against us for any breach of our amended and restated certificate of incorporation.

Our sponsor, officers and directors have agreed, pursuant to a written agreement, that they will not propose any amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide holders of our Class A common stock the right to have their shares redeemed or to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of the IPO, or with respect to any other material provision relating to stockholder rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, divided by the number of then outstanding public shares. These agreements are contained in a letter agreement that we have entered into with our sponsor, officers and directors. Our stockholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against our sponsor, officers or directors for any breach of these agreements. As a result, in the event of a breach, our stockholders would need to pursue a stockholder derivative action, subject to applicable law.

Certain agreements related to the IPO may be amended without stockholder approval.

Certain agreements, including the underwriting agreement relating to the IPO, the letter agreement among us and our sponsor, officers and directors, and the registration rights agreement among us and our initial stockholders, may be amended without stockholder approval. These agreements contain various provisions that our public stockholders might deem to be material. It may be possible that our board, in exercising its business judgment and subject to its fiduciary duties, chooses to approve one or more amendments to any such agreement in connection with the consummation of our initial business combination. Any such amendments would not require approval from our stockholders, may result in the completion of our initial business combination that may not otherwise have been possible, and may have an adverse effect on the value of an investment in our securities.


We may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon a particular business combination.

Although we believe that the net proceedsCourt of the IPO and the sale of the private placement warrants to the sponsor and the forward purchase shares will be sufficient to allow us to complete our initial business combination, we cannot ascertain the capital requirements for any particular transaction. If the net proceeds of the IPO and the sale of the private placement warrants and the forward purchase shares prove to be insufficient, either because of the size of our initial business combination, the depletion of the available net proceeds in search of a target business, the obligation to redeem for cash a significant number of shares from stockholders who elect redemption in connection with our initial business combination or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing (including from Starboard) or to abandon the proposed business combination. We cannot assure you that such financing will be available on acceptable terms, if at all. Starboard is not obligated to provide, or seek, any such financing or, except as expressly set forth herein, to provide any other services to us. To the extent that additional financing proves to be unavailable when needed to complete our initial business combination, we would be compelled to either restructure the transaction or abandon that particular business combination and seek an alternative target business candidate. In addition, even if we do not need additional financing to complete our initial business combination, we may require such financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business. None of our officers, directors or stockholders is required to provide any financing to us in connection with or after our initial business combination. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account, and our detachable redeemable warrants will expire worthless and no distributable redeemable warrants will have been issued.

Because we must furnish our stockholders with target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective target businesses.

The federal proxy rules require that a proxy statement with respect to a vote on a business combination include historical and/or pro forma financial statement disclosure. We will include the same financial statement disclosure in connection with our tender offer documents, whether or not they are required under the tender offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled to, GAAP or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards of the PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such financial statements in time for us to disclose such financial statements in accordance with federal proxy rules and complete our initial business combination within 24 months from the closing of the IPO.

Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources, and increase the time and costs of completing an initial business combination.

Section 404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending December 31, 2021. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. Further, for as long as we remain an emerging growth company, we will not be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target business with which we seek to complete our initial business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such initial business combination.

If our management team pursues a company with operations or opportunities outside of the United States for our initial business combination, we may face additional burdens in connection with investigating, agreeing to and completing such combination, and if we effect such initial business combination, we would be subject to a variety of additional risks that may negatively impact our operations.

If our management team pursues a company with operations or opportunities outside of the United States for our initial business combination, we would be subject to risks associated with cross-border business combinations, including in connection with investigating, agreeing to and completing our initial business combination, conducting due diligence in a foreign jurisdiction, having such transaction approved by any local governments, regulators or agencies and changes in the purchase price based on fluctuations in foreign exchange rates.


If we effect our initial business combination with such a company, we would be subject to any special considerations or risks associated with companies operating in an international setting, including any of the following:

costs and difficulties inherent in managing cross-border business operations and complying with commercial and legal requirements of overseas markets;

rules and regulations regarding currency redemption;

complex corporate withholding taxes on individuals;

laws governing the manner in which future business combinations may be effected;

tariffs and trade barriers;

regulations related to customs and import/export matters;

longer payment cycles;

tax consequences;

currency fluctuations and exchange controls;

rates of inflation;

challenges in collecting accounts receivable;

cultural and language differences;

employment regulations;

crime, strikes, riots, civil disturbances, terrorist attacks, natural disasters and wars;

deterioration of political relations with the United States;

obligatory military service by personnel; and

government appropriation of assets.

We may not be able to adequately address these additional risks. If we were unable to do so, we may be unable to complete such initial business combination or, if we complete such initial business combination, our operations might suffer, either of which may adversely impact our business, results of operations and financial condition.

If our management following our initial business combination is unfamiliar with U.S. securities laws, they may have to expend time and resources becoming familiar with such laws, which could lead to various regulatory issues.

Following our initial business combination, any or all of our management could resign from their positions as officers or directors of the company, and the management of the target business at the time of the business combination could remain in place. Management of the target business may not be familiar with U.S. securities laws. If new management is unfamiliar with U.S. securities laws, they may have to expend time and resources becoming familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our operations.


Risks Relating to our Securities

If a stockholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.

We will comply with the tender offer rules or proxy rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance with these rules, if a stockholder fails to receive our tender offer or proxy materials, as applicable, such stockholder may not become aware of the opportunity to redeem its shares. In addition, the tender offer documents or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures that must be complied with in order to validly tender or redeem public shares. For example, we may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer or proxy materials documents mailed to such holders, or up to two business days prior to the initially scheduled vote on the proposal to approve the initial business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically. In addition, we will require that beneficial holders identify themselves. In the event that a stockholder fails to comply with these procedures, its shares may not be redeemed. Please see “Item 1. Business—Tendering Stock Certificates in Connection with a Tender Offer or Redemption Rights.”

You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your public shares or warrants, potentially at a loss.

Our public stockholders will be entitled to receive funds from the trust account only upon the earlier to occur of: (1) the completion of our initial business combination, and then only in connection with those shares of Class A common stock that such stockholder properly elected to redeem, subject to the limitations described herein; (2) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide holders of our Class A common stock the right to have their shares redeemed or to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of the IPO, or with respect to any other material provision relating to stockholder rights or pre-initial business combination activity; and (3) the redemption of all of our public shares if we are unable to complete our initial business combination within 24 months from the closing of the IPO, subject to applicable law and as further described herein. In addition, if we are unable to complete an initial business combination within 24 months from the closing of the IPO for any reason, compliance with Delaware law may require that we submit a plan of dissolution to our then-existing stockholders for approval prior to the distribution of the proceeds held in our trust account. In that case, public stockholders may be forced to wait beyond 24 months from the closing of the IPO before they receive funds from our trust account. In no other circumstances will a public stockholder have any right or interest of any kind in the trust account. Holders of redeemable warrants will not have any right to the proceeds held in the trust account with respect to such warrants. Accordingly, to liquidate your investment, you may be forced to sell your public shares or redeemable warrants, potentially at a loss.

Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

Our units, Class A common stock and detachable redeemable warrants are listed on Nasdaq. However, we cannot assure you that our securities will continue to be listed on Nasdaq in the future or prior to our initial business combination. In order to continue listing our securities on Nasdaq prior to our initial business combination, we must maintain certain financial, distribution and stock price levels. In general, we must maintain a minimum number of holders of our securities. Additionally, in connection with our initial business combination, we will be required to demonstrate compliance with Nasdaq’s initial listing requirements, which are more rigorous than Nasdaq’s continued listing requirements, in order to continue to maintain the listing of our securities on Nasdaq. For instance, our stock price would generally be required to be at least $4 per share. We cannot assure you that we will be able to meet those initial listing requirements at that time.


If Nasdaq delists any of our securities from trading on its exchange and we are not able to list such securities on another national securities exchange, we expect such securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:

a limited availability of market quotations for our securities;

reduced liquidity for our securities;

a determination that our Class A common stock is a “penny stock” which will require brokers trading in our Class A common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

a limited amount of news and analyst coverage; and

a decreased ability to issue additional securities or obtain additional financing in the future.

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Our units, Class A common stock and redeemable warrants are listed on Nasdaq and, as a result, qualify as covered securities under such statute. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer listed on Nasdaq, our securities would not qualify as covered securities under such statute and we would be subject to regulation in each state in which we offer our securities.

If we seek stockholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of stockholders are deemed to hold in excess of 15% of our Class A common stock, you will lose the ability to redeem all such shares in excess of 15% of our Class A common stock.

If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in the IPO, without our prior consent, which we refer to as the “Excess Shares.” However, our amended and restated certificate of incorporation does not restrict our 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. As a result, you will continue to hold the Excess Shares and, in order to dispose of such shares, would be required to sell your Excess Shares in open market transactions, potentially at a loss.


If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per share redemption amount received by stockholders may be less than $10.00 per share.

Our placing of funds in the trust account may not protect those funds from third-party claims against us. Although we seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain 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. Making such a request of potential target businesses may make our acquisition proposal less attractive to them and, to the extent prospective target businesses refuse to execute such a waiver, it may limit the field of potential target businesses that we might pursue. 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 we are 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 24 months from the closing of the IPO, 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 the 10 years following redemption. Accordingly, the per share redemption amount received by public stockholders could be less than the $10.00 per share initially held in the trust account, due to claims of such creditors.

Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below: (1) $10.00 per public share; or (2) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in the value of the trust assets, in each case net of permitted withdrawals, except as to any claims by a third party that executed a waiver of any and all rights to the monies held in the trust account (whether any such waiver is enforceable) and except as to any claims under our indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and we have not asked our sponsor to reserve for such indemnification obligations. As a result, if any such claims were successfully made against the trust account, the funds available for our initial business combination and redemptions could be reduced to less than $10.00 per public share. In such event, we may not be able to complete our initial business combination, and you would receive such lesser amount per share in connection with any redemption of your public shares. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

Our independent directors may decide not to enforce the indemnification obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to our public stockholders.

In the event that the proceeds in the trust account are reduced below the lesser of: (1) $10.00 per public share; or (2) the actual amount per share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in the value of the trust assets, in each case net of permitted withdrawals, and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in certain instances. For example, the cost of such legal action may be deemed by the independent directors to be too high relative to the amount recoverable or the independent directors may determine that a favorable outcome is not likely. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to our public stockholders may be reduced below $10.00 per share.


Our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.

Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within 24 months from the closing of the IPO may be considered a liquidating distribution under Delaware law. If a corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. However, it is our intention to redeem our public shares as soon as reasonably possible following the 24th month from the closing of the IPO in the event we do not complete our initial business combination and, therefore, we do not intend to comply with the foregoing procedures.

Because we do not intend to comply with 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 only likely claims to arise would be from our vendors (such as lawyers, investment bankers, consultants, etc.) or prospective target businesses. 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’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be barred after the third anniversary of the dissolution. We cannot assure you that we will properly assess all claims that may be potentially brought against us. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend beyond the third anniversary of such date. Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within 24 months from the closing of the IPO is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful, 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.


We have not registered the shares of Class A common stock issuable upon exercise of the redeemable warrants under the Securities Act or any state securities laws at this time, and such registration may not be in place when an investor desires to exercise redeemable warrants, thus precluding such investor from being able to exercise its warrants except on a “cashless basis” and potentially causing such warrants to expire worthless.

We have not registered the shares of Class A common stock issuable upon exercise of the redeemable warrants under the Securities Act or any state securities laws at this time. However, under the terms of the warrant agreement, we have agreed that as soon as practicable, but in no event later than 15 business days after the closing of our initial business combination, we will use our reasonable best efforts to file with the SEC, and within 60 business days following our initial business combination to have declared effective, a registration statement covering the issuance of the shares of Class A common stock issuable upon exercise of the redeemable warrants and to maintain a current prospectus relating to those shares of Class A common stock until the redeemable warrants expire or are redeemed. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current, complete or correct or the SEC issues a stop order. If the shares issuable upon exercise of the redeemable 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 for cash or on a 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 or qualification is available. Notwithstanding the above, if our Class A common stock is at the time of any exercise of a redeemable warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of redeemable warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will use our reasonable best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In no event will we be required to net cash settle any redeemable warrant, or issue securities or other compensation in exchange for the redeemable warrants in the event that we are unable to register or qualify the shares underlying the redeemable warrants under applicable state securities laws and no exemption is available. If the issuance of the shares upon exercise of the redeemable warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant shall not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired their redeemable warrants as part of a purchase of units will have paid the full unit purchase price solely for the shares of Class A common stock included in the units. If and when the redeemable warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying shares of Class A common stock for sale under all applicable state securities laws.

The grant of registration rights to our initial stockholders and their permitted transferees and holders of our forward purchase shares may make it more difficult to complete our initial business combination, and the future exercise of such rights may adversely affect the market price of our Class A common stock.

Pursuant to an agreement entered into concurrently with the IPO, our initial stockholders and their permitted transferees can demand that we register the resale of their founder shares after those shares convert to shares of our Class A common stock at the time of our initial business combination. In addition, our sponsor and its permitted transferees or, in the case of any private placement warrants issued to the forward purchasers, the forward purchasers and their permitted transferees, can demand that we register the resale of the private placement warrants and the shares of Class A common stock issuable upon exercise of the private placement warrants, and holders of warrants that may be issued upon conversion of working capital loans may demand that we register the resale of such warrants or the Class A common stock issuable upon exercise of such warrants. Pursuant to the forward purchase agreement, we will use our commercially reasonable efforts to file within 30 days after the closing of our initial business combination a registration statement with the SEC for a secondary offering of the forward purchase shares and use our best efforts to cause such registration statement to be declared effective promptly thereafter, but in no event later than 60 days. We will bear the cost of registering these securities. The registration and availability of such a significant number of securities for trading in the public market 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 complete. 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 the common stock owned by our initial stockholders or their permitted transferees, the forward purchase shares, the private placement warrants owned by our sponsor, warrants issued in connection with working capital loans or the securities held by holders of our forward purchase shares are registered for resale.

Our initial stockholders control the election of our board of directors until consummation of our initial business combination and hold a substantial interest in us. As a result, they will elect all of our directors prior to the consummation of our initial business combination and may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support.

Our initial stockholders own 20% of our outstanding common stock. In addition, the founder shares, all of which are held by our initial stockholders, entitle the holders to elect all of our directors prior to the consummation of our initial business combination. Holders of our public shares have no right to vote on the election of directors during such time. In addition, prior to the completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason. These provisions of our amended and restated certificate of incorporation may only be amended by the holders of at least 90% of our common stock entitled to vote thereon. As a result, you will not have any influence over the election of directors prior to our initial business combination.


Neither our initial stockholders nor, to our knowledge, any of our officers or directors, have any current intention to purchase additional securities, other than as disclosed in this Annual Report. Factors that would be considered in making such additional purchases would include consideration of the current trading price of our Class A common stock. In addition, as a result of their substantial ownership in our company, our initial stockholders may exert a substantial influence on other actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments to our amended and restated certificate of incorporation and approval of major corporate transactions. If our initial stockholders purchase any additional shares of common stock in the aftermarket or in privately negotiated transactions, this would increase their influence over these actions. The forward purchase shares will not be issued until completion of our initial business combination and, accordingly, will not be included in any stockholder vote until such time. Accordingly, our initial stockholders will exert significant influence over actions requiring a stockholder vote. Please see “Item 1. Business—Permitted Purchases of our Securities.”

We may amend the terms of the redeemable warrants in a manner that may be adverse to holders of such warrants with the approval by the holders of at least 50% of the then outstanding redeemable warrants. As a result, the exercise price of your redeemable warrants could be increased, the redeemable warrants could be converted into cash or stock (at a ratio different than initially provided), the exercise period could be shortened and the number of shares of our Class A common stock purchasable upon exercise of a redeemable warrant could be decreased, all without your approval.

Our redeemable warrants were issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that the terms of the redeemable warrants may be amended without the consent of any holder to cure any ambiguity, mistake (including to conform the warrant agreement to the description thereof herein) or correct any defective provision, but requires the approval by the holders of at least 50% of the then outstanding redeemable warrants to make any change that adversely affects the interests of the registered holders of such warrants. Accordingly, we may amend the terms of the redeemable warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding redeemable warrants approve of such amendment and, solely with respect to any amendment to the terms of the private placement warrants or any provision of the warrant agreement with respect to the private placement warrants, 50% of the number of the then outstanding private placement warrants. Although our ability to amend the terms of the redeemable warrants with the consent of at least 50% of the then outstanding redeemable warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash or stock (at a ratio different than initially provided), shorten the exercise period or decrease the number of shares of our common stock purchasable upon exercise of a warrant. Our initial stockholders may purchase redeemable warrants with the intention of reducing the number of redeemable warrants outstanding or to vote such warrants on any matters submitted to warrantholders for approval, including amending the terms of the redeemable warrants in a manner adverse to the interests of the registered holders of redeemable warrants. While our initial stockholders have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for such transactions, there is no limit on the number of our redeemable warrants that our initial stockholders may purchase and it is not currently known how many redeemable warrants, if any, our initial stockholders may hold at the time of our initial business combination or at any other time during which the terms of the redeemable warrants may be proposed to be amended. Please see “Item 1. Business—Permitted Purchases of our Securities.”

Our warrant agreement designates the courtsChancery of the State of New York or the United States District Court for the Southern District of New York asDelaware is the sole and exclusive forum for certain types of actionssubstantially all disputes between us and proceedings that may be initiated by holders of our warrants,shareholders, which could limit thelimits our shareholders’ ability of warrant holders to obtain a favorable judicial forum for disputes with us or our company.

directors, officers or employees.


Our warrant agreement providescertificate of incorporation and our bylaws provide that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relatingunless we consent in any waywriting to the warrant agreement, including underselection of an alternative forum, the Securities Act, will be brought and enforcedCourt of Chancery (the “Chancery Court”) of the State of Delaware (or, in the event that the Chancery Court does not have jurisdiction, the federal district court for the District of Delaware or other state courts of the State of New York orDelaware) shall, to the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shallfullest extent permitted by law, be the sole and exclusive forum forfor: (a) any suchderivative action, suit or proceeding brought on our behalf; (b) any action, suit or claim. We will waiveproceeding asserting a claim of breach of fiduciary duty owed by any objectionof our directors, officers or employees to such exclusive jurisdiction and that such courts represent an inconvenient forum.


us or to our shareholders; (c) any action, suit or proceeding asserting a claim arising pursuant to the DGCL, our certificate of incorporation or our bylaws; or (d) any action, suit or proceeding asserting a claim governed by the internal affairs doctrine. Notwithstanding the foregoing, thesesuch forum selection provisions of the warrant agreement willshall not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States have exclusive jurisdiction. The choice of America are the sole and exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and to have consented to the forum provisions in our warrant agreement. If any action, the subject matter of which is within the scope of the forum provisions of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of our warrants, such holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.

This choice-of-forum provision may limit a warrant holder’sshareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our company,directors, officers or other employees, which may discourage such lawsuits.lawsuits against us and our directors, officers and other employees. Alternatively, if a court were to find thisthe choice of forum provision contained in our certificate of our warrant agreementincorporation to be inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings,in an action, we may incur additional costs associated with resolving such mattersaction in other jurisdictions, which could materially and adversely affectharm our business, financial condition and results of operations and result in a diversionfinancial condition.


Additionally, Section 22 of the timeSecurities Act creates concurrent jurisdiction for federal and resourcesstate courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. As noted above, our certificate of incorporation and our management and board of directors.

We may redeem your unexpired redeemable warrants prior to their exercise at a time that is disadvantageous to you, thereby making such warrants worthless.

We have the ability to redeem outstanding redeemable warrants at any time after they become exercisable and prior to their expiration, at a price of  $0.01 per warrant, providedbylaws provide that the last sale pricefederal district courts of the United States shall have jurisdiction over any action arising under the Securities Act. Accordingly, there is uncertainty as to whether a court would enforce such provision. Our shareholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.

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We do not intend to pay dividends on our Class A common stock equalsfor the foreseeable future.

We have never declared or exceeds $18.00 per share (as adjusted for stock splits, stockpaid any cash dividends reorganizations, recapitalizationson our capital stock. We currently intend to retain all available funds and future earnings, if any, to fund the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date we send the notice of redemption to the warrant holders. Ifdevelopment and when the redeemable warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemptiongrowth of the outstanding warrants could force you to: (1) exercise your redeemable warrantsbusiness, and pay the exercise price therefor at a time when it may be disadvantageous for you totherefore, do so (2) sell your redeemable warrants at the then-current market price when you might otherwise wish to hold your redeemable warrants;not anticipate declaring or (3) accept the nominal redemption price which, at the time the outstanding redeemable warrants are called for redemption, is likely to be substantially less than the market value of your redeemable warrants.

In addition, we may redeem your redeemable warrants after they become exercisable for $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their redeemable warrants prior to redemption for a number of Class A common stock determined basedpaying any cash dividends on the redemption date and the fair market value of our Class A common stock. Any such redemption may have similar consequences to a cash redemption described above. In addition, such redemption may occur at a time when the redeemable warrants are “out-of-the-money,” in which case you would lose any potential embedded value from a subsequent increase in the value of the Class A common stock had your warrants remained outstanding.

Our redeemable warrants and founder shares may have an adverse effect on the market price of our Class A common stock and make it more difficult to effectuate our initial business combination.

We issued detachable redeemable warrants to purchase 6,737,242 shares of our Class A common stock in the IPO, and will also be distributing warrants (whichforeseeable future. Any future determination related to our dividend policy will be made at the discretion of our board of directors after considering our business prospects, results of operations, financial condition, cash requirements and availability, debt repayment obligations, capital expenditure needs, contractual restrictions, covenants in the formagreements governing current and future indebtedness, industry trends, the provisions of distributable redeemable warrantsDelaware law affecting the payment of dividends and distributions to shareholders, REIT status, and any other factors or considerations the extent any public stockholders redeemboard of directors deems relevant.


The BC Stockholder and the Medina Stockholder own a substantial amount of equity interests in us, and have other substantial interests in us and agreements with us, and may have conflicts of interest with us or the other holders of our capital stock.

Effective July 29, 2022, the SIS interest in the Company’s Class A common stock was distributed to BC Partners, Medina Capital, and other owners of SIS, resulting in connection with the initial business combination, distributable redeemable warrants and private placement warrants) to purchase 6,737,242 shares of our Class A common stock in connection with the closing of our initial business combination, each at a price of  $11.50 per whole share (subject to adjustment as provided herein). Simultaneously with the closingBC Stockholder owning 38.0% of the IPO and the exercise of the underwriters’ over-allotment option, we also issued an aggregate of 6,723,127 private placement warrants, each exercisable to purchase one share of Class A common stock at a price of  $11.50 per share, subject to adjustment as provided herein. Our initial stockholders currently hold 10,105,863 founder shares. The founder shares are convertible into shares of Class A common stock on a one-for-one basis, subject to adjustment as set forth herein. In addition, if our sponsor, Starboard or certain of our officers and directors make any working capital loans, up to $1.5 million of such loans may be converted into warrants, at the price of $1.50 per warrant, at the option of the lender. Such warrants would be identical to the private placement warrants.


To the extent we issue shares of Class A common stock to effectuate a business transaction, the potential for the issuance of a substantial number of additional shares of Class A common stock upon exercise of these warrants or conversion rights could make us a less attractive acquisition vehicle to a target business. Any such issuance will increase the number of outstanding shares of ourCompany’s Class A common stock and reduce the valueMedina Stockholder owing 12.8% of the Company’s Class A common stock issued to completestock. SIS, the business transaction. Therefore, our warrants and founder shares may make it more difficult to effectuate a business combination or increase the cost of acquiring the target business.

The private placement warrants issued to the sponsorBC Stockholder and the private placement warrants issuedMedina Stockholder are parties to the forward purchasers are identical to the redeemable warrants solda Stockholders Agreement, dated July 29, 2021 (the “Stockholders Agreement”), and, as part of the units in the IPO except that, so long as they are held by our sponsor or its permitted transferees or, in the case of any private placement warrants issued to the forward purchasers, held by our forward purchasers or their permitted transferrees: (1) they will not be redeemable by us, except as otherwise set forth herein; (2) they (including the Class A common stock issuable upon exercise of these warrants) may not,a result thereof, subject to certain limited exceptions,circumstances, have the right to appoint three individuals to the combined company’s board of directors, none of whom is required to be transferred, assigned or sold by our sponsor ordeemed “independent” (collectively, the forward purchasers,“Seller Designees”) until 2024. The current Seller Designees are Manuel D. Medina, Benjamin Phillips, and Fahim Ahmed.


As long as applicable, until 30 days after the completionBC Stockholder and Medina Stockholder own a significant percentage of our initial business combination; (3)outstanding voting power, they may be exercised bywill have the holders on a cashless basis;ability to significantly influence corporate actions requiring shareholder approval, including the election and (4) the holders thereof  (including with respect to the sharesremoval of common stock issuable upon exercise of these warrants) are entitled to registration rights.

Because each unit contains one-sixth of one warrant and only a whole warrant may be exercised, the units may be worth less than units of other blank check companies.

Each unit contains one-sixth of one detachable redeemable warrant. Because, pursuant to the warrant agreement, the redeemable warrants may only be exercised for a whole number of shares, only a whole warrant may be exercised at any given time. While holders of units (or the underlying shares of Class A common stock) who elect not to redeem such shares in connection with our initial business combination will also receive a distribution of redeemable warrants in the form of distributable redeemable warrants, it is likely that the number of distributable redeemable warrants issued to any such holder will not be a whole number. This is different from other offerings similar to ours whose units include one share of common stock and one warrant to purchase one whole share. We have established the components of the units in this way in order to reduce the dilutive effect of the warrants upon completion of a business combination since the detachable redeemable warrants and distributable warrants will be exercisable in the aggregate for one-third of the number of shares compared to units that each contain a warrant to purchase one whole share, thus making us, we believe, a more attractive merger partner for target businesses. Nevertheless, this unit structure may cause our units to be worth less than if they included a warrant to purchase one whole share.

A provision in our warrant agreement may make it more difficult for us to consummate an initial business combination.

Unlike most blank check companies, if  (i) we issue additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.20 per share (with such issue price or effective issue price to be determined in good faith by us and, (i) in the case of any such issuance to our sponsor or its affiliates, without taking into account any founder shares held by our sponsor or such affiliates, as applicable, prior to such issuance, and (ii) without taking into account (A) the transfer of founder shares or private placement warrants (including if such transfer is effectuated as a surrender to us and subsequent reissuance by us) by our sponsor in connection with such issuance) or (B) any private placement warrants issued pursuant to the forward purchase agreement (the “Newly Issued Price”), (ii) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and (iii) the Market Value is below $9.20 per share, then the exercise price of the warrants will be adjusted to be equal to 115% of the higher of the Market Valuedirectors and the Newly Issued Price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price. This may make it more difficult for us to consummate an initial business combination with a target business.


Provisions in our amended and restated certificate of incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A common stock and could entrench management.

Our amended and restated certificate of incorporation contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. These provisions include the abilitysize of the board of directors and any amendment to designateour charter and our bylaws. In addition, the termsBC Stockholder and the Medina Stockholder may have substantial influence over our decisions, including without limitation decisions relating to our strategy and corporate transactions, regardless of and issue new series of preferred shares, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.

Section 203 of the DGCL affects the ability of an “interested stockholder” to engage in certain business combinations, for a period of three years following the time that the stockholder becomes an “interested stockholder.” We have elected in our amended and restated certificate of incorporation not to be subject to Section 203 of the DGCL. Nevertheless, our amended and restated certificate of incorporation contains provisions that have the same effect as Section 203 of the DGCL, except that it provides that affiliateswhether other holders of our sponsor and their transferees will not be deemed to be “interested stockholders,” regardless of the percentage of our votingcapital stock owned by them, and will therefore not be subject tobelieve that any such restrictions. These charter provisions may limit the ability of third parties to acquire control of our company.

Provisions in our amended and restated certificate of incorporation and Delaware law may have the effect of discouraging lawsuits against our directors and officers.

Our amended and restated certificate of incorporation requires (unless we consent in writing to the selection if an alternative forum), to the fullest extent permitted by law, that derivative actions brought in our name, actions against directors, officers and employees for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel. This provision may have the effect of discouraging lawsuits against our directors and officers.

Risks Relating to our Sponsor and Management Team

Our officers and directors will allocate their time to other businesses thereby causing conflicts of interesttransactions are in their determination as to how much time to devote to our affairs. This conflict of interestown best interests. For example, the BC Stockholder and Medina Stockholder could have a negative impact on our ability to complete our initial business combination.

Our officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a business combination and their other responsibilities. We do not intend to have any full-time employees prior to the completion of our business combination. Each of our officers and directors is engaged in several other business endeavors for which they may be entitled to substantial compensation and our officers and directors are not obligated to contribute any specific number of hours per week to our affairs.

If our officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete our initial business combination. Please see “Item 10. Directors, Executive Officers and Corporate Governance” for a discussion of our officers’ and directors’ other business affairs.


We are dependent upon our officers and directors and their departure could adversely affect our ability to operate.

Our operations are dependent upon a relatively small group of individuals. We believe that our success depends on the continued service of our officers and directors, at least until we have completed our initial business combination. We do not have an employment agreement with, or key-man insurance on the life of any of our other directors or officers. The unexpected loss of the services of one or more of our directors or officers could have a detrimental effect on us.

Our ability to successfully effect our initial business combination and to be successful thereafter will be dependent upon 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 ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management or advisory positions following our initial business combination, we do not currently expect that any of them will do so. While we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which couldpotentially cause us to have to expend timerefrain from making acquisitions or dispositions in a manner that is not in the best interests of the BC Stockholder and resources helping them become familiar with such requirements.

In addition,Medina Stockholder or delay or prevent a change of control, even if the officerschange of control would benefit our other shareholders. Additionally, Nelson Fonseca, Randy Rowland and directors of an acquisition candidate may resign upon completionVictor Semah, each a member of our initial business combination. The departure of a business combination target’s key personnel could negatively impact the operations and profitability of our post-combination business. The role of an acquisition candidate’s key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that certain members of an acquisition candidate’s management team, will remain associated withare partners of Medina Capital.


Neither the acquisition candidate following our initial business combination, it is possible that membersBC Stockholder, Medina Stockholder nor any of the management of an acquisition candidate will not wishSeller Designees are required to remain in place. The loss of key personnel could negatively impactpresent us with transaction opportunities and may pursue them separately or otherwise compete with us.

Neither the operations and profitability of our post-combination business.

Our key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination, and a particular business combination may be conditioned on the retention or resignation of such key personnel. These agreements may cause our key personnel to have conflicts of interest in determining whether to proceed with a particular business combination.

Our key personnel may be able to remain with our company after the completion of our initial business combination only if they are able to negotiate employment or consulting agreements in connection with the business combination. Such negotiations would take place simultaneously with the negotiationBC Stockholder, Medina Stockholder nor any of the business combination and could provide for such individualsSeller Designees is obligated to receive compensation in the form of cash payments and/or our securities for services they would render topresent us after the completionwith investment opportunities. Moreover, each of the business combination. Such negotiations also could make such key personnel’s retention or resignation a condition to any such agreement. The personalBC Stockholder and financial interests of such individuals may influence their motivation in identifyingMedina Stockholder and selecting a target business. However, we believe the ability of such individuals to remain with us after the completion of our initial business combination will not be the determining factor in our decision as to whether or not we will proceed with any potential business combination. The determination as to whether any of our key personnel will remain with us will be made at the time of our initial business combination.

The officers and directors of an initial business combination candidate may resign upon completion of our initial business combination. The departure of a business combination target’s key personnel could negatively impact the operations and profitability of our post-combination business. The role of an initial business combination candidate’s key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that certain members of an acquisition candidate’s management team will remain associated with the initial business combination candidate following our initial business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place. As a result, we may need to reconstitute the management team of the post-transaction company in connection with our initial business combination, which may adversely impact our ability to complete an initial business combination in a timely manner or at all.


Certain of our officers, directors and Industry Advisors are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity or other transaction should be presented.

Until we consummate our initial business combination, we will be engaged in the business of identifying and combining with one or more businesses. Our sponsor and officers and directors are, or may in the future become, affiliated with entities (such as operating companies, investment vehicles or other blank check companies) that are engaged in a similar business. We do not have employment contracts with our officers and directors that will limit their ability to work at other businesses. As a result, our officers or directors could have conflicts of interest in determining whether to present business combination opportunities to us or to any other entity with which they may become involved.

As described in “Item 1. Business—Acquisition Process” and “Item 10. Directors, Executive Officers and Corporate Governance—Conflicts of Interest,” each of our officers and directors presently has, and any of them in the futureSeller Designees may have additional fiduciary or contractual or other obligations or duties to one or more other entitiesanother entity pursuant to which such officerit, he or directorshe is or will be required to present a business combinationtransaction opportunity to such entities.entity. Accordingly, if any of our officersthe BC Stockholder, Medina Stockholder or directorsany of the Seller Designees becomes aware of a business combinationtransaction opportunity which is suitable for one or more entitiesan entity to which it, he or she has then current fiduciary or contractual or other obligations, or duties,it, he or she will honor theseits, his or her fiduciary or contractual obligations and duties to present such business combinationtransaction opportunity to such entities first,other entity, and only present it to us if such entities rejectentity rejects the opportunity and he or she determines to present the opportunity to us (including as described in “Item 1 Business—Acquisition Process”). These conflicts may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation to us.opportunity. Our amended and restated certificate of incorporationcharter provides that we renounce our interest or expectancy in any corporate opportunity offeredof which any of the directors or officers of the combined company, or any of their respective affiliates, may become aware, except the doctrine of corporate opportunity shall apply with respect to any directorof the directors or officer unless suchofficers of the combined company only with respect to a corporate opportunity isthat was offered to such person solely and exclusively in his or her capacity as a director or officer of ourthe combined company and (a) such opportunity is one we arethe combined company is legally and contractually permitted to undertake and would otherwise

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be reasonable for usthe combined company to pursue and (b) to the extent the director or officer is permitted to refer that opportunity to usthe combined company without violating anotherany other legal obligation.

In addition, none


Additionally, affiliates of our Industry Advisorsthe BC Stockholder and Medina Stockholder are officers or directorsin the business of our company and therefore owe us no fiduciary duties as such. While we expect that they will continue to assist usmaking investments in identifying business combination targets, they have no obligation to do socompanies and may devote a substantial portion of their businessfrom time to activities unrelated to us. Our Industry Advisors may have fiduciary, contractual or other obligations or duties to other organizations to present business combination opportunities to such other organizations rather than to us. Accordingly, if any Industry Advisor becomes aware of a business combination opportunity which is suitable for one or more entities to which he has fiduciary, contractual or other obligations or duties, he will honor those obligationstime acquire and duties to present such business combination opportunity to such entities first and only present it to us if such entities reject the opportunity and he determines to present the opportunity to us. These conflicts may not be resolvedhold interests in our favor and a potential business may be presented to another entity prior to its presentation to us.

Our officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.

We have not adopted a policy that expressly prohibits our directors, officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may enter into a business combination with a target business that is affiliated with our sponsor, our directors or our our officers. We do not have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours.

In particular, Starboard’s clients have invested, and may in the future invest, in a broad array of sectors, including those in which our company may invest. As a result, there may be substantial overlap between companies that would be a suitable business combination for us and companies that would make an attractive target for Starboard’s clients. Please see “Item 10. Directors, Executive Officers and Corporate Governance—Conflicts of Interest” for additional information.


We may engage in a business combination with one or more target businesses that have relationshipscompete directly or indirectly with entitiesus, that may be affiliated with our sponsor, officers or directors which may raise potential conflicts of interest.

In light of the involvement of our sponsor, officers and directors with other businesses, we may decide to acquire one or more businesses affiliated with or competitive with our sponsor, officers and directors, and their respective affiliates. Our directors also serve as officers and board members for other entities, including, without limitation, those described under “Item 10. Directors, Executive Officers and Corporate Governance—Conflicts of Interest.” Such entities may compete with us for business combination opportunities. Our sponsor, officers and directors are not currently aware of any specifictransaction opportunities for us to complete our initial business combination with any entities with which they are affiliated, and there have been no substantive discussions concerningor that otherwise present a business combination with any such entity or entities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria for a business combination as set forth in “Item 1. Business—Selection of a Target Business and Structuring of our Initial Business Combination” and such transaction was approved by a majority of our independent and disinterested directors. Despite our agreement to obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm, regarding the fairnessconflict to our stockholders from a financial point of view of ainterests. The BC Stockholder, the Medina Stockholder and their affiliates may also pursue transaction opportunities that may be complementary to our business combination with one or more domestic or international businesses affiliated with our sponsor, officers or directors, potential conflicts of interest still may exist and, as a result, the terms of the business combinationthose transaction opportunities may not be available to us. In addition, the BC Stockholder’s and Medina Stockholder’s affiliates’ interests in their respective portfolio companies could impact our ability to pursue transaction opportunities or otherwise present a conflict.


General Risk Factors

Our business may be adversely affected by epidemics, pandemics or other outbreaks, including the COVID-19 pandemic.

The effects of epidemics, pandemics or other outbreaks are uncertain and difficult to predict. While we did not experience significant disruptions from the COVID-19 pandemic, we have recently experienced delays in expansion projects due to supply chain issues resulting from COVID-19. If such delays worsen, or we experience significant additional delays, our financial condition, results of operations and cash flows may be harmed. We cannot predict the impact that the COVID-19 pandemic may have on our future financial condition, results of operations and cash flows due to numerous uncertainties. While many countries around the world have lifted or relaxed quarantine requirements, restrictions on travel and mass gatherings and mask mandates, there is no assurance that more strict measures will not be put in place again due to a resurgence in COVID-19 cases, including those involving new variants, which could be more contagious and deadly than prior strains, or due to any other future epidemics, pandemics or outbreaks caused by other novel viruses or bacteria. The impact of any new COVID-19 variants or the possibility of other epidemics, pandemics or outbreaks cannot be predicted at this time. Such impacts could depend on numerous factors, including the availability of vaccines, vaccination rates among the population, effectiveness of available vaccines, the response by governmental bodies and regulators, the severity of the disease caused by the variant or other virus or bacterium and the duration of any outbreak of disease due to such new variant or novel virus or bacterium. Such possible impacts could adversely impact our financial condition, business and results of operations.

We may be impacted by disruptions associated with events beyond our control, such as advantageouswar, acts of terror, political unrest, public health concerns, labor disputes or natural disasters.

We manage data centers worldwide. Our data centers could be disrupted by events beyond our control, such as war, acts of terror, political unrest, public health concerns, labor disputes or natural disasters. Any such disruption could adversely affect our ability to attract and retain customers and employees, our ability to raise capital and the operation and maintenance of our data centers. We may not be insured against all such potential losses and, if insured, the insurance proceeds that we receive may not adequately compensate it for all of our losses. Additionally, we may need to incur additional costs in the future to provide enhanced security, including cybersecurity, which could have a material adverse effect on our business and results of operations.

Adverse global economic conditions and credit market uncertainty could adversely impact our business and financial condition.

Adverse global economic conditions and uncertain conditions in the credit markets have created, and in the future may create, uncertainty and unpredictability and add risk to our public stockholders asfuture outlook. An uncertain global economy could also result in churn in our customer base, reductions in revenues from our offerings, longer sales cycles, slower adoption of new technologies and increased price competition, adversely affecting our business prospects. Customers and suppliers filing for bankruptcy can also lead to costly and time-intensive actions with adverse effects.
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Inadequate or inaccurate external and internal information, including budget and planning data, could lead to inaccurate financial forecasts and inappropriate financial decisions.

Our financial forecasts are dependent on estimates and assumptions regarding budget and planning data, market growth, foreign exchange rates and our ability to generate sufficient cash flow to reinvest in the business, fund internal growth and meet our debt obligations. Our financial projections are based on historical experience and on various other assumptions that our management believes to be reasonable under the circumstances and at the time they would be absent any conflicts of interest.

Since our initial stockholders will lose their entire investment in usare made. However, if our initialexternal and internal information is inadequate, our actual results may differ materially from our forecasts and cause us to make inappropriate financial decisions. Any material variation between our financial forecasts and our actual results may also adversely affect our future profitability, stock price and shareholder confidence.


The level of insurance coverage that we purchase may prove to be inadequate.

We carry liability, property, business combination isinterruption and other insurance policies to cover insurable risks. We select the types of insurance, the limits and the deductibles based on our specific risk profile, the cost of the insurance coverage versus its perceived benefit and general industry standards. Our insurance policies contain industry standard exclusions for events such as war and war-related events. Any of the limits of insurance that we purchase could prove to be inadequate, which could materially and adversely impact our business, financial condition and results of operations.

We may become subject to litigation, securities class action or threatened litigation which may divert management time and attention, require us to pay damages and expenses or restrict the operation of our business.

We may become subject to disputes with parties with whom we conduct business, including as a result of any breach in our security systems or downtime in our critical power and cooling systems. Any such dispute could result in litigation between us and the other parties. Whether or not completed (otherany dispute actually proceeds to litigation, we may be required to devote significant management time and attention to its resolution (through litigation, settlement or otherwise), which would detract from management’s ability to focus on our business. Any such resolution could involve the payment of damages or expenses by us, which may be significant. In addition, any such resolution could involve our agreement with terms that restrict the operation of our business.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

Our executive offices are located in Coral Gables, Florida. We own two data center facilities and lease the rest of our data center portfolio. Our owned data center facilities consist of: (1) the data center located at 9180 Commerce Center Circle and 9110 Commerce Center Circle, Highlands Ranch, Colorado; and (2) the data center located at 22995 Wilder Court, Sterling, Virginia.

Our leased data center facilities are typically leased pursuant to long-term, non-cancellable lease agreements. As of December 31, 2022, our data center leases have remaining lease terms of 1 year to 32 years, assuming the exercise of all extension options exercisable by us at our discretion. As of December 31, 2022, five of our leased facilities had a lease term expiring in less than five years, and an additional three leased facilities had lease terms expiring in less than 10 years. We believe we have good relationships with respectall of our landlords.

Management believes our properties are suitable and adequate for us to any public shares they may hold), a conflictoperate at present levels. The utilization of interest may arise in determining whether a particular business combination targetthese facilities is appropriate for our initial business combination.

In November 2019, our sponsor purchased an aggregate of 8,625,000 founder shares for an aggregate purchase price of $25,000, or approximately $0.003 per share. In June 2020, our sponsor transferred (i) 431,250 founder sharesexisting real estate requirements.

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Item 3. Legal Proceedings.

We are party to Martin D. McNulty, Jr., our Chief Executive Officer and a membervarious litigation matters incidental to the conduct of our boardbusiness. As of directorsDecember 31, 2022, we were not a party to any legal proceedings the resolution of which we believe would have a material adverse effect on our consolidated business prospects, financial condition, liquidity, results of operation, cash flows or capital levels.


Item 4. Mine Safety Disclosures.

Not Applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and (ii) 25,000 founder shares to eachIssuer Purchases of Pauline J. Brown, Michelle Felman and Lowell Robinson. In July 2020, our sponsor transferred 25,000 founder shares to Robert L. Greene. On September 9, 2020, we effected a stock dividend of 1,725,000 shares with respect to our Class B common stock, resulting in our initial stockholders holding an aggregate of 10,350,000 founder shares. An aggregate of 244,137 of such founder shares held by our sponsor and our Chief Executive Officer were forfeited upon the underwriters’ partial exercise of the over-allotment option on September 18, 2020. The number of founder shares issued was determined based on the expectation that the founder shares would represent 20% of the outstanding shares of common stock upon the completion of the IPO. The founder shares will be worthless if we do not complete an initial business combination.

In addition, our sponsor purchased an aggregate of 6,723,127 private placement warrants for a purchase price of $10,084,691, or $1.50 per warrant, that will also be worthless if we do not complete our initial business combination. Each private placement warrant entitles the holder thereof to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein.

The founder shares are identical to theEquity Securities.


Market Information

Our shares of Class A common stock includedare traded on the Nasdaq under the ticker symbol “CYXT.”

Holders of Record

As of March 13, 2023, we had 30 holders of record of our Class A common stock.

Dividends

Cyxtera has not paid any cash dividends on its shares of Class A common stock to date. The payment of any dividends is within the discretion of the board of directors. It is the present intention of the board of directors to retain all earnings, if any, for use in our business operations, and, accordingly, the board of directors does not anticipate declaring any dividends in the units soldforeseeable future.

Recent Sales of Unregistered Equity Securities

None.

Issuer Purchases of Equity Securities

None.

Stock Performance Graph

The following graph compares the cumulative total shareholder return for (i) our Class A common stock, (ii) Russell 2000 Index (“Russell 2000”) and (iii) the Standard & Poor’s SmallCap 600 Stock Index (“S&P SmallCap 600”) for the period from November 2, 2020, the first day SVAC’s Class A common stock was traded following its initial public offering, through July 29, 2021. For the period between November 2, 2020 through July 29, 2021 the figures relate to SVAC’s Class A common stock, and for the period between July 30, 2021 through December 31, 2022, the figures relate to Cyxtera’s Class A common stock. The graph assumes an initial investment in SVAC’s Class A common stock and in each of the S&P SmallCap 600 and Russell 2000 at the market close on November 2, 2020. This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of Cyxtera’s under the Securities Act or the Exchange Act.

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cyxt-20221231_g2.jpg

Securities Authorized For Issuance Under Equity Compensation Plans

The information required by Item 5 with respect to securities authorized for issuance under equity compensation plans is incorporated herein by reference to Part III, Item 12 of this Form 10-K.

Item 6. Reserved

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our financial statements and footnotes thereto included elsewhere in this Annual Report. In addition to historical financial information, the following discussion contains forward-looking statements that are based upon current plans, expectations and beliefs that involve risks and uncertainties. Our actual results and the timing of events may differ materially from those anticipated and discussed in the forward-looking statements as a result of various factors discussed in “Cautionary Note Regarding Forward-Looking Statements” and “Part I-Item 1A. Risk Factors” contained in this Annual Report and in our other reports that we file from time to time with the SEC.

Overview of Cyxtera’s Business

Cyxtera is a global data center leader in retail colocation and interconnection services. We provide an innovative suite of deeply connected and intelligently automated infrastructure and interconnection solutions to more than 2,300 leading enterprises, service providers and government agencies around the world enabling them to scale faster, meet rising consumer expectations and gain a competitive edge.

Factors Affecting Cyxtera’s Business

Impact of the Current Macroeconomic Environment
Uncertainty in the macroeconomic environment, including due to the effects of fluctuation in foreign exchange rates, the recent rise in global inflation and interest rates, supply chain disruptions, a rise in energy prices, geopolitical pressures, including the ongoing Russia-Ukraine conflict and associated global economic conditions have resulted in volatility in foreign currency, credit, equity and energy markets. If these uncertain macroeconomic conditions persist, they could have an adverse impact on our business.

Key Operational and Business Metrics

In addition to the Company’s financial results determined in accordance with US GAAP, our management uses the following key operational and business metrics to manage its data center business and to assess the results of operations:

recurring and non-recurring revenues;
bookings; and
churn.

These metrics are important indicators of the overall direction of our business, including trends in sales and the effectiveness of our operations and growth initiatives. The following table presents our recurring and nonrecurring revenues from the Company’s consolidated financial statements and certain operating metrics for each of the periods indicated, which have been derived from the Company’s internal records. These metrics may differ from those used by other companies in our industry who may define these metrics differently.

Year ended December 31,
202220212020
Revenues
Recurring revenue$710.6 $671.5 $657.4 
Non-recurring revenues35.4 32.2 33.1
Total$746.0 $703.7 $690.5 
Bookings$8.7 $8.7 $6.9 
Churn$5.9 $5.4 $6.9 

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We define these metrics as follows:

Revenues: We disaggregate revenue from contracts with customers into recurring revenues and non-recurring revenues. We derive the majority of our revenues from recurring revenue streams, consisting primarily of colocation service fees, which include fees for the licensing of space and power, and interconnection service fees. We consider our colocation service offerings recurring because customers are generally committed to such services under long term contracts, typically three years in length. Our interconnection services are typically on month-to-month contracts but are considered recurring because customers’ use of interconnection services generally remains stable over time. This is because interconnection services facilitate a customer’s full use of the colocation environment or support the business function housed within the customer’s colocation environment by establishing connections between colocation customers within our data center facilities and their preferred network service providers, low latency public cloud on-ramps and a wide range of technology and network service providers and business partners. Our colocation and interconnection service offerings are generally billed monthly and recognized ratably over the term of the contract. Our management reviews monthly recurring revenue by reference to the metric of “MRR,” which is calculated as of the last day of a given month and represents the sum of all service charges for recurring services provided during such month. Our MRR was $58.7 million, $53.5 million, and $52.9 million as of December 31, 2022, 2021 and 2020, respectively. Our non-recurring revenues are primarily composed of installation services related to a customer’s initial deployment and professional services we perform. These services are considered to be non-recurring because they are billed typically once, upon completion of the installation or the professional services work performed. The majority of these non-recurring revenues are typically billed on the first invoice distributed to the customer in connection with their initial installation. However, revenues from installation services are deferred and recognized ratably over the period of the contract term in accordance with Accounting Standard Codification (“ASC”) Topic 606 as discussed in Note 6 of our consolidated financial statements included elsewhere in this Annual Report.

Bookings: We define Bookings for a given period as the new monthly recurring service fees for colocation and interconnection services committed under service contracts during the relevant period. Bookings are measured for the respective reporting period and represent the monthly service fees - based on the service fees for one month of services - attributable to new service contracts entered into and additional services committed under existing service contracts during the relevant period. Bookings is a key performance measure that management uses to assess the productivity of our sales force and anticipate data center inventory requirements. In addition, our management considers Bookings together with Churn (described below) to anticipate future changes to MRR.

Bookings was calculated for each period presented (i.e., the years ended December 31, 2022, 2021 and 2020) and represents the new monthly recurring service fees - based on the service fees for one month of services - attributable to new service contracts and additional services committed under existing service contracts during the period presented.
During the years ended December 31, 2022, 2021 and 2020, the total amount of new monthly recurring service fees for colocation and interconnection services committed under service contracts (i.e., Bookings) during such periods totaled $8.7 million, $8.7 million, and $6.9 million respectively.

Churn: We define Churn for a given period as the decrease in MRR during the relevant period attributable to service terminations and reductions. Churn is calculated for the respective reporting period, and represents the sum of the total amount of MRR for which a service contract was terminated or reduced during the relevant period, based on the last month’s service charges. Churn is a key performance measure that management uses to assess our customer satisfaction and performance against competition. In addition, our management considers Churn together with Bookings to anticipate future changes to MRR.

As presented in the table above, Churn was calculated for each period presented (i.e., the years ended December 31, 2022, 2021 and 2020) and represents the sum of the total amount of MRR for which a service contract was terminated or reduced during the period presented.

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During the years ended December 31, 2022, 2021 and 2020, the total amount of MRR for which a service contract was terminated or reduced (i.e., Churn) during such periods totaled $5.9 million, $5.4 million, and $6.9 million, respectively.

Key Components of Results of Operations

Revenues:

We derive the majority of our revenues from recurring revenue streams, consisting primarily of colocation service fees, which include fees for the licensing of space and power, as well as interconnection service fees. Our colocation and interconnection service offerings are generally billed monthly and recognized ratably over the term of the contract. Our recurring revenues have comprised more than 95% of total revenues for each of the past three years. In addition, during 2022, 2021 and 2020, 90%, 84%, and 77%, respectively, of our Bookings came from existing customers. For purposes of calculating Bookings attributable to existing customers, an existing customer is a customer with an active service contract that executes an order for additional services. Our largest customer accounted for approximately 9% of recurring revenue for the year ended December 31, 2022, 11% of recurring revenues for the year ended December 31, 2021 and 15% of recurring revenues for the year ended December 31, 2020. Our 50 largest customers accounted for approximately 56%, 55%, and 57%, respectively, of recurring revenues for the years ended December 31, 2022, 2021 and 2020. Our interconnection revenues represented approximately 12% of total revenues for year ended December 31, 2022, and approximately 11% of total revenues for the years ended December 31, 2021 and 2020.

Our non-recurring revenues are primarily composed of installation services related to a customer’s initial deployment and professional services we perform. Non-recurring installation fees, although generally invoiced in a lump sum upon installation, are deferred and recognized ratably over the contract term. Professional service fees are also generally invoiced in a lump sum upon service delivery and are recognized in the period when the services are provided. As a percentage of total revenues, we expect non-recurring revenues to represent less than 5% of total revenues for the foreseeable future.

Operating Costs and Expenses:

Cost of Revenues, excluding Depreciation and Amortization. The largest components of our cost of revenue are rental payments related to our leased data centers; utility costs, including electricity and bandwidth access; data center employees’ salaries and benefits, including stock-based compensation, repairs and maintenance; supplies and equipment; and security. A majority of our cost of revenues is fixed in nature and are not expected to vary significantly from period to period unless we expand our existing data centers or open or acquire new data centers. However, there are certain costs that are considered more variable in nature, including utilities and supplies that are directly related to growth in our existing and new customer base. Recently, the cost of electricity has generally risen due to macroeconomic natural gas supply and demand constraints, initially beginning with inadequate natural gas reserves in Europe to meet European demand in light of sanctions on Russian natural gas supply as a result of the conflict in the Ukraine. In addition, we expect the cost of utilities, specifically electricity, will generally continue to increase in the future on a cost-per-unit or fixed basis and for growth in consumption of electricity by our customers. Furthermore, the cost of electricity is generally higher in the summer months, as compared to other times of the year. Our costs of electricity may also increase as a result of the physical effects of climate change, increased regulations driving alternative electricity generation due to environmental considerations or as a result of our election to use renewable energy sources. To the extent we incur increased utility costs, such increased costs could materially impact our financial condition, results of operations and cash flows.

Selling, General and Administrative Expenses. Our selling, general and administrative expenses consist primarily of personnel-related expenses, including salaries, benefits and stock-based compensation for our sales and marketing, executive, finance, human resources, legal and IT functions and administrative personnel, third-party professional services fees, insurance premiums and administrative-related rent expense. We also incur additional expenses as a result of operating as a public company, including expenses necessary to comply with the rules and regulations applicable to companies listed on a national securities exchange and related to compliance and reporting
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obligations pursuant to the rules and regulations of the SEC, as well as expenses for general and director and officer insurance, investor relations and professional services.

Depreciation and Amortization. Depreciation and amortization expenses are primarily composed of depreciation and amortization on our property, plant and equipment and amortization related to intangible assets.

Restructuring, Impairment, Site Closures and Related Cost. Should we commit to a plan to dispose a long-lived asset before the end of its previously estimated useful life or change its use of assets, estimated cash flows are revised accordingly. Restructuring, impairment, site closures and related costs are primarily composed of costs incurred to dispose of a long-lived asset and include an impairment charge of the leased asset, related liabilities that may arise as a result of the underlying action (such as severance), contractual obligations and other accruals associated with the site closures.

Goodwill impairment. Goodwill impairment consists of non-cash impairment charges related to goodwill. We review goodwill for impairment annually on October 1 and more frequently if events or changes in circumstances indicate an impairment may exist. If the carrying value of the reporting unit continues to exceed its fair value, the fair value of the Company’s goodwill is calculated and an impairment charge equal to the excess is recorded.

Transaction-related costs. Transaction-related costs consisted of a one-time transaction bonus paid to current and former employees and directors of Legacy Cyxtera following the consummation of the Business Combination (the “Transaction Bonus”). The Transaction Bonus was funded in full by a capital contribution from SIS, the sole stockholder of Legacy Cyxtera prior to the consummation of the Business Combination.

Interest Expense, Net. Interest expense, net is primarily composed of interest incurred under our credit facilities and on capital leases.

Other Expenses, Net. Other expenses, net primarily includes the impact of foreign currency gains and losses.

Change in Fair Value of the Warrant Liabilities. Upon the consummation of the Business Combination, Cyxtera assumed certain warrants issued by SVAC. Such warrants consisted of public warrants issued in the IPO except that: (1) only holders(the “Public Warrants”) and warrants issued by SVAC to the Sponsor and certain clients of Starboard Value LP (the “Forward Purchasers”) in private placement transactions (the “Private Placement Warrants” and, together with the Public Warrants, the “Public and Private Placement Warrants”). Warrants that were assumed in connection with the consummation of the founderBusiness Combination were initially measured at fair value at the Closing Date of the Business Combination and were subsequently remeasured at estimated fair value on a recurring basis at the end of each reporting period, with changes in estimated fair value of the respective warrant liability recognized as change of fair value of warrant liabilities in the consolidated statements of operations. In December 2021, the Company announced that it would redeem all Public Warrants and Private Placement Warrants that remained outstanding at 5:00 p.m., New York City time, on January 19, 2022. In January 2022, the remaining Public Warrants and Private Placement Warrants were either exercised by the holders, or were redeemed by the Company (see Note 13 to our audited consolidated financial statements included elsewhere in this Annual Report).
Results of Operations
The following tables set forth our consolidated results of operations for the periods presented. The period-to-period comparisons of our historical results are not necessarily indicative of the results that may be expected in the future. The results of operations data for the years ended December 31, 2022, 2021 and 2020, have been derived from our consolidated financial statements and related notes included elsewhere in this Annual Report.

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Years ended December 31, 2022 and 2021. The following table sets forth our historical operating results for the periods indicated, and the changes between periods:

Year Ended December 31,
20222021$ Change% Change
Revenues$746.0 $703.7 $42.3 %
Operating costs and expenses
Cost of revenues, excluding depreciation and amortization402.0 390.5 11.5 %
Selling, general and administrative expenses144.3 112.8 31.5 28 %
Depreciation and amortization243.0 240.6 2.4 %
Goodwill impairment153.6 — 153.6 nm
Restructuring, impairment, site closures and related costs5.2 69.8 (64.6)(93)%
Transaction-related costs— 5.2 (5.2)nm
Total operating costs and expenses948.1 818.9 129.2 16 %
Loss from operations(202.1)(115.2)(86.9)75 %
Interest expense, net(163.3)(164.9)1.6 (1)%
Other expenses, net(2.2)(0.1)(2.1)2100 %
Change in fair value of the warrant liabilities11.8 (25.5)37.3 (146)%
Loss from operations before income taxes(355.8)(305.7)(50.1)16 %
Income tax benefit0.7 47.8 (47.1)(99)%
Net loss$(355.1)$(257.9)$(97.2)38 %

nm = not meaningful

Revenues

Revenues increased by $42.3 million, or 6%, for the year ended December 31, 2022 compared to the prior year. The increase in revenue was attributable to an increase in recurring revenues due to a net increase of $22.6 million in customer activation of services and an increase of $9.6 million of variable recurring revenue compared to the prior year. Interconnection revenue increased by $6.3 million compared to the prior year, as a result of rate increases in the year.

Operating Costs and Expenses

Cost of Revenues, excluding Depreciation and Amortization

Cost of revenues, excluding depreciation and amortization, increased by $11.5 million, or 3% for the year ended December 31, 2022 compared to the prior year. This increase in cost of revenues was primarily attributable to the cost of power, as utilities expenses increased by $21.7 million during the year ended December 31, 2022 compared to the prior year. The increase of expenses was offset by our exit from the Moses Lake property, completed in the second quarter of 2021, which resulted in a reduction in rent expense of $3.2 million in 2022 compared to the prior year. Customer installation costs decreased by $7.8 million in the year ended December 31, 2022 driven by cost management efforts.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by $31.5 million, or 28%, for the year ended December 31, 2022 compared to the prior year. Personnel and related expenses increased by $19.0 million due to an increase in employee headcount and increases in stock-based compensation driven by equity awards granted in the latter half of 2021, which represented $12.0 million of the increase of payroll and related expenses. Professional services and insurance expenses increased by $12.3 million as a result of the additional costs associated with being a
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public company compared to the prior year.

Depreciation and Amortization

Depreciation and amortization increased by $2.4 million, or 1%, for the year ended December 31, 2022 compared to the prior year. The increase was primarily attributable to higher depreciation of leasehold improvements and higher finance lease asset amortization from new finance leases that commenced in the latter half of 2021 and early 2022.

Goodwill Impairment

We incurred $153.6 million of goodwill impairment of the Company in the fourth quarter of 2022. For additional details, see Note 9 - Goodwill and Intangible Assets in the notes to the consolidated financial statements, included elsewhere in this Annual Report.

Restructuring, Impairment, Site Closures and Related Costs

Restructuring, impairment, site closures and related costs decreased by $64.6 million, for the year ended December 31, 2022 compared to the prior year. In the year ended December 31, 2021, we exited the Addison office space and incurred $7.9 million in exit expenses. In June 2021, the Company ceased use of the Moses Lake property and wrote off the remaining lease obligation of $58.5 million. During the year ended December 31, 2022, the Company recognized $5.2 million of restructuring costs in connection with the Addison and Moses Lake exits.

Transaction-related costs

Transaction-related costs were $5.2 million for the year ended December 31, 2021 (and no such costs were incurred in the same period of the current year).

Interest Expense, Net

Interest expense, net, decreased by $1.6 million, or 1%, for the year ended December 31, 2022 compared to the prior year. We incurred less interest expense period over period as a result of the payoff of the 2017 Second Lien Term Facility and the pay down of the Revolving Facility and 2021 Revolving Facility in July and August 2021 following the consummation of the Business Combination.

Other Expenses, Net

Other expenses, net increased by $2.1 million, for the year ended December 31, 2022 compared to the prior year. The increase in other expenses was driven by higher unrealized losses due to foreign currency fluctuations for the year ended December 31, 2022.

Change in Fair Value of the Warrant Liabilities

For the year ended December 31, 2022, we recorded a gain of $11.8 million on our consolidated statements of operations in connection with the change of the fair value of the warrant liabilities. In December 2021, the Company announced that it would redeem all of the Public Warrants and Private Placement Warrants that remained outstanding as of the Redemption Time. Pursuant to the terms of the Warrant Agreement, prior to the Redemption Time, the warrant holders were permitted to exercise their warrants either (a) on a cash basis by paying the exercise price of $11.50 per warrant in cash or (b) on a “cashless basis,” in which case the holder would receive 0.265 shares haveof the rightCompany’s Class A common stock per warrant. On January 26, 2022, the Company announced the completion of the redemption. Of the 11,620,383 Public Warrants that were outstanding as of the time of the Business Combination, 134,443 were exercised for cash at an exercise price of $11.50 per share of Class A common stock and 10,115,180 were exercised on a cashless basis in exchange for an aggregate of 2,680,285 shares of Class A common stock, in each case in accordance with the terms of the Warrant Agreement, representing approximately
44


88% of the Public Warrants. In addition, of the 8,576,940 Private Placement Warrants that were outstanding as of the date of the Business Combination, 8,576,940 were exercised on a cashless basis in exchange for an aggregate of 2,272,884 shares of Class A common stock, in accordance with the terms of the Warrant Agreement, representing 100% of the Private Placement Warrants. Total cash proceeds generated from exercises of the warrants were $1.5 million. As of January 25, 2022, the Company had no warrants outstanding. The Company recorded a decrease in the warrant liability of $64.7 million and increase to voteadditional paid in capital of $54.2 million in connection with the warrants that were exercised.

Income Tax Benefit

The income tax benefit for the year ended December 31, 2022 and 2021, was $0.7 million and $47.8 million, respectively. The income tax benefit on the electionpre-tax loss for the year ended December 31, 2022 was different than the amount expected at the statutory federal income tax rate primarily as a result of directorsadditional state income tax benefits, an increase in the valuation allowance recorded on certain deferred tax assets, including net operating loss carryforwards and interest deduction limitation carryforwards, that management believes are not more-likely-than-not to be fully realized in future periods, nondeductible goodwill impairment loss, the effects of the change in fair value of the warrant liabilities, nondeductible equity-based compensation, and the effects of the Company’s foreign operations. The income benefit on the pre-tax loss for the year ended December 31, 2021 was different than the amount expected at the statutory federal income tax rate as a result of additional state income tax benefits, an increase in the valuation allowances recorded on certain deferred tax assets that management believes are not more-likely-than-not to be fully realized in future periods, the effects of the change in fair value of the warrant liabilities, nondeductible equity-based compensation, the remeasurement of the Company’s net deferred tax assets in the United Kingdom due to an enacted tax rate change, and the effects of the Company’s foreign operations.
Years ended December 31, 2021 and 2020. The following table sets forth our historical operating results for the periods indicated, and the changes between periods:

Year Ended December 31,
20212020$ Change% Change
Revenues$703.7 $690.5 $13.2 %
Operating costs and expenses:
Cost of revenues, excluding depreciation and amortization390.5 390.5 — — %
Selling, general and administrative expenses112.8 115.5 (2.7)(2)%
Depreciation and amortization240.6 231.8 8.8 %
Restructuring, impairment, site closures and related cost69.8 — 69.8 100 %
Transaction-related costs5.2 — 5.2 100 %
Recovery of notes receivable from affiliate— (97.7)97.7 (100)%
Total operating costs and expenses818.9 640.1 178.8 28 %
(Loss) income from operations before income taxes(115.2)50.4 (165.6)(329)%
Interest expense, net(164.9)(169.4)4.5 (3)%
Other expenses, net(0.1)(0.3)0.2 (67)%
Change in fair value of the warrant liabilities(25.5)— (25.5)100 %
Loss from operations before income taxes(305.7)(119.3)(186.4)156 %
Income tax benefit (expense)47.8 (3.5)51.3 (1466)%
Net loss$(257.9)$(122.8)$(135.1)110 %
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Revenues

Revenues increased by $13.2 million, or 2%, for the year ended December 31, 2021 as compared to the prior year. The increase in revenue is attributable to an increase in recurring revenues as a result of increased bookings and lower churn.

Operating Costs and Expenses

Cost of Revenue, excluding Depreciation and Amortization

Cost of revenues, excluding depreciation and amortization were flat at $390.5 million for the years ended December 31, 2021 and 2020. During the year ended December 31, 2020, the Company lowered headcount and external contractors across its data centers resulting in a reduction of $7.4 million in payroll and services expenses. As part of the reduction, the Company incurred severance expenses of $1.5 million during the year ended December 31, 2020. During 2021, benefit expenses were lower by $1.2 million due to lower claims period-over-period. Our exit from Moses Lake, completed in the second quarter of 2021, resulted in a reduction in rent expense of $4.4 million compared to the prior year. Customer installation costs have decreased by $8.7 million driven by cost management efforts on implementations. Security costs have decreased by $0.7 million driven by the implementation of an automated security system, leading to a reduction in the use of outside security contractors. In addition, the Company recovered $4.3 million in relation to a settlement with a vendor. These savings have been offset by an increase in utilities expense of $23.2 million and increases to data center maintenance of $1.4 million period-over-period. The increase in utility expense during 2021 is mostly driven by $3.4 million in additional electric power expenses resulting from Winter Storm Uri, which affected the grid in several markets driving a significant increase in pricing for the affected time periods, approximately $13.5 million related to rate increases, and approximately $1.9 million growth in our existing and new customer base and the remaining change related to increases in consumption.

Sales, General and Administrative Expenses

Selling, general and administrative expenses decreased by $2.7 million, or 2%, for the year ended December 31, 2021, compared to the prior year. This decrease in selling, general and administrative expenses was primarily attributable to the reversal of a $2.0 million litigation contingency as a result of a favorable settlement and a decrease in legal fees of $2.1 million. Professional fees decreased by $3.3 million year over year, primarily as a result of a decrease in pre-transaction exploratory costs incurred in late 2020 as compared to 2021. Subscription expense decreased by $1.0 million driven by better rates obtained on subscription licenses. The costs were offset by an increase to payroll related expenses of $6.7 million due to an increase in employee headcount and increases in stock compensation driven by equity awards granted following the completion of the Business Combination.

Depreciation and Amortization

Depreciation and amortization increased by $8.8 million, or 4%, for the year ended December 31, 2021, compared to the prior year. The increase to depreciation was primarily attributable to leasehold improvement additions and $1.8 million of accelerated depreciation and amortization on Moses Lake assets in connection with the decision to cease use of the data center site as further described in Note 5 to our consolidated financial statements.
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Amortization increased due to capital lease asset additions for capital leases entered in December 2020 and throughout 2021.

Restructuring, impairment, site closures and related costs

Restructuring, impairment, site closures and related costs were $69.8 million for the year ended December 31, 2021 (no such costs were incurred in the same period of the prior year). These charges are related to the Moses Lake data center facility and Addison office space closures.

Transaction-related costs

The Company paid a one-time $5.2 million Transaction Bonus related to the completion of the Business Combination for the year ended December 31, 2021 (no such costs incurred in the same period of the prior year).

Recovery of Notes Receivable from Affiliate

On March 31, 2019, Appgate, Inc., formerly known as Cyxtera Cybersecurity, Inc. (“Appgate”), issued promissory notes to each of Cyxtera and Cyxtera Management, Inc., a Delaware corporation (the “Management Company”), evidencing certain funds borrowed by Appgate from each of Cyxtera and the Management Company as well as potential future borrowings (together, the “Promissory Notes”). Appgate is an affiliate of the Company and a direct subsidiary of SIS, and through December 31, 2019, was a direct subsidiary of the Company. The Promissory Notes had a combined initial business combination; (2)aggregate principal amount of $95.2 million and provided for additional borrowings during the founder shares are subjectterm of the Promissory Notes for additional amounts not to certain transfer restrictions, as describedexceed approximately $52.5 million in more detail below; (3) our sponsor, officers and directors have entered intothe aggregate (approximately $147.7 million including the initial aggregate principal amount). Interest accrued on the unpaid principal balance of the Promissory Notes at a letter agreement with us, pursuantrate per annum equal to which they have agreed to: (a) waive their redemption rights3%; provided, that, with respect to any founder sharesday during the period from the date of the Promissory Notes through December 31, 2019, interest was calculated assuming that the unpaid principal balance of the Promissory Notes on such day is the unpaid principal amount of the notes on the last calendar day of the quarter in which such day occurs. Interest was payable upon the maturity date of the notes. Each of the Promissory Notes had an initial maturity date of March 30, 2020, and any public shares heldwas extended through March 30, 2021, by themamendments entered into effective as of March 30, 2020.

As of December 31, 2019, we had a receivable related to the Promissory Notes of $127.7 million. On December 31, 2019, Appgate spun off from Cyxtera. As of December 31, 2019, we assessed collectability of the Promissory Notes from Appgate and reserved the entire amount of $127.7 million as the balance was deemed unrecoverable. In making that determination, we considered factors such as Appgate’s operating and cash losses since the initial acquisition into the Cyxtera group in 2017 through December 31, 2019, and Appgate’s anticipated cash needs and potential access to liquidity and capital resources over the remaining term of the note based on the facts and circumstances at the time.

During the year ended December 31, 2020, we advanced $19.4 million under the Promissory Notes and recorded a provision for loan losses in the same amount based on the same factors discussed above. Accordingly, as of December 31, 2020, we had a receivable related to the Promissory Notes of $147.1 million with an allowance of $30.0 million. In addition, during the year ended December 31, 2020, we had other amounts receivable from Appgate of $3.9 million with a full reserve because of the same factors discussed above for the Promissory Notes. These other amounts include charges under the Transition Services Agreement by and between Appgate and the Management Company pursuant to which the Management Company provided certain transition services to Appgate and Appgate provided certain transition services to Cyxtera (the “Transition Services Agreement”). The Transition Services Agreement provided for a term that commenced on January 1, 2020 and was terminated on December 31, 2020.

On February 8, 2021, we received a payment of $118.2 million from Appgate against the then accumulated principal and interest under the Promissory Notes and issued a payoff letter to Appgate extinguishing the $36.1 million of principal and accrued interest balance remaining following such repayment. Of the $118.2 million payment, $1.1 million was attributed to 2020 accrued interest on the Promissory Notes and $117.1 million to the
47


recovery of a portion of the Promissory Notes’ principal and interest balance outstanding as of December 31, 2019. Accordingly, for the year ended December 31, 2020, the Company recorded a reversal of the previously established allowance of $117.1 million. During the three months ended March 31, 2021, we wrote off the ending balance of $30.0 million in the allowance for loan losses on the Promissory Notes. Accordingly, no additional changes or advances on the Promissory Notes or the allowance for loan losses occurred during the year ended December 31, 2021.

Interest Expense, Net

Interest expense, net decreased by $4.5 million, or 3%, for the year ended December 31, 2021 compared to the prior year. The decrease of interest expense of $4.5 million is due to the repayment in full of the 2017 Second Lien Term Facility, and the paying down of the Revolving Facility (as defined in “—Liquidity and Capital Resources”) and the 2021 Revolving Facility (as defined in “—Liquidity and Capital Resources”) in July and August 2021 following the consummation of the Business Combination.

Other Expenses, Net

Other expenses, net decreased by $0.2 million, or 67%, for the year ended December 31, 2021, compared to the prior year. In 2020, the Company incurred $3.4 million in realized losses related to foreign exchange rates and finance charges, offset by approximately $4.2 million in gains related to fees charged to Appgate under the Transition Services Agreement. In 2021, the Company realized $2.5 million in gains related to foreign exchange rates, offset by finance charges of $2.0 million incurred in connection with the completionfactoring arrangement entered into 2021.

Change in Fair Value of the Warrant Liabilities

For the year ended December 31, 2021, we recorded a loss of $25.5 million on our initial business combination, (b) waive their redemption rights with respect to any founder shares and public shares held by themconsolidated statement of operations in connection with the change of the fair value of the warrant liabilities. In December 2021, the Company announced that it would redeem all of the Public Warrants and Private Placement Warrants that remained outstanding as of the Redemption Time. Pursuant to the terms of the warrant agreement governing the Warrants, prior to the Redemption Time, the warrant holders were permitted to exercise their warrants either (a) on a stockholder votecash basis by paying the exercise price of $11.50 per warrant in cash or (b) on a “cashless basis,” in which case the holder would receive 0.265 shares of the Company’s Class A common stock per warrant. As of December 31, 2021, 840,456 Public Warrants were exercised in accordance with the terms of the Warrant Agreement, resulting in the issuance by us of 228,450 shares of Class A common stock. The Company recorded a decrease of the warrant liability of $2.6 million and increase to approveadditional paid in capital of $2.8 million in connection with the warrants that were exercised.

Income Tax Benefit (Expense)

The income tax benefit for the year ended December 31, 2021 was $47.8 million compared to $3.5 million of income tax expense for the prior year. The income tax benefit on the pre-tax loss for the year ended December 31, 2021 was different than the amount expected at the statutory federal income tax rate as a result of additional state income tax benefits, an increase in the valuation allowances recorded on certain deferred tax assets that management believes are not more-likely-than-not to be fully realized in future periods, the effects of the change in fair value of the warrant liabilities, nondeductible equity-based compensation, the remeasurement of the Company’s net deferred tax assets in the United Kingdom due to an enacted tax rate change, and the effects of the Company’s foreign operations. The income tax expense on the pre-tax loss for the year ended December 31, 2020 was different than the amount expected at the statutory federal income tax rate as a result of additional state income tax benefits, an increase in the valuation allowances recorded on certain deferred tax assets that management believes are not more-likely-than-not to be fully realized in future periods, non-deductible equity compensation and the effects of the Company’s foreign operations.

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Liquidity and Capital Resources

As of December 31, 2022 and 2021, we had cash of $65.1 million and $52.4 million, respectively, and had $73.1 million and $88.8 million of borrowing capacity under our $120.1 million 2021 Revolving Facility, respectively. The 2021 Revolving Facility, under which $42.0 million was drawn as of December 31, 2022, would have matured on November 1, 2023. We also have $869.0 million of term loan indebtedness under our 2017 First Lien Term Facility and our 2019 First Lien Term Facility, which mature on May 1, 2024. For additional information concerning these facilities, see below under “—Debt”. Historically, customer collections are our primary source of cash.On March 14, 2023, we entered into an amendment to our amended2021 Revolving Facility (the “Revolving Facility Amendment”) which, among other things, provided for an extension of the maturity date from November 1, 2023 to April 2, 2024, an approximately $18 million reduction to the borrowing capacity under such facility, a transition of the benchmark rate for such facility from LIBOR to SOFR, increases to the applicable interest rates for borrowings under such facility and restated certificatecertain other covenant modifications, including additional limitations on our ability to make investments and incur indebtedness. Based on our current forecast, which considers quantitative factors that are known or reasonably knowable as of incorporationthe date of these financial statements, including the Revolving Facility Amendment, we believe that the cash generated from operations will be sufficient to (A) modifyfund our operating activities for at least the substancenext twelve months from the issuance of these financial statements.

The Company is actively attempting to extend the maturity on, or timingrefinance or repay, its long-term debt to ensure it will have positive cash flow for the long-term foreseeable future. However, there can be no assurances that we will be able to raise additional capital to refinance or repay our existing debt or fund our future business activities and requirements. The inability to raise capital would adversely affect our ability to achieve our business objectives, including pursuing additional expansion opportunities. Given the current economic slowdown, some of our obligationcustomers may have difficulty paying us and we may experience increased churn in our customer base, including reductions in their commitments to provideus, and we may be unable to secure additional financing, or any such additional financing may only be available to us on unfavorable terms, all of which could have a material adverse effect on our liquidity. If the Company cannot successfully extend, refinance or repay its revolving credit facility and long-term debt with proceeds from other sources, the Company will not be able to meet its financial obligations when due in April 2024 and May 2024, respectively. As a result, the Company could be forced to consider all strategic alternatives including restructuring its debt, seeking additional debt or equity capital, reducing or delaying its business activities and strategic initiatives or selling assets, other strategic transactions and/or other measures, including liquidation or filing for bankruptcy, which could lead to material or even total losses for its security holders as it relates to their investments in the Company. See “Risk Factors—Risks Related to Our Indebtedness—If we are unable to refinance our material indebtedness with near term maturities, we could be forced to liquidate and/or file for bankruptcy, and the holders of our Class A common stock could suffer a total loss on their investment” for additional information.

In addition, we may, at any time and from time to time, seek to purchase, repay, exchange or otherwise retire our outstanding debt in open market transactions, privately negotiated transactions, tender offers, exchange offers, pursuant to the right to have their shares redeemed or to provide for the redemptionterms of our publicoutstanding debt or otherwise. We may incur additional financing to fund such transactions or otherwise, which could include substantial additional debt (including secured debt) or equity or equity-linked financing. Although the terms of the agreements governing existing debt restrict our ability to incur additional debt (including secured debt), such restrictions are subject to several exceptions and qualifications and such restrictions and qualifications may be waived or amended, and debt (including secured debt) incurred in compliance with such restrictions and qualifications (as they may be waived or amended) may be substantial. The number of shares in connection with an initial business combination or to redeem 100% of our public shares if we have not consummated our initial business combination within 24 months from the closing of the IPO,Class A common stock or (B) with respect to any other material provision relating to stockholder rights or pre-initial business combination activity; and (c) waive their rights to liquidating distributions from the trust account with respect to any founder shares held by them if we fail to complete our initial business combination within 24 months from the closing of the IPO (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within 24 months from the closing of the IPO); (4) the founder shares are automaticallysecurities convertible into shares of our Class A common stock that may be issued in connection with such transactions may be material. Such transactions, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements and cash position, contractual restrictions, trading prices of debt from time to time, and other factors. The amounts involved in any such transactions, individually or in the aggregate, may be material. In addition, from time to time we engage in discussions with holders of our initial business combination onexisting debt and other potential financing sources regarding such transactions, and we expect to continue to engage in such discussions in the future. We cannot provide any assurance as to if or when we will consummate any such transactions or the terms of any such transactions.

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Debt

On May 1, 2017, a one-for-one basis, subjectsubsidiary of the Company (the “Borrower”) entered into credit agreements for up to adjustment$1,275.0 million of borrowings under first and second lien credit facilities (together with the 2019 First Lien Term Facility and the 2021 Revolving Facility described below, collectively, the “Senior Secured Credit Facilities”). The Senior Secured Credit Facilities initially consisted of (a) a first lien credit agreement providing for (i) a $150.0 million first lien multicurrency revolving credit facility (the “Revolving Facility”) and (ii) an $815.0 million first lien term loan borrowing (the “First Lien Term Facility”) and (b) a second lien credit agreement providing for a $310.0 million second lien term loan credit borrowing (the “2017 Second Lien Term Facility”). On May 13, 2019, the Borrower borrowed an additional $100.0 million under the incremental first lien loan under the first lien credit agreement (the “2019 First Lien Term Facility”). On May 7, 2021, certain of the lenders under the Revolving Facility entered into an amendment with the Borrower pursuant to which they agreed to extend the maturity date for certain anti-dilution rights,revolving commitments from May 1, 2022 to November 1, 2023. Under the terms of the amendment, $141.3 million of commitments under the existing Revolving Facility were exchanged for $120.1 million of commitments under a new revolving facility (the “2021 Revolving Facility”). In connection with the amendment, the Borrower repaid $19.6 million of the outstanding balance under the Revolving Facility on May 10, 2021. In connection with the Business Combination, the Borrower repaid the entire balance of the 2017 Second Lien Term Facility of $310.0 million on July 29, 2021, and the remaining outstanding balance on the Revolving Facility and 2021 Revolving Facility of $123.1 million on August 13, 2021. In addition, during the year ended December 31, 2021, the Company paid down $9.2 million of principal of the First Lien Term Facility. Subsequent to the consummation of the Business Combination and the pay-down of the Revolving Facility and the 2021 Revolving Facility, the Borrower drew down an additional $40.0 million from the Revolving Facility and the 2021 Revolving Facility during the year ended December 31, 2021. Following receipt of $75.0 million in connection with the exercise of the optional shares purchase options, we repaid the entire balance owed under the Revolving Facility and the 2021 Revolving Facility of $40.0 million. The Revolving Facility matured in May 2022 and was not renewed. Subsequent to paying down of the Revolving Facility and the 2021 Revolving Facility, the Borrower drew down $42.0 million from the 2021 Revolving Facility. The 2021 Revolving Facility, the 2017 First Lien Term Facility and the 2019 First Lien Term Facility have a 18-month, seven- and five-year term, respectively, and are set to mature on November 1, 2023, May 1, 2024 and May 1, 2024, respectively. Subsequent to year-end, on March 14, 2023, we entered into the Revolving Facility Amendment which, among other things, provided for an extension of the maturity date from November 1, 2023 to April 2, 2024, an approximately $18 million reduction to the borrowing capacity under such facility, a transition of the benchmark rate for such facility from LIBOR to SOFR, increases to the applicable interest rates for borrowings under such facility and certain other covenant modifications, including additional limitations on our ability to make investments and incur indebtedness.

The Senior Secured Credit Facilities are secured by substantially all assets of the Borrower and contain customary covenants, including reporting and financial covenants, some of which require the Borrower to maintain certain financial coverage and leverage ratios, as well as customary events of default, and are guaranteed by a parent entity of the Borrower as well as certain of the Borrower’s wholly owned domestic subsidiaries. As of December 31, 2022, the Company believes the Borrower was in compliance with these covenants.

As of December 31, 2022, we had $1,121.8 million and $907.0 million in finance lease obligations and long-term debt outstanding under our Senior Secured Credit Facilities, respectively. As of December 31, 2021, we had $976.3 million and $908.3 million in capital lease obligations and long-term debt outstanding under our Senior Secured Credit Facilities, respectively.

Cash Flow

202220212020
Net cash provided by operating activities$97.4 $25.8 $116.6 
Net cash (used in) provided by investing activities(131.8)39.6 (102.6)
Net cash provided by (used in) financing activities52.2 (137.0)91.0 

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Operating Activities

Cash provided by our operations is generated by colocation service fees, which include fees for the licensing of space, power and interconnection services.

During the year ended December 31, 2022, operating activities provided $97.4 million of net cash as compared to $25.8 million during the prior year. On February 19, 2021, we repaid $22.7 million of fees related to the Structuring Fee, Service Provider Fee and other Sponsor related expenses that were owned under the Services Agreement as described herein; and (5)in Note 21 in our consolidated financial statements included elsewhere in this Annual Report. There was no such payment that occurred during the holders of founder shares are entitled to registration rights.


The personal and financial interestsyear ended December 31, 2022. On August 31, 2022, we entered into an Accounts Receivable Sales Program, as described in Note 7 of our sponsor, officers and directors may influence their motivationconsolidated financial statements included elsewhere in identifying and selectingthis Annual Report, pursuant to which we sold $37.5 million of accounts receivable in exchange for cash. While we had a target business combination, completing an initial business combination and influencingfactoring arrangement in 2021, there was no Accounts Receivable Sales Program in place for the operationsame period of the business followingprior year. The remaining change was to other changes in working capital.


Investing Activities

Our investing activities are primarily focused on capital expenditures due to expansion activities and overall modernization of our data centers.

During the initial business combination. This risk may become more acuteyear ended December 31, 2022, investing activities used $131.8 million of net cash as compared to net cash provided by $39.6 million during the deadlineprior year. The decrease in net cash provided by investing activities during the year ended December 31, 2022, was primarily due to the one-time payment of $117.1 million received from Appgate in February 2021 in settlement of the Primary Notes offset by $54.3 million in additional cash used for completingthe purchase of property and equipment during the year December 31, 2022.

Financing Activities

Our cash flow from financing activities is centered around the use of our initial business combination nears.

Our management maySenior Secured Credit Facilities and lease financings.


During the year ended December 31, 2022, financing activities provided for use of $52.2 million of net cash as compared to net cash used of $137.0 million for the prior year. The increase in net cash used from financing activities during the year ended December 31, 2022, compared to the year ended December 31, 2021, was primarily due to the receipt of $75.0 million in proceeds during 2022 from the exercise of the purchase options under the Optional Share Purchase Agreements. The cash inflows were partially offset by the paydown of $40.0 million on the Revolving Facility and the 2021 Revolving Facility and a paydown of $6.9 million in principal of the First Lien Term Facility. Since the paydown of the revolving facilities, we re-borrowed $42.0 million from the 2021 Revolving Facility. Repayments on finance leases were lower in the year ended December 31, 2022, compared to the prior year by $12.9 million, which was a result of finance leases that were modified to extend the lease terms. In the year ended December 31, 2022, we received $30.0 million in proceeds from an equipment sale-leaseback transaction compared to $5.0 million in the prior year. For the year ended December 31, 2021, we paid a one-time capital redemption payment of $97.9 million when we redeemed, cancelled and retired 9,645,455 shares of the Class A common stock of Legacy Cyxtera held by SIS in exchange for such payment by Legacy Cyxtera to SIS. In 2021, the Company also obtained a capital contribution of $5.2 million from SIS to pay the Transaction Bonus to current and former employees.

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Contractual Obligations and Commitments

Material Cash Commitments

As of December 31, 2022, our principal commitments were primarily composed of:

approximately $907.0 million of principal from the 2017 and 2019 First Lien Term Facility and balance on the 2021 Revolving Facility (net of debt issuance cost and debt discount);
approximately $1,429.1 million of total lease payments, net interest expense, which represents lease payments under finance and operating lease arrangements, including renewal options that are reasonably certain to be exercised; and
approximately $4.4 million of other non-capital purchase commitments related to IT licenses, utilities and our colocation operations. These commitments to purchase IT contractually bind us for goods, services or arrangements to be delivered or provided during 2023 and beyond.

For further information on maturities of lease liabilities and long-term debt, see Notes 11 and 12, respectively, to our consolidated financial statements included elsewhere in this Annual Report.

Based on our current forecast, which considers quantitative factors that are known or reasonably knowable as of the date of these financial statements, including the Revolving Facility Amendment, we believe that our sources of liquidity, including our expected future operating cash flows, are adequate to fund our operating activities in the next twelve months from the issuance of these financial statements. The Company is actively attempting to extend, refinance or repay its revolving credit facility and existing long-term debt that will mature in April 2024 and May 2024, respectively, to ensure it will adequately meet long-term material cash commitments for the foreseeable future. However, if the Company cannot successfully extend its revolving credit facility and long-term debt, or refinance or repay its revolving credit facility and long-term debt with proceeds from other sources, the Company will not be able to maintain controlmeet its financial obligations when due in April 2024 and May 2024, respectively, and beyond twelve months from the date of issuance of these financial statements. As a targetresult, the Company could be forced to consider all strategic alternatives including restructuring its debt, seeking additional debt or equity capital, reducing or delaying its business afteractivities and strategic initiatives or selling assets, other strategic transactions and/or other measures, including liquidation or filing for bankruptcy, which could lead to material or even total losses for its security holders as it relates to their investments in the Company. See “Risk Factors—Risks Related to Our Indebtedness—If we are unable to refinance our initial business combination. Uponmaterial indebtedness with near term maturities, we could be forced to liquidate and/or file for bankruptcy, and the holders of our Class A common stock could suffer a total loss on their investment” for additional information.

Other Contractual Obligations

Additionally, we have entered into lease agreements with various landlords primarily for data center spaces which have not yet commenced as of controlDecember 31, 2022. For additional information, see “Maturities of Lease Liabilities” in Note 11 to our audited consolidated financial statements included elsewhere in this Annual Report.

We have also entered into an agreement for power redundancy supply at a target business, new management mayfacility in Massachusetts, which has not possessyet commenced as of December 31, 2022. For additional information, see “Lease Commitments” in Note 19 to our consolidated financial statements included elsewhere in this Annual Report.

Off-Balance-Sheet Arrangements

We did not have any off-balance-sheet arrangements as of December 31, 2022.

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Critical Accounting Policies and Estimates

Discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with US GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the skills, qualifications or abilities necessary to profitably operate such business.

We may structure our initial business combination so thatreported amounts of assets and liabilities and related disclosure of contingent assets and liabilities, revenue and expenses at the post-transaction company in which our public stockholders own shares will own less than 100%date of the equity interests or assets of a target business, butfinancial statements. Generally, we will only complete such business combination ifbase our estimates on historical experience and on various other assumptions in accordance with US GAAP that we believe to be reasonable under the post-transaction company owns or acquires 50% or morecircumstances. Because of the outstanding voting securities ofuncertainty inherent in these matters, actual results may differ from these estimates under different assumptions or conditions.


Critical accounting policies and estimates are those that we consider the target or otherwise acquires a controlling interest in the target business sufficient for us not to be required to register as an investment company under the Investment Company Act. We will not consider any transaction that does not meet such criteria. Even if the post-transaction company owns 50% or more of the voting securities of the target, our stockholders prior to our initial business combination may collectively own a minority interest in the post business combination company, depending on valuations ascribedmost important to the targetportrayal of our financial condition and us in our initial business combination. For example, we could pursue a transaction in which we issue a substantial numberresults of new shares of common stock in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% interest in the target. However,operations because they require Cyxtera’s most difficult, subjective or complex judgments, often as a result of the issuanceneed to make estimates about the effect of a substantial number of new shares of common stock,matters that are inherently uncertain. Based on this definition, we have identified the following critical accounting policies and estimates: revenue from contracts with customers, accounting for income taxes, accounting for leases and accounting for warrant liabilities. These critical accounting policies are addressed below. In addition, we have other key accounting policies and estimates that are described in Note 2 to our stockholders immediately prior to such transaction could own less than aconsolidated financial statements.

Revenue recognition

We derive the majority of our outstanding sharesrevenues from recurring revenue streams, consisting primarily of common stock subsequentcolocation service fees. Colocation service fees include fees for the licensing of space, power and interconnection services. The remainder of our revenues are derived from non-recurring charges, such as installation fees and professional services, including remote support to troubleshoot technical issues and turnkey structured cabling solutions. Our revenue contracts are accounted for in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”), with the exception of certain contracts that contain lease components and are accounted for in accordance with ASC Topic 840, Leases. Under the revenue accounting guidance, revenues are recognized when control of these products and services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for the products and services. Revenues from recurring revenue streams are generally invoiced monthly in advance and recognized ratably over the term of the contract, which is generally three years. Non-recurring installation fees, although generally invoiced in a lump sum upon installation, are deferred and recognized ratably over the contract term. Professional service fees and equipment sales are also generally invoiced in a lump sum upon service delivery and are recognized in the period when the services are provided or the equipment is delivered. For contracts with customers that contain multiple performance obligations, we account for individual performance obligations separately if they are distinct or as a series of distinct obligations if the individual performance obligations meet the series criteria. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. The transaction price is allocated to the separate performance obligation on a relative standalone selling price basis. The standalone selling price is determined based on overall pricing objectives, taking into consideration market conditions, geographic locations and other factors. Other judgments include determining if any variable consideration should be included in the total contract value of the arrangement, such transaction.as price increases.

Revenue is generally recognized on a gross basis in accordance with the accounting standard related to reporting revenue on a gross basis as a principal versus on a net basis as an agent, as we are primarily responsible for fulfilling the contract, bear the inventory risk and have discretion in establishing the price when selling to customers. To the extent we do not meet the criteria for recognizing revenue on a gross basis, we record the revenue on a net basis.

Contract balances

The timing of revenue recognition, billings and cash collections result in accounts receivables, contract assets and deferred revenues. A receivable is recorded at the invoice amount, net of an allowance for doubtful accounts and is recognized in the period in which we have transferred products or provided services to our customers and when our right to consideration is unconditional. Payment terms and conditions vary by contract type,
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although terms generally include a requirement of payment within 30 to 45 days. In addition, other minority stockholders may subsequently combine their holdingsinstances where the timing of revenue recognition differs from the timing of invoicing, we have determined that our contracts generally do not include a significant financing component. We assess collectability based on a number of factors, including past transaction history with the customer and the credit-worthiness of the customer. We generally do not request collateral from our customers. We also maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments which we had expected to collect. If the financial condition of our customers deteriorates or if they became insolvent, resulting in an impairment of their ability to make payments, greater allowances for doubtful accounts may be required. Management specifically analyzes accounts receivable and current economic news and trends, historical bad debts, customer concentrations, customer credit-worthiness and changes in customer payment terms when evaluating revenue recognition and the adequacy of our reserves. Any amounts that were previously recognized as revenue and subsequently determined to be uncollectable are charged to bad debt expense, which is included in selling, general and administrative expenses in the consolidated statements of operations. Delinquent account balances are written off after management has determined that collection is not probable.

A contract asset exists when we have transferred products or provided services to our customers, but customer payment is contingent upon satisfaction of additional performance obligations. Certain contracts include terms related to price arrangements such as price increases and free months. We recognize revenues ratably over the contract term, which could potentially give rise to contract assets during certain periods of the contract term. Contract assets are recorded in prepaid and other current assets and other assets in the consolidated balance sheets.

Deferred revenue (a contract liability) is recognized when we have an unconditional right to a single personpayment before we transfer products or groupservices to customers. Deferred revenue is included in other current liabilities and other liabilities in the consolidated balance sheets.

Contract costs

Direct and indirect incremental costs solely related to obtaining revenue generating contracts are capitalized as costs of obtaining a larger sharecontract when they are incremental and if they are expected to be recovered. Such costs consist primarily of commission fees and sales bonuses, contract fulfillment costs, as well as indirect related payroll costs. Contract costs are amortized over the company’s stock than we initially acquired. Accordingly, this may makeestimated period of benefit, which is estimated as three years, on a straight-line basis.

For further information on revenue recognition, see Note 6 to our consolidated financial statements.

Income Taxes

We account for income taxes pursuant to the asset and liability method, which requires the recognition of deferred income tax assets and liabilities related to the expected future tax consequences arising from temporary differences between the carrying amounts and tax bases of assets and liabilities based on enacted statutory tax rates applicable to the periods in which the temporary differences are expected to reverse. Any effects of changes in income tax rates or laws are included in income tax expense in the period of enactment. We reduce the carrying amounts of deferred tax assets by a valuation allowance if, based on the evidence available, it more likelyis more-likely-than-not that our managementsuch assets will not be ablerealized. In making the assessment under the more-likely-than-not standard, appropriate consideration must be given to maintain our control of the target business.

General Risk Factors

We have identified a material weakness in our internal control over financial reporting related to our accounting for instruments that have an equityall positive and liability componentnegative evidence related to the instruments we issued in connection with the IPO. This material weakness could continue to adversely affect our ability to report our results of operations and financial condition accurately and in a timely manner.

Following the issuancerealization of the SEC Staff Statement on April 12, 2021, in May 2021, after consultationdeferred tax assets. The assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carry forward periods by jurisdiction, our experience with loss carryforwards not expiring unutilized and all tax planning alternatives that may be available. A valuation allowance is recognized if, under applicable accounting standards, we determine it is more-likely-than-not that a deferred tax asset would not be realized.


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Leases

A significant portion of our independent registered publicdata center spaces, office spaces and equipment are leased. Each time we enter into a new lease or lease amendments, we analyze each lease or lease amendment for the proper accounting, firm, our managementincluding determining if the arrangement is or contains a lease at inception and our audit committee concluded that, in lightmaking assessment of the SEC Staff Statement, it was appropriateleased properties to restatedetermine if they are operating or finance leases. Determination of accounting treatment, including the previously issuedresult of the lease classification test for each new lease or lease amendment, is dependent on a variety of judgements, such as identification of lease and non-lease components, determination of lease term, including assessing the likelihood of lease renewals, valuation of leased property and establishing the incremental borrowing rate to calculate the present value of the minimum lease payment for the lease term. As our lessee leases do not provide a readily determinable implicit rate, we use our incremental borrowing rate estimated based on information available at the commencement date in determining the present value of lease payments under each finance lease. When determining the incremental borrowing rate, we utilize a market-based approach, which requires significant judgment. Therefore, we utilize different data sets to estimate IBRs via an analysis of (i) yields on our outstanding public debt (ii) yields on comparable credit rating composite curves and (iii) yields on comparable market curves.

Warrant Liabilities

In January 2022, the Company completed the redemption of the Public Warrants and Private Placement Warrants. As a result, the Company derecognized the $64.7 million of the warrant liabilities and recognized a gain of $11.8 million. See Note 13 in our audited consolidated financial statements as of and for the period ended December 31, 2020.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Our management is likewise required, on a quarterly basis, to evaluate the effectiveness of our internal controls and to disclose any changes and material weaknesses identified through such evaluation of those internal controls. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.


As describedincluded elsewhere in this Annual Report we have identified a material weakness in our internal control over financial reporting related tofor additional information regarding the accounting for instruments that have an equity and liability component related to the instruments we issued in connection with our IPO in September 2020.warrants redeemed. As a result of this material weakness, our management has concluded that our internal control over financial reporting wasthe redemption, we do not effective as of December 31, 2020. This material weakness resultedbelieve warrant liabilities is a critical accounting estimate.


Recent Accounting Pronouncements

Recently issued accounting pronouncements are described in a material misstatementNote 2 of our derivative liabilities, change in fair value of derivative liabilities, Class A common stock subject to possible redemption, accumulated deficit and related financial disclosures for the Affected Periods. For a discussion of management’s consideration of the material weakness identified related to our accounting for instruments that have an equity and liability component related to the instruments we issued in connection with the IPO, see “Note 2—Restatement of Previously Issued Financial Statements” to the accompanyingaudited consolidated financial statements as well as Part II, Item 9A: Controls and Procedures included elsewhere in this Annual Report.

As described in “Part II, Item 9A. Controls and Procedures,” we have concluded that our internal control over financial reporting was ineffective as of December 31, 2020 because material weaknesses existed in our internal control over financial reporting. We have taken a number of measures to remediate the material weaknesses described therein; however, if we are unable to remediate our material weaknesses in a timely manner or we identify additional material weaknesses, we may be unable to provide required financial information in a timely and reliable manner and we may incorrectly report financial information. Likewise, if our financial statements are not filed on a timely basis, we could be subject to sanctions or investigations by the stock exchange on which our common stock is listed, the SEC or other regulatory authorities. Failure to timely file will cause us to be ineligible to utilize short form registration statements on Form S-3 or Form S-4, which may impair our ability to obtain capital in a timely fashion to execute our business strategies or issue shares to effect an acquisition. In either case, there could result a material adverse effect on our business. The existence of material weaknesses or significant deficiencies in internal control over financial reporting could adversely affect our reputation or investor perceptions of us, which could have a negative effect on the trading price of our stock. In addition, we will incur additional costs to remediate material weaknesses in our internal control over financial reporting, as described in “Part II, Item 9A. Controls and Procedures”.

We can give no assurance that the measures we have taken and plan to take in the future will remediate the material weakness identified or that any additional material weaknesses or restatements of financial results will not arise in the future due to a failure to implement and maintain adequate internal control over financial reporting or circumvention of these controls. In addition, even if we are successful in strengthening our controls and procedures, in the future those controls and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the fair presentation of our financial statements.

You will not be entitled to protections normally afforded to investors of many other blank check companies.

Since the net proceeds of the IPO and the sale of the private placement warrants to the sponsor are intended to be used to complete an initial business combination with a target business, we may be deemed to be a “blank check” company under the U.S. securities laws. However, because we have net tangible assets in excess of $5,000,000 and filed a Current Report on Form 8-K, including an audited balance sheet of our company demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things, this means our units will be immediately tradable and we will have a longer period of time to complete our initial business combination than do companies subject to Rule 419. Moreover, if the IPO were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection with our completion of our initial business combination.

Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial business combination, and results of operations.

We are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our initial business combination, and results of operations.



JOBS Act Accounting Election

We are an emerging growth company, and a smaller reporting company withinas defined in the meaning ofJOBS Act. Under the SecuritiesJOBS Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies can delay adopting new or smaller reporting companies, this could make our securities less attractiverevised accounting standards issued subsequent to investors and may make it more difficult to compare our performance with other public companies.

We are an “emerging growth company” within the meaningenactment of the Securities Act, as modified by the JOBS Act until such time as those standards apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and we may take advantage of certain exemptions from various reporting requirements that are applicable to other publicprivate companies that are not emerging growth companies, including, but not limited to, not being required to comply withuntil the auditor attestation requirements of Section 404earlier 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 bedate we (i) are no longer 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 common stock held by non-affiliates exceeds $700 million as of the end of any second quarter of a fiscal year, in which case we would no longer be an emerging growth company as of the end of such fiscal year. 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 securitiesor (ii) affirmatively 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 toirrevocably opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such 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.

Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates exceeds $250 million as of the end of that fiscal year’s second fiscal quarter, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the end of that fiscal year’s second fiscal quarter. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.

Cyber incidents or attacks directed at us could result in information theft, data corruption, operational disruption and/or financial loss.

We depend on digital technologies, including information systems, infrastructure and cloud applications and services, including those of third parties with which we may deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation of our assets, 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.


Terrorist attacks, communal disturbances, civil unrest and other acts of violence or war may result in a loss of investor confidence and a declineprovided in the value of our shares and trading price of our shares following our business combination.

Terrorist attacks, civil unrest and other acts of violence or war may negatively affect the markets in which we may operate our business following our business combination and also adversely affect the worldwide financial markets. Events of this nature in the future, as well as social and civil unrest, could influence the economy in which our business target operates, and could have an adverse effect on our business, including the value of equity shares and the trading price of our shares following our business combination.

Item 1B.Unresolved Staff Comments.

None.

Item 2.Properties.

We do not own any real estate or other physical properties materially important to our operation. We currently maintain our principal executive offices at 777 Third Avenue, 18th Floor, New York, NY 10017. The cost for this space is included in the $10,000 per-month aggregate fee our sponsor charges us for general and administrative services. We consider our current office space, combined with the other office space otherwise available to our executive officers, adequate for our current operations.

Item 3.Legal Proceedings.

To the knowledge of our management, there is no litigation currently pending against us, any of our officers or directors in their capacity as such or against any of our property.

Item 4.Mine Safety Disclosures.

Not applicable.


PART II

Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities.

Market Information

Our units, Class A common stock and detachable redeemable warrants are each traded on the Nasdaq Capital Market under the symbols “SVACU,” “SVAC” and “SVACW,” respectively. Our units commenced public trading on September 10, 2020, and our Class A common stock and detachable redeemable warrants commenced separate public trading on November 2, 2020.

  Units  Class A
Common Stock
  Warrants 
Quarter Ended High  Low  High  Low  High  Low 
2020                        
Third Quarter(1) $10.88  $9.97  $  $  $  $ 
Fourth Quarter(2) $11.09  $9.92  $10.88  $9.65  $2.45  $1.20 
2021                        
First Quarter (through March 12, 2021) $12.50  $10.00  $12.00  $9.87  $3.50  $1.25 

(1)The Third Quarter 2020 reflects the high and low trade prices of our units beginning as of September 10, 2020, the first day that our units began trading on the Nasdaq Capital Market.

(2) The Fourth Quarter 2020 reflects the high and low trade prices of our Class A common stock and detachable redeemable warrants beginning as of November 2, 2020, the first day that the shares of Class A common stock and detachable redeemable warrants began trading on the Nasdaq Capital Market.

Holders

On March 12, 2021, there was one holder of record of our units, one holder of record of our Class A common stock, six holders of record of our Class B common stock and one holder of record of our detachable redeemable warrants.

Dividends

We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our initial business combination. The payment of any cash dividends subsequent to a business combination will be within the discretion of our board of directors at such time. In addition, our board of directors is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future. Further, if we incur any indebtedness, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.

Securities Authorized for Issuance Under Equity Compensation Plans

None.

Recent Sales of Unregistered Securities

None.


Use of Proceeds from Registered Offerings

There has been no material change in the planned use of proceeds from the IPO and sale of private placement warrants as described in our quarterly report on Form 10-Q for the period ended September 30, 2020, which was filed with the SEC.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

Item 6.Selected Financial Data.

Not applicable.

Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Cautionary Note Regarding Forward-Looking Statements

This Annual Report includes forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the ExchangeJOBS Act. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other SEC filings.

In this Annual Report, we are restating (i) our audited financial statements as of December 31, 2020, and for the year ended December 31, 2020 and (ii) our unaudited interim financial statements as of September 30, 2020, and for the three and nine months ended September 30, 2020.

On April 12, 2021, the SEC Staff issued the SEC Staff Statement. In the SEC Staff Statement, the SEC Staff expressed its view that certain terms and conditions common to SPAC warrants may require the warrants to be classified as liabilities on the SPAC’s balance sheet as opposed to equity. Since issuance in September 2020, our warrants and the forward purchase agreement were accounted for as equity within our balance sheet, and after discussion and evaluation, including with our independent registered public accounting firm and our audit committee, and taking into consideration the SEC Staff Statement, we have concluded that our warrants and the forward purchase agreement should be presented as liabilities with subsequent fair value remeasurement.

Therefore, in consultation with our audit committee, we concluded that our previously issued audited financial statements as of and for the year ended December 31, 2020 and the unaudited interim financial statements as of, and for the three and nine months ended September 30, 2020 should be restated because of a misapplication in the guidance around accounting for certain of our Warrants and should no longer be relied upon.

Historically, the Warrants and the forward purchase agreement were reflected as a component of equity as opposed to liabilities on the balance sheets and the statements of operations did not include the subsequent non-cash changes in estimated fair value of the Warrants and the forward purchase agreement, based on our application of ASC 815-40. The views expressed in the SEC Staff Statement were not consistent with the company’s historical interpretation of the specific provisions within its warrant agreement and the company’s application of ASC 815-40 to the warrant agreement. We reassessed our accounting for Warrants issued in September 2020 and the forward purchase agreement in light of the SEC Staff’s published views and, based on this reassessment, we determined that the Warrants and the forward purchase agreement should be classified as liabilities measured at fair value upon issuance, with subsequent changes in fair value reported in our statement of operations for each reporting period.


Our accounting for the Warrants and the forward purchase agreement as components of equity instead of as derivative liabilities did not have any effect on our previously reported revenue, operating expenses, operating income, cash flows or cash.

In connection with the restatement, our management reassessed the effectiveness of our disclosure controls and procedures for the periods affected by the restatement. As a result, of that reassessment, we determined that our disclosure controls and procedures for such periods were not effective with respect to the classification of the company's warrants as components of equity instead of as derivative liabilities.  For more information, see “Part II, Item 9A. Controls and Procedures” included in this Annual Report.

We have not amended our previously filed Quarterly Report on Form 10-Q for the period affected by the restatement. The financial information that has been previously filed or otherwise reported for these periods is superseded by the information in this Annual Report, and the financial statements and related financial information contained in such previously filed reports should no longer be relied upon.

The restatement is more fully described in Note 2 of the notes to the financial statements included herein.

Overview

We are a blank check company incorporated in Delaware on November 14, 2019 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar initial business combination with one or more businesses. Our sponsor is SVAC Sponsor LLC, a Delaware limited liability company.

Our registration statements for our IPO became effective on September 9, 2020. On September 14, 2020, we consummated the IPO of 36,000,000 units at $10.00 per unit, generating gross proceeds of $360.0 million, and incurring offering costs of approximately $23.0 million, inclusive of $16.2 million in deferred underwriting commissions. The underwriters were granted a 45-day option from the date of the final prospectus relating to the IPO to purchase up to 5,400,000 additional units to cover over-allotments, if any, at $10.00 per unit, less underwriting discounts and commissions. On September 18, 2020, the underwriters partially exercised the over-allotment option and on September 23, 2020, purchased an additional 4,423,453 units, generating gross proceeds of approximately $44.2 million, and incurred additional offering costs of approximately $2.7 million (net of approximately $221,000 in reimbursement for certain expenses from the underwriters), including approximately $2.0 million in deferred underwriting fees. As of November 2, 2020, holders of the units may elect to separately trade the public shares and the detachable redeemable warrants included in the units.

Simultaneously with the closing of the IPO, we completed the private sale of an aggregate of 6,133,333 private warrants to our sponsor at a purchase price of $1.50 per private placement warrant, generating gross proceeds of $9.2 million. In connection with the underwriters’ partial exercise of their over-allotment option, our sponsor purchased an additional 589,794 private placement warrants, generating gross proceeds of approximately $0.9 million.

Upon the closing of the IPO, the sale of the private placement warrants, the sale of the over-allotment units and the sale of 589,794 additional private placement warrants, $404.2 million ($10.00 per unit) of the net proceeds of such sales were placed in the trust account located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and invested only in U.S. “government securities,” within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or in money market funds meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4) of Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations, as determined by us, until the earlier of: (i) the completion of an initial business combination and (ii) the distribution of the trust account as described elsewhere herein.


If we are unable to complete an initial business combination within 24 months from the closing of the IPO, or September 14, 2022, we will (i) cease all operations, except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then-outstanding public shares, which redemption will completely extinguish the public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

On February 21, 2021, we entered into the Merger Agreement, which provides for, among other things, (i) Cyxtera to be contributed to Newco by the Cyxtera Stockholder, with Cyxtera becoming a wholly-owned subsidiary of Newco, (ii) Merger Sub 1 to be merged with and into NewCo, with NewCo surviving the First Merger as a wholly-owned subsidiary of SVAC and Merger Sub 1 ceasing to exist, and (iii) immediately following the First Merger, NewCo to be merged with and into Merger Sub 2, with Merger Sub 2 surviving the Second Merger as a wholly-owned subsidiary of SVAC and NewCo ceasing to exist. As a result of the Cyxtera Business Combination, Cyxtera and the various operating subsidiaries of Cyxtera will become subsidiaries of SVAC, with the Cyxtera Stockholder becoming a stockholder of SVAC. Upon closing of the Cyxtera Business Combination, we will be renamed “Cyxtera Technologies, Inc.”

See “Item 1. Business—Proposed Business Combination” and Note 12 to our audited financial statements for further information related to the Cyxtera Business Combination.

Liquidity and Capital Resources

As of December 31, 2020, we had approximately $2.6 million in our operating bank account, and working capital of approximately $2.5 million. Further, we have incurred and expect to continue to incur significant costs in pursuit of our acquisition plans.

Our liquidity needs to date have been satisfied through the payment of $25,000 from our sponsor to purchase the founder shares, a loan under a promissory note of approximately $141,000 from our sponsor, and the net proceeds from the consummation of the sale of the private placement not held in the trust account. We fully repaid the promissory note on September 14, 2020. In addition, in order to finance transaction costs in connection with an initial business combination, our sponsor or an affiliate of our sponsor, or our officers and directors may, but are not obligated to, provide us working capital loans. As of December 31, 2020, there were no working capital loans outstanding.

Based on the foregoing, management believes that we will have sufficient working capital and borrowing capacity from our sponsor or an affiliate of our sponsor, or certain of our officers and directors to meet its needs through the earlier of the consummation of an initial business combination or one year from this filing. Over this time period, we will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial business combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the initial business combination.

Management continues to evaluate the impact of the COVID-19 pandemic and has concluded that the specific impact is not readily determinable as of the date of the balance sheet. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Results of Operations

Our entire activity since inception through December 31, 2020 related to our formation, the preparation for the IPO, and since the closing of the IPO, the search for a prospective initial business combination. We have neither engaged in any operations nor generated any revenues to date. We will not generate any operating revenues until after completion of our initial business combination. We will generate non-operating income in the form of gain on investment (net), dividends and interest held in trust account. We expect to 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.


For the year ended December 31, 2020, we had a net loss of approximately $27.1 million, which consisted of approximately $26.3 million loss from changes in fair value of derivative liabilities, approximately $0.6 million of offering costs associated with derivative liabilities, approximately $138,000 in general and administrative expenses, approximately $36,000 of administrative expenses paid to a related party and approximately $200,000 of franchise tax expense, which was partially offset by approximately $169,000 net gain on investments held in the trust account.

For the period from November 14, 2019 (inception) through December 31, 2019, we had a net loss of approximately $1,300, which consisted of approximately $800 in general and administrative expenses and approximately $500 of franchise tax expense.

As a result of the restatement described in Note 2 of the notes to the financial statements included herein, we classify the warrants issued in connection with our IPO and our private placement warrants and forward purchase agreement as liabilities at their fair value and adjust the derivative instruments 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 our statement of operations. For the year ended December 31, 2020, the change in fair value of derivatives was a decrease of approximately $26.3 million. We also recognized a charge of $0.6 million for the amount of offering costs ascribed to the derivative liabilities.

Related Party Transactions

Founder Shares

On November 27, 2019, our sponsor purchased 8,625,000 shares of our Class B common stock, par value $0.0001 per share, for an aggregate price of $25,000. In June 2020, our sponsor transferred (i) 431,250 founder shares to Martin D. McNulty, Jr., our Chief Executive Officer and a member of the board of directors and (ii) 25,000 founder shares to each of Pauline J. Brown, Michelle Felman and Lowell Robinson. In July 2020, our sponsor transferred 25,000 Founder Shares to Robert L. Greene. On September 9, 2020, we effected a 1.2:1 share capitalization, resulting in an aggregate of 10,350,000 shares of Class B common stock outstanding. All shares and associated amounts have been retroactively restated to reflect the share capitalization.

Our sponsor and our Chief Executive Officer agreed to forfeit up to 1,350,000 founder shares to the extent that the over-allotment option was not exercised in full by the underwriters, so that the founder shares would represent 20.0% of our issued and outstanding shares after the IPO. On September 23, 2020, upon the underwriters’ partial exercise of the over-allotment, an aggregate of 244,137 founder shares were forfeited by our sponsor and our Chief Executive Officer.

Our sponsor and our officers and directors agreed, subject to limited exceptions, not to transfer, assign or sell any of the founder shares until (A) one year after the date of the consummation of the initial business combination or (B) subsequent to the initial business combination, (x) if the closing price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial business combination, or (y) the date on which we complete a liquidation, merger, capital stock exchange or other similar transaction that results in all of the public stockholders having the right to exchange their shares of common stock for cash, securities or other property.


Private Placement Warrants

Simultaneously with the closing of the IPO, we consummated the private placement of 6,133,333 private placement warrants to our sponsor, at a price of $1.50 per private placement warrant, generating gross proceeds to our company of $9.2 million. In connection with the underwriters’ partial exercise of their over-allotment option, our sponsor purchased an additional 589,794 private placement warrants, at a price of $1.50 per private placement warrant, generating gross proceeds of approximately $0.9 million.

Each whole private placement warrant is exercisable for one whole share of Class A common stock at a price of $11.50 per share. A portion of the proceeds from the sale of the private placement warrants to our sponsor was added to the proceeds from the IPO held in the trust account. If we do not complete an initial business combination by September 14, 2022, the private placement warrants will expire worthless. The private placement warrants will be non-redeemable for cash and exercisable on a cashless basis so long as they are held by our sponsor or its permitted transferees.

Our sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell any of its private placement warrants until 30 days after the completion of the initial business combination.

Related Party Loans

On November 27, 2019, our sponsor agreed to loan us an aggregate of up to $300,000 to cover expenses related to the IPO pursuant to a promissory note. The promissory note was non-interest bearing and payable on the earlier of October 31, 2020 or the completion of the IPO. We borrowed approximately $141,000 under the promissory note and fully repaid the promissory note on September 14, 2020.

In addition, in order to finance transaction costs in connection with an initial business combination, our sponsor or an affiliate of our sponsor, or our officers and directors may, but are not obligated to, make working capital loans. If we complete an initial business combination, we will repay the working capital loans out of the proceeds of the trust account released to us. In the event that an initial business combination does not close, we may use a portion of proceeds held outside the trust account to repay the working capital loans but no proceeds held in the trust account would be used to repay the working capital loans. The working capital loans would either be repaid upon consummation of an initial business combination, without interest, or, at the lender’s discretion, up to $1.5 million of such working capital loans may be convertible into warrants of the post-business combination entity at a price of $1.50 per warrant. The warrants would be identical to the private placement warrants. Except for the foregoing, the terms of such working capital loans, if any, have not been determined and no written agreements exist with respect to such loans. To date, we had no borrowings under the working capital loans.

Administrative Services Agreement

We entered into an agreement that provides that, commencing on the date that our securities are first listed on The Nasdaq Stock Market LLC and continuing until the earlier of the consummation of an initial business combination or our liquidation, we will pay our sponsor a total of $10,000 per month for office space, administrative and support services.

Our sponsor, our executive officers and directors or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable initial business combinations. Our audit committee will review on a quarterly basis all payments made to our sponsor, officers, directors or their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.

Contractual Obligations

We do not have any long-term debt obligations, capital lease obligations, operating lease obligations, purchase obligations or long-term liabilities, other than an agreement with our sponsor to pay our sponsor a total of $10,000 per month for office space, and administrative and support services.


Critical Accounting Policies and Estimates

Investments Held in the Trust Account

Our portfolio of investments held in the trust account is comprised of U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or investments in money market funds that invest in U.S. government securities, or a combination thereof. Our investments held in the trust account are classified as trading securities. Trading securities are presented on the balance sheet at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these investments are included in net gain from investments held in trust account in the statement of operations. The estimated fair values of investments held in the trust account are determined using available market information, other than for investments in open-ended money market funds with published daily net asset values (“NAV”), in which case we use NAV as a practical expedient to fair value. The NAV on these investments is typically held constant at $1.00 per unit.

Class A Common Stock Subject to Possible Redemption

We account for our Class A common stock subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Shares of Class A common stock subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Shares of conditionally redeemable Class A common stock (including Class A common stock 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, shares of Class A common stock are classified as stockholders’ equity. Our Class A common stock features certain redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events. Accordingly, as of December 31, 2020, 33,614,040 shares of Class A common stock subject to possible redemption are presented as temporary equity, outside of the stockholders’ equity section of our balance sheet.

Derivative Liabilities

We do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of our financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815-15. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.

We issued 6,737,242 detachable redeemable warrants to investors in our IPO and issued 6,723,127 private placement warrants to our sponsor. We will also be distributing warrants (which will be in the form of distributable redeemable warrants and, to the extent any public stockholders redeem Class A common stock in connection with the initial business combination, distributable redeemable warrants and private placement warrants) to purchase 6,737,242 shares of our Class A common stock in connection with the closing of our initial business combination. All of our outstanding warrants and distributable redeemable warrants are recognized as derivative liabilities in accordance with ASC 815-40. Accordingly, we recognize the warrant instruments as liabilities at fair value and adjust the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. The fair value of warrants issued in connection with the IPO and private placement, and distributable redeemable warrants, were initially measured at fair value using a modified Black-Scholes option pricing model.

We have entered into the forward purchase agreement pursuant to which the forward purchasers will purchase forward purchase shares at a price equal to $9.50 per share, in a private placement that will close simultaneously with the closing of our initial business combination. At the closing, the forward purchasers will purchase the number of forward purchase shares from us that would result in net proceeds in an aggregate amount necessary to satisfy the Redemption Obligations, subject to a maximum of $100,000,000. The forward purchase agreement is recognized as a derivative liability in accordance with ASC 815-40. Accordingly, we recognize the forward purchase agreement as a liability at fair value and adjust the instrument to fair value at each reporting period.


Net Loss Per Common Share

We comply with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net income per share is computed by dividing net income (loss) applicable to common stockholders by the weighted average number of shares of common stock outstanding for the period. We have not considered the effect of the warrants sold in the IPO and private placement to purchase an aggregate of 20,197,611 shares of Class A common stock in the calculation of diluted earnings per share, since their inclusion would be anti-dilutive under the treasury stock method. As a result, diluted earnings per share is the same as basic earnings per share for the period.

Our statement of operations includes a presentation of income per share for common stock subject to redemption in a manner similar to the two-class method of income per share. Net income per share, basic and diluted for Class A common stock is calculated by dividing the net gain from investments held in the trust account of approximately $169,000, net of applicable franchise taxes of approximately $169,000 for the year ended December 31, 2020, by the weighted average number of shares of Class A common stock outstanding for the period. Net loss per share, basic and diluted for Class B common stock for the year ended December 31, 2020 is calculated by dividing the net loss of approximately $27.1 million, by the weighted average number of Class B common stock outstanding for the period.

Off-Balance Sheet Arrangements and Contractual Obligations

As of December 31, 2020, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations.

JOBS Act

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 have elected 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, the 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


Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Market Risk

The following discussion about market risk involves forward-looking statements. Actual results could differ materially from those projected in the processforward-looking statements. We may be exposed to market risks related to changes in interest rates and foreign currency exchange rates and fluctuations in the prices of evaluating the benefits of relyingcertain commodities, primarily electricity.

Interest Rate Risk

Our future income, cash flows and fair values relevant to financial instruments are subject to risks relating to interest rates. We are subject to interest rate risk in connection with our credit facility, which has variable interest rates. The interest rates on the facility are based on a fixed margin plus a market interest rate, which can fluctuate
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accordingly but is subject to a minimum rate. Interest rate changes do not affect the market value of such debt, but could impact the amount of our interest payments, and accordingly, our future earnings and cash flows, assuming other reduced reporting requirements providedfactors are held constant. For every 100 basis point change in interest rates, the annual interest expense on our credit facilities could increase by a total of approximately $8.7 million or decrease by a total of approximately $8.7 million based on the outstanding borrowings under our credit facility as of December 31, 2022.

The fair value of our long-term fixed interest rate debt is subject to interest rate risk. Generally, the fair value of fixed interest rate debt will increase as interest rates fall and decrease as interest rates rise. These interest rate changes may affect the fair value of the fixed interest rate debt but do not impact our earnings or cash flows. The fair value of our 2017 First Lien Term Facility and 2019 First Lien Term Facility (as defined in Note 12 of our audited consolidated financial statements included elsewhere in this Annual Report) as of December 31, 2022 and 2021 were based on the quoted market price for these instruments in an inactive market, which is considered Level 2 of the fair value hierarchy. The carrying value of the Revolving Facility approximates estimated fair value as of December 31, 2022 and 2021 due to the variability of interest rates.

The following table represents the carrying value and estimated fair value of our Term Facilities and Revolving Facility as of (in thousands):
20222021
Carrying valueFair valueCarrying valueFair value
2017 First Lien Term Facility$772.2 $780.0 $778.3 $780.0 
2019 First Lien Term Facility96.8 98.0 97.5 98.0 
Revolving Facility— — 2.7 2.7 
2021 Revolving Facility42.0 42.0 37.3 37.3 

Foreign Currency Risk

We primarily use the US dollar as our functional currency in all markets in which we operate in order to reduce our foreign currency market risk. The Company has transactional currency exposure arising mainly from revenue or expenses which are denominated in currencies other than its functional currency. The US dollar strengthened relative to certain of the currencies of the foreign countries in which we operate during the year ended December 31, 2022. This has impacted our consolidated balance sheet and results of operations during this period, including the amount of revenues that we reported. Continued strengthening or weakening of the US dollar will continue to impact us in future periods. A hypothetical 10% strengthening of the US dollar against foreign currencies would have a reduction of our loss from operations before income taxes of approximately $1.3 million. A hypothetical 10% weakening of the US dollar against foreign currencies would have a reduction of our loss from operations before income taxes of approximately $1.3 million.

Commodity Price Risk

Certain operating costs incurred by us are subject to price fluctuations caused by the JOBS Act. Subjectvolatility of underlying commodity prices. The commodity most likely to certain conditions set forthhave an impact on our results of operations 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 systemevent of internal controls over financial reporting pursuant to Section 404, (ii) provideprice changes is energy. We closely monitor the cost of electricity at all of our locations. We have entered into several power contracts to purchase power at fixed prices in certain locations in California, Texas, Ohio, Illinois, Virginia, New Jersey and United Kingdom.

We do not currently employ forward contracts or other financial instruments to address commodity price risk other than the compensation disclosurepower contracts discussed above.

Inflation Risk

We believe 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 chief executive officer’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our IPO or until we are no longer an “emerging growth company,” whichever is earlier.

Recent Accounting Pronouncements

Our management does not believe there are any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, that would haveinflation has had a material effect on our business, financial statements.

condition, and results of operations. Our costs have become subject to significant inflationary pressures. So far, we have been able to offset

56
Item 7A.Quantitative and Qualitative Disclosures about Market Risk

We are a smaller reporting company as defined by Rule 12b-2



some of the Exchange Act and are not required to provide the information otherwise required under this item.

Item 8.Financial Statements and Supplementary Data

This information appears following Item 16 of this Annual Report and is included herein by reference.

Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A.Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Annual Report, is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our principal executive officer and principal financial and accounting officer (our “Certifying Officers”), the effectiveness of our disclosure controls and procedures as of December 31, 2020, pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our Certifying Officers concluded that, as of December 31, 2020, our disclosure controls and procedures were not effective as of December 31, 2020, due solely to the material weakness in our internal control over financial reporting described below in “Changes in Internal Control Over Financial Reporting.” In light of this material weakness, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with U.S. generally accepted accounting principles. Accordingly, management believes that the financial statements included in this Annual Report present fairly in all material respects our financial position, results of operations and cash flows for the period presented.

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Management’s Report on Internal Controls Over Financial Reporting

This Annual Report does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of our independent registered public accounting firm due to a transition period established by rules of the SEC for newly public companies.

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, as the circumstances that led to the restatement of our financial statements described in this Annual Report had not yet been identified.


Our internal control over financial reporting did not result in the proper classification of our warrants. Since issuance in September 2020, our warrants were accounted for as equity within our balance sheet. On April 12, 2021, the SEC Staff issued the SEC Staff Statement in which the SEC Staff expressed its view that certain terms and conditions common to SPAC warrants may require the warrants to be classified as liabilities on the SPAC’s balance sheet as opposed to equity. After discussion and evaluation, taking into consideration the SEC Staff Statement, including with our independent auditors, we have concluded that our warrants should be presented as liabilities with subsequent fair value remeasurement.

To respond to this material weakness, we have devoted, and plan to continue to devote, significant effort and resources to the remediation and improvement of our internal control over financial reporting for instruments that have an equity and liability component. While we have processes to identify and appropriately apply applicable accounting requirements, we plan to enhance our system of evaluating and implementing the complex accounting standards that apply to our financial statements. Our plans at this time include providing enhanced access to accounting literature, research materials and documents and increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications.  The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects. For a discussion of management’s consideration of the material weakness identified related to our accounting for instruments that have an equity and liability component related to the instruments we issued in connection with the September 2020 IPO, see “Note 2—Restatement of Previously Issued Financial Statements” to the accompanying financial statements.

Item 9B.Other Information.

None.


PART III

Item 10.Directors, Executive Officers and Corporate Governance.

NameAgePosition
Jeffrey C. Smith48Chair of the Board
Martin D. McNulty, Jr.43Chief Executive Officer and Director
Kenneth R. Marlin55Chief Financial Officer
Pauline J. Brown54Director
Michelle Felman58Director
Robert L. Greene52Director
Lowell W. Robinson72Director

Jeffrey C. Smith has been the Chair of our board of directors since November 2019. Mr. Smith is a Managing Member, Chief Executive Officer and Chief Investment Officer of Starboard, which he founded in 2011 with a spin-off of the existing Value and Opportunity Fund. From January 1998 to April 2011, Mr. Smith was at Ramius LLC, a subsidiary of the Cowen Group, Inc., where he was a Partner Managing Director and the Chief Investment Officer for the funds that comprised the Value and Opportunity investment platform. Mr. Smith was also a member of Cowen’s Operating Committee and Cowen’s Investment Committee. Prior to joining Ramius in January 1998, he served as Vice President of Strategic Development and a member of the board of directors of The Fresh Juice Company, Inc. Mr. Smith began his career in the Mergers and Acquisitions department at Société Générale. Mr. Smith has served as the chair of the board of Papa John’s International, Inc. since February 2019 and was formerly chair of the board of Advance Auto Parts, Inc. from May 2016 to May 2020. Additionally, Mr. Smith was formerly chair of the board of Darden Restaurants, Inc. from October 2014 to April 2016, and formerly on the boards of Perrigo Company plc from February 2017 to August 2019, Yahoo! Inc., from April 2016 to June 2017, Quantum Corporation from May 2013 to May 2015, Office Depot, Inc. from August 2013 to September 2014, Regis Corporation from October 2011 until October 2013 and Surmodics, Inc. from January 2011 to August 2012. Mr. Smith also previously served as chair of the board of directors of Phoenix Technologies Ltd and as a director of Zoran Corporation, Actel Corporation, Kensey Nash Corp., S1 Corp and the Fresh Juice Company. Mr. Smith graduated from The Wharton School of Business at The University of Pennsylvania, where he received a B.S. in Economics. Mr. Smith’s qualifications to serve on our board of directors include his broad experience investing in public companies to improve value and his ability to provide our board of directors with insights into governance, oversight, accountability, management discipline, capitalization strategies and capital market mechanics.

Martin D. McNulty, Jr. has been our Chief Executive Officer and a member of our board of directors since June 2020. Since June 2020, Mr. McNulty has served as a Managing Director of Starboard. From September 2013 to May 2020, Mr. McNulty was a Managing Director and member of the investment committee of Starr Investment Holdings, LLC, the direct private equity investment arm for C.V. Starr and Co., responsible for sourcing, execution and portfolio management of investment opportunities in the business services and healthcare sectors with a focus on supporting market leading companies with superb leadership teams grow their businesses. From June 2008 to August 2013, Mr. McNulty was a Vice President at Metalmark Capital, a value-oriented middle market private equity fund focused on making investments in the healthcare, industrial and energy sectors. From 2004 to 2007, Mr. McNulty was a Senior Associate at Sun Capital Partners, a value-oriented middle market private equity fund focused on making investments in businesses where its operational expertise could drive meaningful value in underperforming and turnaround situations. Mr. McNulty began his career in 2000 in the Deals practice at PricewaterhouseCoopers. Throughout his career, Mr. McNulty has served as a director or board observer of several private companies. Mr. McNulty received a BBA in Business Administration from the University of Iowa. Mr. McNulty’s qualifications to serve on our board of directors include his significant investment experience and his experience as a board member of other companies.

Kenneth R. Marlin has been our Chief Financial Officer since November 2019. Mr. Marlin is a Partner and has been the Chief Financial Officer of Starboard since 2011. Prior to joining Starboard, Mr. Marlin was a Managing Director and the Chief Compliance Officer of Ivy Asset Management LLC. Previously, Mr. Marlin served in various accounting and auditing roles with Lehman Brothers Inc., Manufacturers Hanover Trust and Arthur Andersen & Co. He received a B.S. in Accounting from the State University of New York at Albany, and is a Certified Public Accountant in the State of New York.


Pauline J. Brown has been a member of our board of directors since August 2020. Ms. Brown is the author of a new business book, entitled “Aesthetic Intelligence,” which was published by Harper Collins in November 2019. She also hosts a weekly talk show on SiriusXM, called “Tastemakers” and serves as an Executive-in-Residence and marketing professor at the Columbia Business School. From January 2016higher costs through June 2017, Ms. Brown was a Professor at Harvard Business School. Prior to Harvard, she served as the Chair of North America for LVMH Moët Hennessy Louis Vuitton SE, a European multinational luxury goods conglomerate, where she worked from January 2013 through December 2015. Ms. Brown has also served as an independent advisor to founders of and investors in early-stage consumer ventures from 2010 to 2013 as well as from 2018 to the present. Ms. Brown also formerly served as a Managing Director at The Carlyle Group, where she focused on buyouts in the consumer and retail sectors. Earlier in her career, she held senior executive roles in the global beauty industry, including Senior Vice President, Corporate Strategy and Global Business Development at Avon Products, Inc. and Vice President, Corporate Strategy and New Business Development at Estée Lauder Companies. She began her career as a Management Consultant at Bain & Company. In addition, from April 2017 to September 2019, Ms. Brown served on the board of directors of the publicly traded steakhouse chain Del Frisco’s Restaurant Group and was a member of Del Frisco’s audit and compensation committees. She currently serves on the board of directors of Neiman Marcus Group and is a member of its audit committee. Ms. Brown earned an MBA from The Wharton School of Business at The University of Pennsylvania and a BA from Dartmouth College. Ms. Brown’s qualifications to serve on our board of directors include her extensive experience in brand building, retail management and portfolio investing.

Michelle Felman has been a member of our board of directors since August 2020. Ms. Felman has been an adjunct professor at Columbia University since 2017. Ms. Felman founded JAM Holdings, an investment and advisory firm, in 2016. Prior to founding JAM Holdings, Ms. Felman served as an executive vice president—Co-Head of Acquisitions and Capital Markets at Vornado Realty Trust, a publicly traded REIT (“VNO”), from 1997 to 2010, and remained a consultant for VNO through December 2012. In addition, she served as a Managing Director of Business Development at GE Capital from 1991 to 1997. Ms. Felman began her career at Morgan Stanley in the Investment Banking Division in July 1988, where she worked until January 1991. Ms. Felman has also served on the board of Reonomy, a private real estate technology company, since 2018. Ms. Felman served as a board member of Partners Group Holdings AG, a registered, global private equity firm, from 2016 to May 2020, and served as the chair of the investment oversight committee and on the compensation, risk and audit committees. She served as a director of Forest City Realty Trust, Inc. from April 2018 to December 2018 and was a member of the governance and compensation committees. She also served as a trustee of Choice Properties Real Estate Investment Trust, a publicly traded retail REIT in Canada, from 2013 to 2018, and was a member of the governance and compensation committees. Ms. Felman has served on the board of Cumming Corp, a global project management and cost consulting company since 2017, and has served on the advisory board at Turner Impact Capital, a social impact platform that focuses on healthcare, charter schools and workforce housing since 2016. Until 2017, Ms. Felman was a member of the Executive Committee of the Zell Lurie Center at Wharton Business School, where she also served as a visiting professor from 2011 to 2015. Ms. Felman has a bachelor’s degree in economics from the University of California and an MBA from Wharton Business School at the University of Pennsylvania. Ms. Felman’s qualifications to serve on our board of directors include her background in investment banking and as the Chair of the investment oversight committee at a global private equity firm, providing tremendous experience with strategy and risk management, and a track record of creating value for stockholders.

Robert L. Greene has been a member of our board of directors since August 2020. Mr. Greene has been the President and Chief Executive Officer of the National Association of Investment Companies, the largest network of diverse-owned private equity firms and hedge funds, since February 2013. He was the Head of Investor Relations of Syncom Venture Partners, a venture capital firm, from June 2007 to December 2013. Mr. Greene currently serves on the board of directors of Transworld Systems Inc., a privately held, private equity-backed company that provides debt collection services for Fortune 500 companies on a global basis, which he joined in May 2018. He also currently serves on the board of directors and audit committee of Travelport, a UK-based travel technology company, which he joined in July 2019. From May 2008 to May 2017, Mr. Greene served as the chair of the board of trustees of the Virginia Retirement System, one of the largest public pension plans in the U.S., where he also served as chair of the audit committee, administration and personnel committee and investment policy committee and as a member and chair of the executive search committee. Mr. Greene’s qualifications to serve on our board of directors include his private equity background, his expertise in developing and executing growth strategies as well as his experience as a board member of other companies.


Lowell W. Robinson has been a member of our board of directors since August 2020. Mr. Robinson is an experienced executive with over thirty years of senior global strategic, financial, M&A, operational, turnaround and governance experience. Mr. Robinson was Chief Financial Officer, Chief Operating Officer and Chief Administrative Officer of MIVA, Inc. a Nasdaq digital marketing company, serving as Chief Financial Officer from 2006 to 2009, Chief Administrative Officer from 2006 to 2007, and Chief Operating Officer from 2007 to 2009, EVP, Chief Financial Officer and Chief Administrative Officer of HotJobs.com Ltd. from 2000 to 2002, EVP, Chief Financial Officer and Chief Administrative Officer of PRT Group Inc., a software services technology company from 1997 to 1999, and EVP, Chief Financial Officer and Chief Administrative Officer of Valassis/Advo Inc., a NYSE direct marketing company, from 1994 to 1997. In addition, Mr. Robinson held senior financial positions with Citigroup Inc. from 1986 to 1993 as Chief Financial Officer for The Travelers Life and Health Insurance businesses, Chief Financial Officer for Citigroup’s Global Insurance Division, and Controller and Chief Financial Officer for all international consumer and retail businesses, including retail banking and credit cards. Mr. Robinson is currently on the board of PhenixFIN, previously known as Medley Capital Corporation, a business development company, which he joined in April 2019, and also serves on their audit committee and chairs their compensation committee. Mr. Robinson is also currently on the board of Barnes & Noble Education, Inc., a leading solutions provider for the education industry, which he joined in July 2020, and serves on their audit committee and compensation committee. He recently served on the board of Aratana Therapeutics, Inc. from May 2018 to July 2019. In addition, Mr. Robinson served as a director of Evine Live Inc. (f/k/a ShopHQ), a $700 million home shopping/omnichannel company, from March 2014 to June 2018, where he was chair of the audit committee and on the finance committee. Additionally, he served as a director for SITO Mobile, Ltd. from April 2017 to June 2017 and served as a director for Higher One Holdings, Inc., a fintech education services company, from June 2014 to August 2016, where he chaired the audit committee and was on the risk management committee. He served as a director of Support.com, Inc. from March 2016 to June 2016 and served as a director of The Jones Group, Inc., from 2005 to April 2014, where he was chair of the audit committee and on the compensation committee. He also served as chair of two GE Capital companies in media, publishing and digital from 2010 to 2014. Mr. Robinson’s prior board experience also includes serving as a director of each of Independent Wireless One Corp., Edison Schools Inc. and International Wire Group, Inc. He is on the non-profit boards of the New York Academy of Sciences and the Harvard Business School Club of NY and previously served on the non-profit boards of The Council for Economic Education, The Metropolitan Opera Guild, the Smithsonian Libraries and the University of Wisconsin School of Business, where he ran their director’s summit and is currently on the advisory board for their Department of Economics. Mr. Robinson earned an MBA in finance from Harvard Business School and a BA in Economics from The University of Wisconsin. Mr. Robinson’s qualifications to serve on our board of directors include his broad diversified expertise in various industries, as well as his experience serving as a director of numerous public companies.

Number and Terms of Office of Officers and Directors

Our board of directors consists of six members. Holders of our founder shares have the right to elect all of our directors prior to consummation of our initial business combination and holders of our public shares do not have the right to vote on the election of directors during such time. In addition, prior to the completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason. These provisions of our amended and restated certificate of incorporation may only be amended if approved by the holders of at least 90% of our common stock entitled to vote thereon. Approval of our initial business combination will require the affirmative vote of a majority of our board directors. The term of office of our initial directors will expire at our first annual meeting of stockholders. We may not hold an annual meeting of stockholders until after we consummate our initial business combination. Any vacancy on our board of directors, including a vacancy resulting from an enlargement of our board of directors, may be filled by vote of a majority of our directors then in office.

Our officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized to appoint persons to the offices set forth in our bylaws as it deems appropriate. Our bylaws provide that our officers may consist of a Chief Executive Officer, a President, a Chief Financial Officer, Vice Presidents, a Secretary, Assistant Secretaries, a Treasurer and such other offices as may be determined by the board of directors.


Committees of the Board of Directors

Our board of directors has two standing committees: an audit committee and a compensation committee. Both our audit committee and our compensation committee are composed solely of independent directors. Subject to phase-in rules, the rules of Nasdaq and Rule 10A-3 of the Exchange Act require that the audit committee of a listed company be comprised solely of independent directors, and the rules of Nasdaq require that the compensation committee of a listed company be comprised solely of independent directors. Each committee operates under a charter that was approved by our board and has the composition and responsibilities described below.

Audit Committee

The members of our audit committee are Pauline J. Brown, Michelle Felman, Robert L. Greene and Lowell W. Robinson with Lowell W. Robinson serving as chair of the audit committee.

Each member of the audit committee is able to read and understand fundamental financial statements, including a company’s balance sheet, income statement, and cash flow statement. In addition, our board of directors has determined that Lowell W. Robinson qualifies as an “audit committee financial expert” as defined in applicable SEC rules and has accounting or related financial management expertise.

We have adopted an audit committee charter, which details the purpose and principal functions of the audit committee, including:

assisting board oversight of  (1) the integrity of our financial statements, (2) our compliance with legal and regulatory requirements, (3) our independent registered public accounting firm’s qualifications and independence, and (4) the performance of our internal audit function and independent registered public accounting firm;

the appointment, compensation, retention, replacement, and oversight of the work of the independent registered public accounting firm and any other independent registered public accounting firm engaged by us;

pre-approving all audit and non-audit services to be provided by the independent registered public accounting firm or any other registered public accounting firm engaged by us, and establishing pre-approval policies and procedures;

reviewing and discussing with the independent registered public accounting firm all relationships the independent registered public accounting firm has with us in order to evaluate their continued independence;

obtaining and reviewing a report, at least annually, from the independent registered public accounting firm describing (1) the independent registered public accounting firm’s internal quality-control procedures and (2) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues;

meeting to review and discuss our annual audited financial statements and quarterly financial statements with management and the independent auditor, including reviewing our specific disclosures under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”;


reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and

reviewing with management, the independent registered public accounting firm, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities.

Compensation Committee

The members of our Compensation Committee are Pauline J. Brown, Michelle Felman, Robert L. Greene and Lowell W. Robinson with Michelle Felman serving as chair of the compensation committee.

We have adopted a compensation committee charter, which details the purpose and responsibility of the compensation committee, including:

reviewing and approving the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation;

reviewing and making recommendations to our board of directors with respect to (or approving, if such authority is so delegated by our board of directors) the compensation, and any incentive-compensation and equity-based plans that are subject to board approval of all of our other officers;

reviewing our executive compensation policies and plans;

implementing and administering our incentive compensation equity-based remuneration plans;

assisting management in complying with our proxy statement and annual report disclosure requirements;

approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees;

producing a report on executive compensation to be included in our annual proxy statement; and

reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.

The charter also provides that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, independent legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.

Director Nominations

We do not have a standing nominating committee though we intend to form a corporate governance and nominating committee as and when required to do so by law or Nasdaq rules. In accordance with Rule 5605(e)(2) of the Nasdaq rules, a majority of the independent directors may recommend a director nominee for selection by our board of directors. Our board of directors believes that the independent directors can satisfactorily carry out the responsibility of properly selecting or approving director nominees without the formation of a standing nominating committee. Asprice increases, but there is no standing nominating committee,guarantee that we do not have a nominating committee charter in place.


The board of directors will also consider director candidates recommended for nomination by our stockholders during such times as they are seeking proposed nominees to stand for election at the next annual meeting of stockholders (or, if applicable, a special meeting of stockholders). Our stockholders that wish to nominate a director for election to our board of directors should follow the procedures set forth in our bylaws. We have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, our board of directors considers educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our stockholders.

Compensation Committee Interlocks and Insider Participation

None of our officers currently serves, and in the past year has not served, as a member of the board of directors or compensation committee of any entity that has one or more officers serving on our board of directors.

Code of Ethics

We have adopted a Code of Ethics applicable to our directors, officers and employees. We have filed a copy of our form of Code of Ethics and our audit committee and compensation committee charters as exhibits to the registration statement in connection with our IPO.

You will be able to review these documents by accessing our public filings at the SEC’s website at www.sec.gov. In addition, a copy of the Code of Ethics will be provided without charge upon request from us in writing at 777 Third Avenue, 18th Floor, New York, New York 10017 or by telephone at (212) 845-7977. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.

Conflicts of Interest

Our management team is responsible for the management of our affairs. As described above and below, each of our officers and directors presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations or duties to one or more other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entities. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for one or more entities to which he or she has fiduciary, contractual or other obligations or duties, he or she will honor these obligations and duties to present such business combination opportunity to such entities first, and only present it to us if such entities reject the opportunity and he or she determines to present the opportunity to us (including as described in “Item 1. Business—Acquisition Process”). These conflicts may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation to us.

We do not believe, however, that the fiduciary, contractual or other obligations or duties of our officers or directors, or policies applicable to our officers or directors, will materially affect our ability to complete our initial business combination. Our amended and restated certificate of incorporation provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation.

Potential investors should be aware of the following potential conflicts of interest:

None of our officers or directors is required to commit his or her full time to our affairs and, accordingly, may have conflicts of interest in allocating his or her time among various business activities (including the activities of Starboard).


In the course of their other business activities, our officers and directors may become aware of investment and business opportunities which may be appropriate for presentation to us as well as the other entities with which they are affiliated. Our management may have conflicts of interest in determining to which entity a particular business opportunity should be presented.

Our sponsor, officers and directors have agreed to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the consummation of our initial business combination. Additionally, our initial stockholders, officers and directors have agreed to waive their redemption rights with respect to any founder shares held by them if we fail to consummate our initial business combination within 24 months from the closing of the IPO. However, if our initial stockholders or any of our officers, directors or affiliates acquire public shares in or after the IPO, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to consummate our initial business combination within 24 months from the closing of the IPO. If we do not complete our initial business combination within such applicable time period, the proceeds of the sale of the private placement warrants held in the trust account will be used to fund the redemption of our public shares, and the private placement warrants will expire worthless. With certain limited exceptions, the founder shares will not be transferable, assignable or salable by our initial stockholders until the earlier of: (1) one year after the completion of our initial business combination; and (2) the date on which we consummate a liquidation, merger, stock exchange, reorganization or other similar transaction after our initial business combination that results in all of our public stockholders having the right to exchange their shares of common stock for cash, securities or other property. Notwithstanding the foregoing, if the closing price of our Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, the founder shares will be released from the lock-up. With certain limited exceptions, the private placement warrants and the shares of common stock underlying such warrants, will not be transferable, assignable or salable by our sponsor until 30 days after the completion of our initial business combination. Since our sponsor, officers and directors may directly or indirectly own common stock and warrants, our officers and directors 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.

Our key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination. These agreements may provide for them to receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether to proceed with a particular business combination.

Our key personnel may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such key personnel was included by a target business as a condition to any agreement with respect to our initial business combination.

The conflicts described above may not be resolved in our favor.

In general, officers and directors of a corporation incorporated under the laws of the State of Delaware are required to present business opportunities to a corporation if:

the corporation could financially undertake the opportunity;

the opportunity is within the corporation’s line of business; and

it would not be fair to the corporation and its stockholders for the opportunity not to be brought to the attention of the corporation.


Accordingly, as a result of multiple business affiliations, our officers and directors have similar legal obligations and duties relating to presenting business opportunities meeting the above-listed criteria to multiple entities. Furthermore, our amended and restated certificate of incorporation provides that the doctrine of corporate opportunity will not apply with respect to any of our officers or directors in circumstances where the application of the doctrine would conflict with any fiduciary duties or contractual obligations they may have, and there will not be any expectancy that any of our directors or officers will offer any such corporate opportunity of which he or she may become aware to us. Each of our directors, officers and Industry Advisors has agreed not to become a director or officer (and, in the case of the Industry Advisors, an industry or operating advisor) of any other special purpose acquisition company with a class of securities registered under the Exchange Act, until we have entered into a definitive agreement regarding our initial business combination or we have failed to complete our initial business combination within 24 months. Below is a table summarizing the entities to which our officers and directors currently have fiduciary duties or contractual obligations that may present a conflict of interest:

Name of IndividualEntity NameEntity’s BusinessAffiliation
Jeffrey C. SmithStarboard Value LPInvestmentManaging Member, Chief Executive Officer and Chief Investment Officer
Papa John’s International Inc.Restaurant industryChair
Martin D. McNulty, Jr.Starboard Value LPInvestmentManaging Director
Kenneth R. MarlinStarboard Value LPInvestmentPartner and Chief Financial Officer
Pauline J. BrownAesthetic Intelligence LLC
Neiman Marcus Group
Advisory Services
Retail
Sole proprietor
Director
Michelle FelmanJAM HoldingsAdvisory ServicesFounder
Reonomy
Cumming Corp.
Real estate technology
Project management and cost consulting
Director
Director
Turner Impact CapitalInvestmentMember of the advisory board
Robert L. GreeneNational Association of Investment CompaniesNetworkPresident and Chief Executive Officer
Transworld Systems Inc.Debt collectionDirector
TravelportTravel technologyDirector
Lowell W. RobinsonPhenixFinInvestmentDirector
Barnes & Noble Education, Inc.EducationDirector

Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for one or more entities to which he or she has fiduciary, contractual or other obligations or duties, he or she will honor these obligations and duties to present such business combination opportunity to such entities first, and only present it to us if such entities reject the opportunity and he or she determines to present the opportunity to us (including as described in “Item 1. Business—Acquisition Process”). These conflicts may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation to us.

We are not prohibited from pursuing our initial business combination with a business combination target that is affiliated with our sponsor, our directors or our officers or from making the acquisition through a joint venture or other form of shared ownership with our sponsor, our directors, officers or their affiliates. In the event we seek to complete our initial business combination with a business that is affiliated with our sponsor, officers or directors, we, or a committee of independent and disinterested directors, will obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm, that such initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.


In addition, our sponsor, directors, officers, Industry Advisors, or any of their respective affiliates may invest in us after the date of the IPO, although they have no obligation or current intentioncontinue to do so. If any such person electsOur inability or failure to invest in us, such proposed investmentsdo so could influence their motivations to complete an initialharm our business, combination.

In the event that we submit our initial business combination to our public stockholders for a vote, our initial stockholders, officersfinancial condition, and directors have agreed to vote any founder sharesoperating results.

57


Item 8. Financial Statements and any public shares held by them in favor of our initial business combination, and our officers and directors have also agreed to vote public shares purchased by them (if any) during or after the IPO in favor of our initial business combination.

Limitation on Liability and Indemnification of Officers and Directors

Our amended and restated certificate of incorporation provides that our officers and directors will be indemnified by us to the fullest extent authorized by Delaware law, as it now exists or may in the future be amended. In addition, our amended and restated certificate of incorporation provides that our directors will not be personally liable for monetary damages to us or stockholders for breaches of their fiduciary duty as directors, except to the extent such exemption from liability or limitation thereof is not permitted by the DGCL.

We have entered into agreements with our officers and directors to provide contractual indemnification in addition to the indemnification provided for in our amended and restated certificate of incorporation. Our bylaws also permit us to maintain insurance on behalf of any officer, director or employee for any liability arising out of his or her actions, regardless of whether Delaware law would permit such indemnification. We have a policy of directors’ and officers’ liability insurance that insures our officers and directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors.

These provisions may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against 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 we pay the costs of settlement and damage awards against officers and directors pursuant to these indemnification provisions.

We believe that these provisions, the insurance and the indemnity agreements are necessary to attract and retain talented and experienced officers and directors.

In connection with the IPO, we have undertaken that insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Supplementary Data

CYXTERA TECHNOLOGIES, INC.
CONSOLIDATED FINANCIAL STATEMENTS
TABLE OF CONTENTS
Item 11.Executive Compensation.

Executive Officer and Director Compensation

None of our officers or directors have received any cash compensation for services rendered to us. We also pay our sponsor a total of $10,000 per month for office space, administrative and support services. Our sponsor, officers, directors and their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, officers, directors or our or any of their respective affiliates.

After the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting, management or other compensation from the combined company. All compensation will be fully disclosed to stockholders, to the extent then known, in the tender offer materials or proxy solicitation materials furnished to our stockholders in connection with a proposed business combination. It is unlikely that the amount of such compensation will be known at the time, because the directors of the post-combination business will be responsible for determining executive officer and director compensation. Any compensation to be paid to our officers after the completion of our initial business combination will be determined by a compensation committee constituted solely by independent directors.


We do not intend to take any action to ensure that members of our management team maintain their positions with us after the consummation of our initial business combination, although it is possible that some or all of our officers and directors may negotiate employment or consulting arrangements to remain with us after our initial business combination. The existence or terms of any such employment or consulting arrangements may influence our management’s motivation in identifying or selecting a target business, and we do not believe that the ability of our management to remain with us after the consummation of our initial business combination should be a determining factor in our decision to proceed with any potential business combination. We are not party to any agreements with our executive officers and directors that provide for benefits upon termination of employment.

Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table sets forth information regarding the beneficial ownership of our common stock as of the date of this Annual Report by:

each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock;

each of our executive officers and directors; and

all our executive officers and directors as a group.

Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them. The following table does not reflect record or beneficial ownership of the shares of common stock underlying the private placement warrants as these warrants are not exercisable within 60 days of the date of this Annual Report.

  Class A Common Stock  Class B Common Stock(2) 
  Number of shares beneficially owned  % of Class  Number of shares beneficially owned  % of Class 
Name and address of beneficial owner(1)                
Our Sponsor, Directors and Executive Officers                
SVAC Sponsor LLC(2)        9,480,713   18.8%(3)
Jeffrey C. Smith            
Martin D. McNulty, Jr        505,150   1.0%(3)
Kenneth R. Marlin            
Pauline J. Brown        30,000   * 
Michelle Felman        30,000   * 
Robert L. Greene        30,000   * 
Lowell W. Robinson        30,000   * 
All directors and executive officers as a group (seven individuals)        625,150   1.2%(3)
                 
Other 5% Stockholders                
Adage Capital Partners GP, L.L.C(4)  2,850,000   7.05%      
Teacher Retirement System of Texas(5)  2,399,561   5.9%        
Integrated Core Strategies (US) LLC(6)  2,371,068   5.9%      
Empyrean Capital Partners, LP(7)  2,149,134   5.3%      


1Unless otherwise noted, the business address of each of the following entities or individuals is c/o Starboard Value Acquisition Corp., 777 Third Avenue, 18th Floor, New York, New York 10017.

2Such shares will automatically convert into shares of Class A common stock at the time of our initial business combination on a one-for-one basis, subject to adjustment. Excludes forward purchase shares that will only be issued, if at all, at the time of our initial business combination. SVAC Manager LLC, a Delaware limited liability company, is the manager of our sponsor.

3Based upon 40,423,453 shares of Class A common stock outstanding and 10,105,863 shares of Class A common stock issuable upon conversion of the founder shares beneficially owned by our initial stockholders.

4Based solely upon the Schedule 13G/A filed by Adage Capital Partners, L.P., Adage Capital Partners GP, L.L.C., Adage Capital Advisors, L.L.C., Robert Atchinson and Phillip Gross (collectively, the “Reporting Persons”) on February 11, 2021. Beneficial ownership of these shares is shared among the Reporting Persons. The business address of each of the Reporting Persons is 200 Clarendon Street, 52nd Floor, Boston, Massachusetts 02116.

5Based solely upon the Schedule 13G filed by Teacher Retirement System of Texas on February 5, 2021. The business address of Teacher Retirement System of Texas is 1000 Red River Street, Austin, Texas 78701.

6Based solely upon the Schedule 13G/A filed by Integrated Core Strategies (US) LLC, ICS Opportunities, Ltd., Millennium International Management LP, Millennium Management LLC, Millennium Group Management LLC and Israel A. Englander on January 28, 2021. Beneficial ownership of these shares is shared among Integrated Core Strategies (US) LLC, ICS Opportunities, Ltd., Millennium International Management LP, Millennium Management LLC, Millennium Group Management LLC and Mr. Englander. The business address of each of Integrated Core Strategies (US) LLC, ICS Opportunities, Ltd. and Mr. Englander is c/o Millennium Management LLC, 666 Fifth Avenue, New York, New York 10103. The business address of each of Millennium International Management LP, Millennium Management LLC and Millennium Group Management LLC is 666 Fifth Avenue, New York, New York 10103.

7Based solely upon the Schedule 13G/A filed by Empyrean Capital Overseas Master Fund, Ltd., Empyrean Capital Partners, LP and Amos Meron on January 8, 2021. The business address of each of Empyrean Capital Overseas Master Fund, Ltd., Empyrean Capital Partners, LP and Mr. Meron is c/o Empyrean Capital Partners, LP, 10250 Constellation Boulevard, Suite 2950, Los Angeles, CA 90067.

We have no compensation plans under which equity securities are authorized for issuance.

Changes in Control

Not applicable.

Item 13.Certain Relationships and Related Transactions, and Director Independence.

In November 2019, our sponsor purchased an aggregate of 8,625,000 founder shares for an aggregate purchase price of $25,000, or approximately $0.003 per share. In June 2020, our sponsor transferred (i) 431,250 founder shares to Martin D. McNulty, Jr., our Chief Executive Officer and a member of our board of directors and (ii) 25,000 founder shares to each of Pauline J. Brown, Michelle Felman and Lowell Robinson. In July 2020, our sponsor transferred 25,000 founder shares to Robert L. Greene. On September 9, 2020, we effected a stock dividend of 1,725,000 shares with respect to our Class B common stock, resulting in our initial stockholders holding an aggregate of 10,350,000 founder shares. An aggregate of 244,137 of such founder shares held by our sponsor and our Chief Executive Officer were forfeited upon the underwriters’ partial exercise of the over-allotment option on September 18, 2020.


Our sponsor purchased an aggregate of 6,723,127 private placement warrants for a purchase price of $1.50 per warrant in connection with the closing of the IPO and the partial exercise of the underwriters’ over-allotment option, for an aggregate purchase price of approximately $10,084,691. Each private placement warrant entitles the holder thereof to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein. The private placement warrants (including the Class A common stock issuable upon exercise of the private placement warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by our sponsor until 30 days after the completion of our initial business combination.

We have entered into a forward purchase agreement with the forward purchasers pursuant to which the forward purchasers will purchase forward purchase shares at a price equal to $9.50 per share, in a private placement that will close simultaneously with the closing of our initial business combination. At the closing, the forward purchasers will purchase the number of forward purchase shares from us that would result in net proceeds in an aggregate amount necessary to satisfy the Redemption Obligation, subject to the Maximum Backstop Commitment. In addition, in connection with their purchase of any forward purchase shares, the forward purchasers will acquire private placement warrants at the distribution time as further described in this Annual Report. The forward purchasers have agreed that they will not redeem any Class A common stock held by them in connection with the initial business combination. The forward purchase shares are identical to the shares of Class A common stock included in the units sold in the IPO, except that the forward purchase shares are subject to transfer restrictions and certain registration rights, as described herein, and there is no contingent right to receive distributable redeemable warrants attached to the forward purchase shares. Rather, in connection with their purchase of any forward purchase shares, the forward purchasers will acquire private placement warrants as further described herein. The private placement warrants to be issued pursuant to the forward purchase agreement are identical to the private placement warrants being issued to the sponsor at the closing of the IPO, and as a result, are identical to the redeemable warrants, except that, so long as they are held by the forward purchasers or their permitted transferees: (1) they will not be redeemable by us, except as otherwise set forth herein; (2) they (including the Class A common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by the forward purchasers until 30 days after the completion of our initial business combination; (3) they may be exercised by the holders on a cashless basis; and (4) the holders thereof  (including with respect to the shares of common stock issuable upon exercise of these warrants) are entitled to registration rights.

The forward purchasers have the right to transfer a portion of their obligation to purchase the forward purchase shares to forward transferees, and our sponsor may, in its discretion, transfer, directly or indirectly, certain of its founder shares and private placement warrants to any such forward transferees, subject to compliance with applicable securities laws.

The forward purchase agreement also provides that forward purchasers and any forward transferees are entitled to certain registration rights with respect to their forward purchase shares, as described below.

In addition, we have entered into an agreement with the forward purchasers, pursuant to which the forward purchasers may, at their option in whole or in part, anytime or from time to time during the 6-month period following the closing of our initial business combination, purchase additional common equity of the surviving entity in our initial business combination at a price of  $10.00 per share (or other relevant equity interest) (the “optional shares”) for aggregate consideration not to exceed the difference between (i) $150,000,000 and (ii) the lesser of  (a) the Redemption Obligation or (b) $100,000,000 (the “optional share purchase agreement”). The optional share purchase agreement provides that the forward purchasers are entitled to certain registration rights with respect to their optional shares.

As described in “Item 1. Business—Acquisition Process” and “Item 10. Directors, Executive Officers and Corporate Governance—Conflicts of Interest,” if any of our officers or directors becomes aware of a business combination opportunity which is suitable for one or more entities to which he or she has fiduciary, contractual or other obligations or duties, he or she will honor these obligations and duties to present such business combination opportunity to such entities first, and only present it to us if such entities reject the opportunity and he or she determines to present the opportunity to us. Our officers and directors currently have other relevant fiduciary, contractual or other obligations or duties that may take priority over their duties to us.


We have entered into an Administrative Services Agreement pursuant to which we also pay our sponsor a total of $10,000 per month for office space, administrative and support services. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees. Accordingly, in the event the consummation of our initial business combination takes the maximum 24 months, our sponsor will be paid a total of  $240,000 ($10,000 per month) for office space, administrative and support services and will be entitled to be reimbursed for any out-of-pocket expenses.

Our sponsor, officers and directors or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, officers, directors or our or any of their respective affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.

Prior to the IPO, our sponsor agreed to loan us up to $300,000 under an unsecured promissory note to be used for a portion of the expenses of the IPO. These loans were non-interest bearing, unsecured and due at the earlier of October 31, 2020 and the closing of the IPO. We repaid these loans on September 14, 2020.

In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor, Starboard, or our officers and directors may, but none of them is obligated to, loan us funds as may be required. If we complete our initial business combination, we would repay such loaned amounts out of the proceeds of the trust account released to us. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor, Starboard or our officers and directors, if any, 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.

After our initial business combination, members of our management team who remain with us, if any, may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed to our stockholders, to the extent then known, in the tender offer or proxy solicitation materials, as applicable, furnished to our stockholders. It is unlikely the amount of such compensation will be known at the time of distribution of such tender offer materials or at the time of a stockholder meeting held to consider our initial business combination, as applicable, as it will be up to the directors of the post-combination business to determine executive officer and director compensation.

The holders of the founder shares, private placement warrants and warrants that may be issued upon conversion of working capital loans (and any shares of common stock issuable upon the exercise of the private placement warrants or warrants issued upon conversion of the working capital loans and upon conversion of the founder shares) are entitled to registration rights pursuant to a registration rights agreement entered into prior to the closing of the IPO requiring us to register such securities for resale (in the case of the founder shares, only after conversion to shares of Class A common stock). The holders of these securities are entitled to make up to three demands, excluding short form registration demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion of our initial business combination and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. Pursuant to the forward purchase agreement, we have agreed that we will use our commercially reasonable efforts to (i) within 30 days after the closing of the initial business combination, file a registration statement with the SEC for a secondary offering of the forward purchase shares and the private placement warrants issued pursuant to the forward purchase agreement, if any (including any shares of Class A common stock issued or issuable upon the exercise of such warrants), (ii) cause such registration statement to be declared effective promptly thereafter, but in no event later than 60 days after such closing and (iii) maintain the effectiveness of such registration statement, until the earlier of  (A) the date on which the forward purchasers cease to hold the securities covered thereby and (B) the date all of the securities covered thereby can be sold publicly without restriction or limitation under Rule 144 under the Securities Act and without the requirement to be in compliance with Rule 144(c)(1) under the Securities Act, subject to certain conditions and limitations set forth in the forward purchase agreement. We will bear the expenses incurred in connection with the filing of any such registration statements.


Related Party Policy

Prior to the IPO, we had not yet adopted a formal policy for the review, approval or ratification of related party transactions. Accordingly, the transactions discussed above were not reviewed, approved or ratified in accordance with any such policy.

In connection with the IPO, we adopted a Code of Ethics requiring us to avoid, wherever possible, all conflicts of interests, except under guidelines or resolutions approved by our board of directors (or the appropriate committee of our board) or as disclosed in our public filings with the SEC. Under our Code of Ethics, conflict of interest situations include any financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) involving the company.

In addition, our audit committee, pursuant to a written charter that we adopted prior to the consummation of the IPO, is responsible for reviewing and approving related party transactions to the extent that we enter into such transactions. An affirmative vote of a majority of the members of the audit committee present at a meeting at which a quorum is present will be required in order to approve a related party transaction. A majority of the members of the entire audit committee will constitute a quorum. Without a meeting, the unanimous written consent of all of the members of the audit committee will be required to approve a related party transaction. Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, officers or directors, or our or any of their affiliates.

These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the part of a director, employee or officer.

To further minimize conflicts of interest, we have agreed not to consummate an initial business combination with an entity that is affiliated with our sponsor, directors or officers unless we, or a committee of independent and disinterested directors, have obtained an opinion from an independent investment banking firm which is a member of FINRA or an independent accounting firm that our initial business combination is fair to our company from a financial point of view. There will be no finder’s fees, reimbursement, consulting fee, monies in respect of any payment of a loan or other compensation paid by us to our sponsor, officers or directors or our or any of their respective affiliates, for services rendered to us prior to or in connection with the completion of our initial business combination (regardless of the type of transaction that it is). However, the following payments may be made to our sponsor, officers or directors, or our or their affiliates, and, if made prior to our initial business combination will be made from (i) funds held outside the trust account or (ii) permitted withdrawals:

repayment of an aggregate of up to $300,000 in loans made to us by our sponsor to cover offering-related and organizational expenses;
Page
payment to our sponsor of a total of  $10,000 per month, for up to 24 months, for office space, administrative and support services;

reimbursement for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination; and

repayment of loans which may be made by our sponsor, Starboard or our officers and directors to finance transaction costs in connection with an intended initial business combination, the terms of which have not been determined nor have any written agreements been executed with respect thereto. Up to $1,500,000 of such loans may be convertible into warrants of the post-business combination entity at a price of  $1.50 per warrant at the option of the lender.


These payments may be funded using the net proceeds of the IPO and the sale of the private placement warrants not held in the trust account or, upon completion of the initial business combination, from any amounts remaining from the proceeds of the trust account released to us in connection therewith.

Director Independence

Nasdaq rules require that a majority of our board of directors be independent. An “independent director” is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which, in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. Our board has determined that each of Pauline J. Brown, Michelle Felman, Robert L. Greene and Lowell W. Robinson is an independent director under applicable SEC and Nasdaq rules. Our independent directors will have regularly scheduled meetings at which only independent directors are present.

Item 14.Principal Accountant Fees and Services.

The following is a summary of fees paid or to be paid to WithumSmith+Brown, PC for services rendered.

Audit Fees. Audit fees consist of fees billed for professional services rendered for the audit of our year-end financial statements, reviews of our quarterly financial statements and services that are normally provided by our independent registered public accounting firm in connection with statutory and regulatory filings. The aggregate fees billed by WithumSmith+Brown, PC for audit fees, inclusive of required filings with the SEC for the year ended December 31, 2020 and for the period from November 14, 2019 (inception) through December 31, 2019, and for services rendered in connection with our IPO, totaled $90,125 and $16,892, respectively.

Audit-Related Fees. Audit-related fees consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our year-end 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 WithumSmith+Brown, PC any audit-related fees for the year ended December 31, 2020 and for the period from November 14, 2019 (inception) through December 31, 2019.

Tax Fees. Tax fees consist of fees billed for professional services relating to tax compliance, tax planning and tax advice. We did not pay WithumSmith+Brown, PC any tax fees for the year ended December 31, 2020 and for the period from November 14, 2019 (inception) through December 31, 2019.

All Other Fees. All other fees consist of fees billed for all other services. We did not pay WithumSmith+Brown, PC any other fees for the year ended December 31, 2020 and for the period from November 14, 2019 (inception) through December 31, 2019.

Pre-Approval Policy

Our audit committee was formed in connection with the consummation of our IPO. As a result, the audit committee did not pre-approve all of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by our board of directors. Since the formation of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve all auditing services and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit).


PART IV

Item 15.Exhibits, Financial Statement Schedules.

(a)The following documents are filed as part of this Form 10-K:

(1)Financial Statements:

Page
Statement of Operations(As Restated)
Statement of Changes in Stockholders’ Equity(As Restated)F-5
Statement of Cash Flows(As Restated)F-6
Notes to Financial Statements (As Restated)F-7

(2)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.

(3)Exhibits

We hereby file as part of this report the exhibits listed in the attached Exhibit Index. Copies of such material can be obtained from the SEC website at www.sec.gov.

Item 16.Form 10-K Summary.

None.


EXHIBIT INDEX

Exhibit No.Description
1.1Underwriting Agreement, dated September 9, 2020, between the Company and UBS Securities LLC, as representative of the several underwriters(1)
2.1†Agreement and Plan of Merger, dated as of February 21, 2021, by and among Starboard Value Acquisition Corp., Mundo Merger Sub 1, Inc., Mundo Merger Sub 2, LLC, Cyxtera Technologies, Inc. and Mundo Holdings, Inc.(2)
3.1Amended and Restated Certificate of Incorporation of the Company(1)
3.2Bylaws of the Company(1)
4.1Warrant Agreement, dated September 9, 2020, between the Company and Continental Stock Transfer & Trust Company, as warrant agent(1)
4.2Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934(3)
4.3Specimen Unit Certificate(incorporated by reference to Exhibit 4.1 filed with the Form S-1 filed by Starboard Value Acquisition Corp. on September 8, 2020).
4.4Specimen Class A Common Stock Certificate (incorporated by reference to Exhibit 4.2 filed with the Form S-1 filed by Starboard Value Acquisition Corp. on September 8, 2020).
4.5Specimen Warrant Certificate (incorporated by reference to Exhibit 4.1 filed with the Current Report on Form 8-K filed by Starboard Value Acquisition Corp. on September 14, 2020).
10.1Amended and Restated Private Placement Warrants Purchase Agreement, dated September 9, 2020, between the Company and SVAC Sponsor LLC(1)
10.2Letter Agreement, dated September 9, 2020, among the Company, SVAC Sponsor LLC and each of the officers and directors of the Company(1)
10.3Investment Management Trust Account Agreement, dated September 9, 2020, between the Company and Continental Stock Transfer & Trust Company, as trustee(1)
10.4Registration Rights Agreement, dated September 9, 2020, among the Company and certain security holders(1)
10.5Form of Indemnity Agreement, between the Company and each of the officers and directors of the Company(1)
10.6Administrative Services Agreement, dated September 9, 2020, between the Company and SVAC Sponsor LLC(1)
10.7Amended and Restated Forward Purchase Agreement, dated September 9, 2020, among the Company and the purchasers signatory thereto(1)
10.8Optional Share Purchase Agreement, dated September 9, 2020, among Company and the purchasers signatory thereto(1)
10.9Stockholder Support Agreement, dated as of February 21, 2021, by and among Starboard Value Acquisition Corp., Cyxtera Technologies, Inc. and SIS Holdings LP(2)


10.10Sponsor Support Agreement, dated as of February 21, 2021, by and among Starboard Value Acquisition Corp., Cyxtera Technologies, Inc., SVAC Sponsor LLC and the other parties thereto(2)
10.11Form of Subscription Agreement(2)
31.1Certification 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*
31.2Certification 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*
32.1Certification 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**
32.2Certification 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 XBRLInstance Document*
101.SCH XBRLTaxonomy Extension Schema Document*
101.CAL XBRLTaxonomy Extension Calculation Linkbase Document*
101.DEF XBRLTaxonomy Extension Definition Linkbase Document* 
101.LAB XBRLTaxonomy Extension Label Linkbase Document*
101.PRE XBRLTaxonomy Extension Presentation Linkbase Document*

*Filed herewith
**Furnished herewith
Certain schedules and exhibits omitted pursuant to Item 601(b)(2) of Regulation S-K. SVAC agrees to furnish supplementally a copy of any omitted schedule and exhibits to the Securities and Exchange Commission upon request.
(1)Previously filed as an exhibit to our Current Report on Form 8-K filed on September 14, 2020 and incorporated by reference herein.
(2)

Previously filed as an exhibit to our Current Report on Form 8-K filed on February 22, 2021 and incorporated by reference herein.

(3)Previously filed as an exhibit to our Annual Report on Form 10-K filed on March 15, 2021 and incorporated by reference herein.


STARBOARD VALUE ACQUISITION CORP.

INDEX TO FINANCIAL STATEMENTS

Page
Report of Independent Registered Public Accounting FirmF-2
Financial Statements:
Balance Sheets as of December 31, 2020 (As Restated) and December 31, 2019 F-3
Consolidated Statements of Operations for the year ended December 31, 2020 (As Restated) and for the period from November 14, 2019 (inception) through December 31, 2019

F-1




Report of Independent Registered Public Accounting Firm


To the Stockholdersshareholders and the Board of Directors of

Starboard Value Acquisition Corp.

Cyxtera Technologies, Inc.


Opinion on the Financial Statements


We have audited the accompanying consolidated balance sheets of Starboard Value Acquisition Corp.Cyxtera Technologies, Inc. and subsidiaries (the “Company”"Company"), as of December 31, 20202022 and 2019,2021, and the related consolidated statements of operations, comprehensive loss, changes in stockholders’shareholders' equity, and cash flows, for each of the yearthree years in the period ended December 31, 2020 and for the period from November 14, 2019 (inception) through December 31, 2019,2022, and the related notes (collectively referred to as the “financial statements”"financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20202022 and 2019,2021, and the results of its operations and its cash flows for each of the yearthree years in the period ended December 31, 2020 and for the period from November 14, 2019 (inception) through December 31, 2019,2022, in conformity with accounting principles generally accepted in the United States of America.

Restatement of Financial Statements

As discussed in Note 2 to the financial statements, the Securities and Exchange Commission issued a public statement entitled Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”) (the “Public Statement”) on April 12, 2021, which discusses the accounting for certain warrants as liabilities. The Company previously accounted for its warrants as equity instruments. Management evaluated its warrants against the Public Statement, and determined that the warrants should be accounted for as liabilities. Accordingly, the 2020 financial statements have been restated to correct the accounting and related disclosure for the warrants.


Basis for Opinion


These financial statements are the responsibility of the Company’sCompany's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.


We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the auditsaudit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company'sCompany’s internal control over financial reporting. Accordingly, we express no such opinion.


Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.


/s/ WithumSmith+Brown, PC

Deloitte & Touche LLP


Miami, Florida
March 16, 2023

We have served as the Company's auditor since 2019.

New York, New York

May 12, 2021

2020.

59

STARBOARD VALUE ACQUISITION CORP.

BALANCE SHEETS

  December 31, 2020  December 31, 2019 
  (As Restated)    
Assets:        
Current assets:        
Cash $2,557,154  $72,751 
Prepaid expenses  223,840   - 
Total current assets  2,780,994   72,751 
Deferred offering costs associated with the proposed public offering  -   312,489 
Investments held in Trust Account  404,403,316   - 
Total Assets $407,184,310  $385,240 
         
Liabilities and Stockholders' Equity:        
Current liabilities:        
Accounts payable $12,223  $253,937 
Accrued expenses  70,000   - 
Franchise tax payable  200,841   565 
Note payable - related party  -   107,062 
Total current liabilities  283,064   361,564 
Deferred legal fees  250,000   - 
Derivative liabilities  47,320,290   - 
Deferred underwriting commissions in connection with the initial public offering  18,190,554   - 
Total liabilities  66,043,908   361,564 
         
Commitments and Contingencies (Note 6)        
Class A common stock; 33,614,040 shares subject to possible redemption at $10.00 per share  336,140,400   - 
         
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; 200,000,000 shares authorized; 6,809,413 shares issued and outstanding (excluding 33,614,040 and 0 shares subject to possible redemption) at December 31, 2020; none issued and outstanding at December 31, 2019  681   - 
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 10,105,863 shares issued and outstanding at December 31, 2020; 10,350,000 shares issued and outstanding at December 31, 2019 (1)  1,011   1,035 
Additional paid-in capital  32,088,858   23,965 
Accumulated deficit  (27,090,548)  (1,324)
Total stockholders' equity  5,000,002   23,676 
Total Liabilities and Stockholders' Equity $407,184,310  $385,240 

(1) This number includes up to 1,350,000 shares of common stock subject to forfeiture if the over-allotment option was not exercised in full or in part by the underwriters as



CYXTERA TECHNOLOGIES, INC.
Consolidated Balance Sheets
As of December 31, 2019. On September 18, 2020, the underwriters partially exercised the over-allotment option to purchase an additional 4,423,453 Units; thus, only 244,137 Class B common stock were forfeited accordingly. (see Note 5)

The2022 and 2021

(in millions, except share information)

20222021
Assets:
Current assets:
Cash$65.1 $52.4 
Accounts receivable, net of allowance of $0.1 and $0.328.3 18.3 
Prepaid and other current assets38.1 37.5 
Total current assets131.5 108.2 
Property and equipment, net1,638.6 1,530.8 
Operating lease right-of-use assets248.0 — 
Goodwill599.6 761.7 
Intangible assets, net427.6 519.8 
Other assets18.0 16.7 
Total assets$3,063.3 $2,937.2 
Liabilities and shareholders' equity:
Current liabilities:
Accounts payable$61.9 $57.9 
Accrued expenses81.4 65.3 
Current portion of operating lease liabilities35.3 — 
Current portion of long-term debt, finance leases and other financing obligations96.7 50.3 
Deferred revenue73.1 60.7 
Other current liabilities25.3 10.0 
Total current liabilities373.7 244.2 
Operating lease liabilities, net of current portion272.0 — 
Long-term debt, net of current portion853.5 896.5 
Finance leases and other financing obligations, net of current portion1,078.5 937.8 
Deferred income taxes26.0 29.9 
Warrant liabilities— 64.7 
Other liabilities75.3 158.2 
Total liabilities2,679.0 2,331.3 
Commitments and contingencies (Note 19)
Shareholders' equity:
Preferred Stock, $0.0001 par value; 10,000,000 shares authorized; none issued and outstanding— — 
Class A common stock, $0.0001 par value; 500,000,000 shares authorized; 179,683,659 and 166,207,190 shares issued and outstanding as of December 31, 2022, and December 31, 2021, respectively— — 
Additional paid-in capital1,968.0 1,816.5 
Accumulated other comprehensive (loss) income(7.2)10.8 
Accumulated deficit(1,576.5)(1,221.4)
Total shareholders' equity384.3 605.9 
Total liabilities and shareholders' equity$3,063.3 $2,937.2 
See accompanying notes are an integral partto consolidated financial statements
60


CYXTERA TECHNOLOGIES, INC.
Consolidated Statements of these financial statements.

Operations

STARBOARD VALUE ACQUISITION CORP.

STATEMENTS OF OPERATIONS

  For The Year Ended
December 31, 2020
  For the period from
November 14, 2019
(inception) through
December 31, 2019
 
  (As Restated)    
General and administrative expenses $138,416  $759 
Administrative expenses - related party  35,668   - 
Franchise tax expense  200,276   565 
Loss from operations  (374,360)  (1,324)
Other income (expense)        
Change in fair value of derivative liabilities  (26,329,220)  - 
Offering costs associated with derivative liabilities  (554,430)    
Net gain from investments held in Trust Account  168,786   - 
Net loss $(27,089,224) $(1,324)
         
Weighted average shares outstanding of Class A common stock  40,058,214   - 
Basic and diluted net income per share $-  $- 
Weighted average shares outstanding of Class B common stock  9,302,148(1)  9,000,000(1)
Basic and diluted net loss per share $(2.91) $(0.00)

(1) This number excludes up to 1,350,000 shares of common stock subject to forfeiture ifFor the over-allotment option was not exercised Years Ended December 31, 2022, 2021 and 2020

(in full or in part by the underwriters. On September 18, 2020, the underwriters partially exercised the over-allotment option to purchase an additional 4,423,453 Units; thus, only 244,137 Class B common stock were forfeited accordingly. (see Note 5)

Themillions, except share information)

202220212020
Revenues$746.0 $703.7 $690.5 
Operating costs and expenses:
Cost of revenues, excluding depreciation and amortization402.0 390.5 390.5 
Selling, general and administrative expenses144.3 112.8 115.5 
Depreciation and amortization243.0 240.6 231.8 
Goodwill impairment (Note 9)153.6 — — 
Restructuring, impairment, site closures and related costs (Note 5)5.2 69.8 — 
Transaction-related costs (Note 14)— 5.2 — 
Recovery of notes receivable from affiliate (Note 21)— — (97.7)
Total operating costs and expenses948.1 818.9 640.1 
(Loss) income from operations(202.1)(115.2)50.4 
Interest expense, net(163.3)(164.9)(169.4)
Other expenses, net(2.2)(0.1)(0.3)
Change in fair value of the warrant liabilities11.8 (25.5)— 
Loss from operations before income taxes(355.8)(305.7)(119.3)
Income tax benefit (expense)0.7 47.8 (3.5)
Net loss$(355.1)$(257.9)$(122.8)
Loss per Share
     Basic and diluted$(1.99)$(1.94)$(1.06)
Weighted average number of shares outstanding
     Basic and diluted178,144,676 133,126,171 115,745,455 
See accompanying notes are an integral partto consolidated financial statements
61


CYXTERA TECHNOLOGIES, INC.
Consolidated Statements of these financial statements.

Comprehensive Loss

STARBOARD VALUE ACQUISITION CORP.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

  For the Year Ended December 31, 2020 (As Restated) 
  Common Stock        Total 
  Class A  Class B  Additional Paid-In  Accumulated  Stockholders' 
  Shares  Amount  Shares  Amount  Capital  Deficit  Equity 
Balance - December 31, 2019  -  $-   10,350,000  $1,035  $23,965  $(1,324) $23,676 
Sale of units in initial public offering, less allocation to derivative liabilities  40,423,453   4,042   -   -   390,390,884   -   390,394,926 
Offering costs  -   -   -   -   (25,122,201)  -   (25,122,201)
Private placement proceeds paid by Sponsor in excess of initial fair value of private placement warrants  -   -   -   -   2,933,225   -   2,933,225 
Class B common stock forfeited  -   -   (244,137)  (24)  24   -   - 
Fair value of derivative liabilities issued in initial public offering and private placement  -   -   -   -   -   -   - 
Class A common stock subject to possible redemption  (33,614,040)  (3,361)  -   -   (336,137,039)  -   (336,140,400)
Net loss  -   -   -   -   -   (27,089,224)  (27,089,224)
Balance - December 31, 2020  6,809,413  $681   10,105,863  $1,011  $32,088,858  $(27,090,548) $5,000,002 

(1) This number includes up to 1,350,000 shares of common stock subject to forfeiture ifFor the over-allotment option was not exercised in full or in part by the underwriters as ofYears Ended December 31, 2019. On September 18,2022, 2021 and 2020 the underwriters partially exercised the over-allotment option to purchase an additional 4,423,453 Units; thus, only 244,137 Class B common stock were forfeited accordingly. (see Note 5)

  For the period from November 14, 2019 (inception) through December 31, 2019 
  Common Stock        Total 
  Class A  Class B  Additional Paid-In  Accumulated  Stockholders' 
  Shares  Amount  Shares  Amount  Capital  Deficit  Equity 
Balance - November 14, 2019 (inception)           -  $                -   -  $      -  $-  $-  $- 
Issuance of Class B common stock to Sponsor (1)  -   -   10,350,000   1,035   23,965   -   25,000 
Net loss  -   -   -   -   -   (1,324)  (1,324)
Balance - December 31, 2019  -  $-   10,350,000  $1,035  $23,965  $(1,324) $23,676 

The

(in millions)


202220212020
Net loss$(355.1)$(257.9)$(122.8)
Other comprehensive (loss) income:
Foreign currency translation adjustment(18.0)(5.9)8.7 
Other comprehensive (loss) income(18.0)(5.9)8.7 
Comprehensive loss$(373.1)$(263.8)$(114.1)
See accompanying notes are an integral partto consolidated financial statements
62


CYXTERA TECHNOLOGIES, INC.
Consolidated Statements of these financial statements.

Changes in Shareholders’ Equity

For the Years Ended December 31, 2022, 2021 and 2020

STARBOARD VALUE ACQUISITION CORP.

STATEMENT OF CASH FLOWS

  For The Year Ended
December 31, 2020
  For The Period From
November 14, 2019
(inception) through
December 31, 2019
 
  (As Restated)    
Cash Flows from Operating Activities:        
Net loss $(27,089,224) $(1,324)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:        
Change in fair value of derivative liabilities  26,329,220   - 
Offering costs associated with derivative liabilities  554,430   - 
Net gain from investments held in Trust Account  (168,786)  - 
Changes in operating assets and liabilities:        
Prepaid expenses  (223,840)  - 
Accounts payable  620   760 
Franchise tax payable  200,276   565 
Net cash provided by (used in) operating activities  (397,304)  1 
         
Cash Flows from Investing Activities        
Cash deposited in Trust Account  (404,234,530)  - 
Net cash used in investing activities  (404,234,530)  - 
         
Cash Flows from Financing Activities:        
Proceeds from issuance of Class B common stock to Sponsor  -   25,000 
Proceeds from note payable to related parties  41,500   100,000 
Repayment of note payable to related party  (141,500)  - 
Proceeds received from initial public offering, gross  404,234,530   - 
Proceeds received from private placement  10,084,691   - 
Offering costs paid  (7,102,984)  (52,250)
Net cash provided by financing activities  407,116,237   72,750 
         
Net change in cash  2,484,403   72,751 
         
Cash - beginning of the period  72,751   - 
Cash - end of the period $2,557,154  $72,751 
         
Supplemental disclosure of noncash financing activities:        
Offering costs included in accounts payable $7,666  $253,177 
Offering costs included in accrued expenses $70,000  $- 
Offering costs funded with note payable $7,062  $7,062 
Deferred underwriting commissions in connection with the initial public offering $18,190,554  $- 
Deferred legal fees $250,000  $- 
Initial value of Class A common stock subject to possible redemption $317,537,880  $- 
Change in initial value of Class A common stock subject to possible redemption $18,602,520  $- 
Forfeiture of Class B common stock $24  $- 

The

(in millions, except share information)

Class A common stockAdditional paid-in capitalAccumulated other comprehensive income (loss)Accumulated deficitTotal shareholders' equity
ShareAmount
Balance as of December 31, 20190.96$— $1,494.9 $8.0 $(840.7)$662.2 
Retroactive application of recapitalization115,745,454— — — — — 
Adjusted balance, beginning of period115,745,4551,494.98.0(840.7)662.2
Equity-based compensation— — 8.2 — — 8.2 
Cybersecurity Spinoff (2019)— — 1.5 — — 1.5 
Net loss— — — — (122.8)(122.8)
Other comprehensive income— — — 8.7 — 8.7 
Balance as of December 31, 2020115,745,455 — 1,504.6 16.7 (963.5)557.8 
Equity-based compensation— — 9.5 — — 9.5 
Capital redemption(9,645,455)— (97.9)— — (97.9)
Reverse recapitalization, net of transaction costs59,878,740 — 392.3 — — 392.3 
Capital contribution— — 5.2 — — 5.2 
Issuance of shares related to exercise of warrants228,450 — 2.8 — — 2.8 
Net loss— — — — (257.9)(257.9)
Other comprehensive loss— — — (5.9)— (5.9)
Balance as of December 31, 2021166,207,190 — 1,816.5 10.8 (1,221.4)605.9 
Equity-based compensation— — 22.3 — — 22.3 
Issuance of shares related to exercise of warrants4,859,162 — 54.2 — — 54.2 
Issuance of shares related to exercise of optional shares purchase options7,500,000 — 75.0 — — 75.0 
Net loss— — — — (355.1)(355.1)
Other comprehensive loss— — — (18.0)— (18.0)
Issuance of shares for Restrictive Stock Units vesting1,117,307 — — — — — 
Balance as of December 31, 2022179,683,659 $— $1,968.0 $(7.2)$(1,576.5)$384.3 
See accompanying notes are an integral partto consolidated financial statements
63


CYXTERA TECHNOLOGIES, INC.
Consolidated Statements of theseCash Flows
For the Years Ended December 31, 2022, 2021 and 2020
(in millions)
202220212020
Net loss$(355.1)$(257.9)$(122.8)
Cash flows from operating activities:
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization243.0 240.6 231.8 
Gain on sale of fixed assets(0.2)— — 
Restructuring, impairment, site closures and related costs— 2.0 — 
Amortization of favorable/unfavorable leasehold interests, net— 3.7 3.1 
Loss on extinguishment of debt and amortization of debt issuance costs and fees, net3.9 10.1 5.8 
Goodwill impairment (Note 9)153.6 — — 
Recovery of notes receivable from affiliate (Note 21)— — (97.7)
Equity-based compensation22.3 9.5 8.2 
Reversal of provision for doubtful accounts(0.5)(1.2)(5.5)
Change of fair value of warrant liabilities(11.8)25.5 — 
Deferred income taxes(2.3)(48.2)1.1 
Non-cash interest expense, net10.2 9.7 12.0 
Changes in operating assets and liabilities, excluding impact of acquisitions and dispositions:
Accounts receivable(10.9)16.4 37.4 
Prepaid and other current assets2.2 3.6 15.0 
Due from affiliates— — 0.8 
Other assets(2.8)6.5 4.3 
Operating lease right-of-use assets34.9 — — 
Operating lease liabilities(33.9)— — 
Accounts payable(0.8)(10.1)(7.1)
Accrued expenses17.0 (22.9)10.2 
Due to affiliates— (22.7)(2.1)
Other liabilities28.6 61.2 22.1 
Net cash provided by operating activities97.4 25.8 116.6 
Cash flows from investing activities:
Purchases for property and equipment(131.8)(77.5)(83.2)
Amounts received from (advanced to) affiliate (Note 21)— 117.1 (19.4)
Net cash (used in) provided by investing activities(131.8)39.6 (102.6)
Cash flows from financing activities:
Proceeds from issuance of long-term debt and other financing obligations42.0 40.0 91.7 
Proceeds from recapitalization, net of issuance costs— 434.5 — 
Capital contribution— 5.2 — 
Proceeds from sale-leaseback financing30.0 5.0 46.0 
Repayment of long-term debt(46.9)(461.7)(10.3)
Repayment of finance leases and other financing obligations(49.2)(62.1)(36.4)
Proceeds from the exercise of warrants, net of redemptions1.3 — — 
Proceeds from the exercise of the optional shares purchase options75.0 — — 
Capital redemption— (97.9)— 
Net cash provided by (used in) financing activities52.2 (137.0)91.0 
Effect of foreign currency exchange rates on cash(5.1)3.3 2.7 
Net increase (decrease) in cash12.7 (68.3)107.7 
Cash at beginning of period52.4 120.7 13.0 
Cash at end of period$65.1 $52.4 $120.7 
CYXTERA TECHNOLOGIES, INC.
Consolidated Statements of Cash Flows (continued)
For the Years Ended December 31, 2022, 2021 and 2020
(in millions)


202220212020
Supplemental cash flow information:
Cash (refund) paid for income taxes, net$(0.4)$4.5 $3.6 
Cash paid for interest$40.8 $58.6 $157.4 
Non-cash purchases of property and equipment$38.5 $65.7 $55.3 
See accompanying notes to consolidated financial statements.

statements

64

STARBOARD VALUE ACQUISITION CORP.



CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 1—Description of1.    Organization and Business Operations

description of the business


Cyxtera Technologies, Inc. (“Cyxtera” or the “Company”) is a global data center leader in retail colocation and interconnection services. Cyxtera’s data center platform consists of 65 data centers across 33 markets on three continents.

Cyxtera was incorporated in Delaware as Starboard Value Acquisition Corp. (the “Company”(“SVAC”) was incorporated in Delaware on November 14, 2019. The Company was formed forOn July 29, 2021 (the “Closing Date”), SVAC consummated the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similarpreviously announced business combination with one or more businesses (the “Initial Business Combination”). The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

As of December 31, 2020, the Company had not commenced any operations. All activity for the period from November 14, 2019 (inception) through December 31, 2020 relatespursuant to the Company’s formationAgreement and Plan of Merger, dated February 21, 2021 ( the initial public offering (the “Initial Public Offering”“Merger Agreement”), by and since the closingamong SVAC, Cyxtera Technologies, Inc. (now known as Cyxtera Technologies, LLC), a Delaware corporation (“Legacy Cyxtera”), Mundo Merger Sub 1, Inc., a Delaware Corporation and wholly owned subsidiary of the Initial Public Offering, the search for a prospective Initial Business Combination. The Company will not generate any operating revenues until after completion of its Initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the net proceeds derived from the Initial Public Offering. The Company has selected December 31stSVAC (“Merger Sub 1”), Mundo Merger Sub 2, LLC (now known as its fiscal year end.

The Company’s sponsor is SVAC Sponsor LLC,Cyxtera Holdings, LLC), a Delaware limited liability company (the “Sponsor”and wholly owned subsidiary of SVAC (“Merger Sub 2” and, together with Mundo Merger Sub 1, the “Merger Subs”), and Mundo Holdings, Inc. (“NewCo”), a Delaware corporation and wholly owned subsidiary of SIS Holdings LP, a Delaware limited partnership (“SIS”). The registration statement for the Initial Public Offering became effective on September 9, 2020. On September 14, 2020, the Company consummated its Initial Public Offering of 36,000,000 units (the “Units” and, with respectPursuant to the Class A common stock, par value $0.0001 per share, includedMerger Agreement, Legacy Cyxtera was contributed to NewCo and then converted into a limited liability company and, thereafter, Merger Sub 1 was merged with and into NewCo, with NewCo surviving such merger as a wholly owned subsidiary of SVAC and immediately following such merger and as part of the same overall transaction NewCo was merged with and into Merger Sub 2, with Merger Sub 2 surviving such merger as a wholly owned subsidiary of SVAC (the “Business Combination” and, collectively with the other transactions described in the Units offered,Merger Agreement, the “Public Shares”“Transactions”) at $10.00 per Unit, generating gross proceeds of $360.0 million,. On the Closing Date, and incurring offering costs of approximately $23.0 million, inclusive of $16.2 million in deferred underwriting commissions (Note 6). The underwriters were granted a 45-day option from the date of the final prospectus relating to the Initial Public Offering to purchase up to 5,400,000 additional Units to cover over-allotments, if any, at $10.00 per Unit, less underwriting discounts and commissions. On September 18, 2020, the underwriters partially exercised the over-allotment option and on September 23, 2020, purchased an additional 4,423,453 Units (the “Over-Allotment Units”), generating gross proceeds of approximately $44.2 million, and incurred additional offering costs of approximately $2.7 million (net of approximately $221,000 in reimbursement for certain expenses from the underwriters), including approximately $2.0 million in deferred underwriting fees.

Simultaneouslyconnection with the closing of the Initial Public Offering,Business Combination, SVAC changed its name to Cyxtera Technologies, Inc.


Unless otherwise indicated or the Company completedcontext otherwise requires, references in this Annual Report on Form 10-K to “we,” “us,” “our,” the private sale (the “Private Placement”) of an aggregate of 6,133,333 warrants (the “Private Placement Warrants”)“Company” and “Cyxtera” refer to the Sponsor, at a purchase priceconsolidated operations of $1.50 per Private Placement Warrant, generating gross proceedsCyxtera Technologies, Inc. and its subsidiaries. References to “SVAC” refer to Starboard Value Acquisition Corp. prior to the Companyconsummation of $9.2 million. In connection with the underwriters’ partial exercise of their over-allotment option, the Sponsor purchased an additional 589,794 Private Placement Warrants, generating gross proceeds to the Company of approximately $0.9 million.

Upon the closing of the Initial Public Offering, the Private Placement and the sale of the Over-Allotment Units and 589,794 additional Private Placement Warrants, $404.2 million ($10.00 per Unit) of the net proceeds of the sale of the Units in the Initial Public Offering, the Private Placement, the Over-Allotment Units and the additional Private Placement Warrants were placed in a trust account (“Trust Account”) located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and invested only in U.S. “government securities,” within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less, or in money market funds meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4) of Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations, as determined by the Company, until the earlier of: (i) the completion of an Initial Business Combination and (ii)references to “Legacy Cyxtera” refer to the distributionformer Cyxtera Technologies, Inc. (now known as Cyxtera Technologies, LLC) prior to the consummation of the Trust Account as described below.

Business Combination.


The Company’s management has broad discretion with respect to

Legacy Cyxtera was deemed the specific applicationaccounting acquirer in the Business Combination based on an analysis of the net proceeds of the Initial Public Offering and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating an Initial Business Combination. There is no assurance that the Company will be able to complete an Initial Business Combination successfully. The Company must complete one or more Initial Business Combinations having an aggregate fair market value of at least 80% of the value of the Trust Account (excluding any deferred underwriting discount and taxes payable on the income earned on the Trust Account) at the time of the agreement to enter into the Initial Business Combination. However, the Company will only complete an Initial Business Combination if the post-transaction company owns or acquires 50% or more of the voting securities of the target or otherwise acquires a controlling interestcriteria outlined in the target sufficient for it not to be required to register as an investment company under the Investment Company Act.

The Company will provide holders of the Public Shares (the “Public Stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of an Initial Business Combination either (i) in connection with a stockholder meeting called to approve the Initial Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of an Initial Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then held in the Trust Account (initially anticipated to be $10.00 per Public Share). The per-share amount to be distributed to Public Stockholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 6). The redemption rights will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. These Public Shares will be recorded at a redemption value and classified as temporary equity upon the completion of the Initial Public Offering in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” In such case,805, Business Combinations. This determination was primarily based on Legacy Cyxtera’s stockholders prior to the Company will proceed with an Initial Business Combination if the Company has net tangible assets of at least $5,000,001 upon consummation of such Initial Business Combination andhaving a majority of the shares voted are votedvoting power in favorthe combined company, Legacy Cyxtera having the ability to appoint a majority of the Initialboard of directors of the combined company, Legacy Cyxtera’s existing management comprising the senior management of the combined company, Legacy Cyxtera’s operations comprising the ongoing operations of the combined company, Legacy Cyxtera being the larger entity based on historical revenues and business operations and the combined company assuming Legacy Cyxtera’s name. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Legacy Cyxtera issuing stock for the net assets of SVAC, accompanied by a recapitalization. The net assets of SVAC are stated at historical cost, with no goodwill or other intangible assets recorded.


While SVAC was the legal acquirer in the Business Combination, because Legacy Cyxtera was deemed the accounting acquirer, the historical financial statements of Legacy Cyxtera became the historical financial statements of the combined company upon the consummation of the Business Combination. IfAs a stockholder vote is not required by law andresult, the Company does not decide to hold a stockholder vote for business or other legal reasons,financial statements included in this report reflect: (i) the Company will, pursuant to its Certificatehistorical operating results of Incorporation (the “Certificate of Incorporation”), conduct the redemptions pursuantLegacy Cyxtera prior to the tender offer rulesBusiness Combination; (ii) the consolidated results of SVAC and Legacy Cyxtera following the close of the U.S. SecuritiesBusiness Combination; (iii) the assets and Exchange Commission (“SEC”)liabilities of Legacy Cyxtera at their historical cost; and file tender offer documents(iv) the Company’s equity structure for all periods presented.

In accordance with guidance applicable to these circumstances, the SEC priorequity structure has been restated in all comparative periods up to completing an Initial Business Combination. If, however, stockholder approvalthe Closing Date to reflect the number of shares of the transaction is required by law, or the Company decidesCompany’s Class A common stock, $0.0001 par value per share (“Class A common stock”), issued to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Additionally, each Public Stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction. If the Company seeks stockholder approval in connection with an Initial Business Combination, the Sponsor and the Company’s officers and directors have agreed to vote their Founder Shares (as defined below in Note 5) and any Public Shares purchased during or after the Initial Public Offering in favor of an Initial Business Combination. In addition, the Sponsor and the Company’s officers and directors have agreed to waive their redemption rights with respect to their Founder Shares and Public SharesLegacy Cyxtera’s shareholders in connection with the completionBusiness Combination. As such, the shares and corresponding capital amounts and earnings per
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CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

share related to Legacy Cyxtera common stock prior to the Business Combination have been retroactively restated as shares of an InitialClass A common stock reflecting the effective exchange ratio of 120,568,182 utilized in the Business Combination.

Notwithstanding the foregoing, the Certificate of Incorporation provides that a Public Stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 Refer to Note 3 for further discussion of the Securities Exchange ActCyxtera and SVAC Business Combination.


The Company has a revolving facility of 1934,$120.1 million ($42.0 million drawn as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respectof December 31, 2022) and long-term debt of $869.0 million, which would have matured in November 2023 and May 2024, respectively. Subsequent to more than an aggregate of 15% or more ofyear-end, the Public Shares, without the prior consent of the Company.

The Sponsor and the Company’s officers and directors have agreed not to proposeCompany entered into an amendment to its revolving facility which, among other things, extended the Certificate of Incorporationmaturity date under such facility to April 2, 2024. See Note 22—Subsequent Events for more information. Based on our current forecast, which considers quantitative factors that would affect the substanceare known or timing of the Company’s obligation to redeem 100% of the Public Shares if the Company does not complete an Initial Business Combination within the time frame described below, unless the Company provides the Public Stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.

If the Company is unable to complete an Initial Business Combination within 24 months from the closing of the Initial Public Offering, or September 14, 2022 (the “Combination Period”), the Company will (i) cease all operations, except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then-outstanding Public Shares, which redemption will completely extinguish the Public Stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and its board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.


The Sponsor and the Company’s officers and directors have agreed to waive their liquidation rights with respect to the Founder Shares if the Company fails to complete an Initial Business Combination within the Combination Period. However, if the Sponsor and the Company’s officers and directors should acquire Public Shares in or after the Initial Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete an Initial Business Combination within the Combination Period. The underwriters have agreed to waive their rights to the deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete an Initial Business Combination within in the Combination Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be only $10.00. In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party (except for the Company’s independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company has entered into a transaction agreement reduce the amount of funds in the Trust Account to below the lesser of  (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the Trust Account due to reductions in the value of the trust assetsknowable as of the date of these financial statements, including the liquidationamendment described above, we believe that the cash generated from operations will be sufficient to fund our operating activities for at least the next twelve months from the date of the Trust Account, in each case including interest earned on the funds held in the Trust Accountissuance of these financial statements. We are actively attempting to extend, refinance or repay our long-term debt and not previously releasedare taking actions to improve our operating cash flows. However, if the Company to paycannot successfully extend its franchiserevolving credit facility and income taxes, less franchise and income taxes payable. This liability will not apply with respect to any claims by a third partylong-term debt, or target that executed an agreement waiving claims against and all rights to seek access torefinance or repay the Trust Account whether or not such agreement is enforceable or to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (except for the Company’s independent registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

Liquidity and Capital Resources

As of December 31, 2020, the Company had approximately $2.6 million in its operating bank account, and working capital of approximately $2.5 million.

The Company’s liquidity needs to date have been satisfied through the payment of $25,000 from the Sponsor to purchase the Founder Shares, the loan under the Note (as defined below in Note 5) of approximately $141,000 (see Note 5) from the Sponsor,revolving credit facility and the netlong-term debt (which mature on April 2, 2024 and May 1, 2024, respectively) with proceeds from the consummationother sources, such as new debt, equity capital, or sales of the Private Placement not held in the Trust Account. The Company fully repaid the Note on September 14, 2020. In addition, in order to finance transaction costs in connection with an Initial Business Combination, the Sponsor or an affiliate of the Sponsor, or the Company’s officers and directors may, but are not obligated to, provide the Company Working Capital Loans (as defined below in Note 5). As of December 31, 2020, there were no Working Capital Loans outstanding.

Based on the foregoing, management believes thatassets, the Company will have sufficient working capital and borrowing capacity from the Sponsor or an affiliate of the Sponsor, or the Company’s officers and directorsnot be able to meet its needs through the earlier of the consummation of an Initial Business Combination or one yearfinancial obligations due beyond twelve months from this filing. Over this time period, the Company will be using these funds for paying accounts payable, identifying and evaluating prospective Initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Initial Business Combination.


Management continues to evaluate the impact of the COVID-19 pandemic and has concluded that the specific impact is not readily determinable as of the date of the balance sheet. Theissuance of these December 31, 2022 financial statements do not include any adjustments that might resultand specifically twelve months from the outcomeApril 2, 2023.

Note 2.    Summary of this uncertainty.

Note 2 —Restatement of Previously Issued Financial Statements

In May 2021, the audit committee of the Company, in consultation with management, concluded that, because of a misapplication of thesignificant accounting guidance related to its warrants to purchase common stock that the Company issued in September 2020 (the “Warrants”) and its forward purchase agreement (as defined below), the Company’s previously issued financial statements for the Affected Periods (as defined below) should no longer be relied upon.  As such, the Company is restating its financial statements for the Affected Periods included in this Annual Report.

On April 12, 2021, the staff of the Securities and Exchange Commission (the “SEC Staff”) issued a public statement entitled “Staff Statement on Accounting and Reporting Considerations for Warrants issued by Special Purpose Acquisition Companies (“SPACs”)” (the “SEC Staff Statement”). In the SEC Staff Statement, the SEC Staff expressed its view that certain terms and conditions common to SPAC warrants may require the warrants to be classified as liabilities on the SPAC’s balance sheet as opposed to equity. Since issuance in September 2020, the Company’s warrants and forward purchase agreement were accounted for as equity within the Company’s previously reported balance sheets. After discussion and evaluation, including with the Company’s independent registered public accounting firm and the Company’s audit committee, management concluded that the warrants and forward purchase agreement should be presented as liabilities with subsequent fair value remeasurement.

Historically, the Warrants and forward purchase agreement were reflected as a component of equity as opposed to liabilities on the balance sheets and the statements of operations did not include the subsequent non-cash changes in estimated fair value of the Warrants and forward purchase agreement, based on the Company's application of FASB ASC Topic 815-40, Derivatives and Hedging, Contracts in Entity’s Own Equity (“ASC 815-40). The views expressed in the SEC Staff Statement were not consistent with the Company’s historical interpretation of the specific provisions within its warrant agreement and the Company’s application of ASC 815-40 to the warrant agreement. The Company reassessed its accounting for the Warrants issued in September 2020 and the forward purchase agreement, in light of the SEC Staff’s published views. Based on this reassessment, management determined that the Warrants and forward purchase agreement should be classified as liabilities measured at fair value upon issuance, with subsequent changes in fair value reported in the Company’s Statement of Operations for each reporting period.

Impact of the Restatement

The impact of the restatement on the balance sheets and statements of operations for the Affected Periods is presented below. The restatement had no impact on net cash flows from operating, investing or financing activities.

policies


  As of December 31, 2020 
  As Previously Reported  Restatement Adjustment  As Restated 
    
Balance Sheet            
Total assets $407,184,310  $-  $407,184,310 
Liabilities and stockholders’ equity            
Total current liabilities $283,064  $-  $283,064 
Deferred legal fees  250,000       250,000 
Deferred underwriting commissions  18,190,554   -   18,190,554 
Derivative liabilities  -   47,320,290   47,320,290 
Total liabilities  18,723,618   47,320,290   66,043,908 
Class A common stock, $0.0001 par value; shares subject to possible redemption  383,460,690   (47,320,290)  336,140,400 
Stockholders’ equity            
Preferred stock - $0.0001 par value  -   -   - 
Class A common stock - $0.0001 par value  208   473   681 
Class B common stock - $0.0001 par value  1,011   -   1,011 
Additional paid-in-capital  5,205,681   26,883,177   32,088,858 
Accumulated deficit  (206,898)  (26,883,650)  (27,090,548)
Total stockholders’ equity  5,000,002   -   5,000,002 
Total liabilities and stockholders’ equity $407,184,310  $-  $407,184,310 
             

  For The Year Ended December 31, 2020 
  As Previously Reported  Restatement Adjustment  As Restated 
    
Statement of Operations            
Loss from operations $(374,360) $-  $(374,360)
Other (expense) income:            
  Change in fair value of derivative warrant liabilities  -   (26,329,220)  (26,329,220)
  Financing costs  -   (554,430)  (554,430)
  Net gain on investments held in Trust Account  168,786   -   168,786 
Total other (expense) income  168,786   (26,883,650)  (26,714,864)
Net loss $(205,574) $(26,883,650) $(27,089,224)
             
Basic and Diluted weighted-average Class A common stock outstanding  40,058,214   -   40,058,214 
Basic and Diluted net loss per Class A share $-   -  $- 
Basic and Diluted weighted-average Class B common stock outstanding  9,302,148   -   9,302,148 
Basic and Diluted net loss per Class B share $(0.02)  -  $(2.64)

In addition, the impact to the balance sheet dated September 14, 2020, filed by the Company with the SEC on Form 8-K on September 18, 2020 related to the impact of accounting for the warrants and the forward purchase agreement as liabilities at fair value resulted in a $21 million increase to the derivative liabilities line item at September 14, 2020 and offsetting decrease to the Class A common stock subject to possible redemption mezzanine equity line item. There is no change to total stockholders’ equity at the reported balance sheet date.

Note 3—

a)Basis of Presentationpresentation and Summaryuse of Significant Accounting Policies

Basis of Presentation

estimates


The accompanying consolidated financial statements are presented in U.S. dollars, in conformityaccordance with US generally accepted accounting principles generally accepted in(“US GAAP”), which require management to make estimates and assumptions that affect the United Statesreported amounts of America (“GAAP”) for financial informationassets, liabilities, revenues and pursuant to the rules and regulations of the SEC.

As described in Note 2—Restatement of Previously Issued Financial Statements, the Company’s financial statements for the period as of December 31, 2020,expenses, and the year ended December 31, 2020related disclosure of contingent assets and as of September 30, 2020liabilities. Actual results could differ from these estimates and forassumptions. On an ongoing basis, the three and nine months ended September 30, 2020 (collectively, the “Affected Periods”), are restated in this Annual Report on Form 10-K/A (Amendment No. 1) (this “Annual Report”) to correct the misapplication of accounting guidance related to the Company’s warrants in the Company’s previously issued audited and unaudited condensed financial statements for such periods. The restated financial statements are indicated as “Restated” in the audited and unaudited condensed financial statements and accompanying notes, as applicable. See Note 2—Restatement of Previously Issued Financial Statements for further discussion.


Emerging Growth Company

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act, and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companiesevaluates its estimates, including, but not limited to, not being requiredthose related to comply with the auditor attestation requirementsallowance for doubtful accounts, fair values of Section 404financial instruments, intangible assets and goodwill, useful lives of the Sarbanes-Oxley Act of 2002, reduced disclosureintangible assets and property and equipment, assets acquired, and liabilities assumed from acquisitions, asset retirement obligations regarding executive compensation in its periodic reports and proxy statements,income taxes.


b)Risks 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.

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 an emerging growth 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. The Company has 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, the Company, 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 the Company’s financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Use of Estimates

The preparation ofuncertainties


Preparing financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and liabilitiesexpenses. Examples include, but are not limited to, asset and disclosuregoodwill impairments, allowance for doubtful accounts, stock-based compensation forfeiture rates, the incremental borrowing rate for leases, future asset retirement obligations and the potential outcome of contingent assetsfuture tax consequences of events that have been recognized in the consolidated financial statements. Actual results and liabilities atoutcomes may differ from these estimates and assumptions due to risks and uncertainties, including uncertainty in the datecurrent economic environment.

c)Principles of consolidation and foreign currency translation

The consolidated financial statements include Cyxtera accounts and the accounts of entities in which Cyxtera has a controlling financial interest, the usual condition of which is ownership of a majority voting interest. All material intercompany balances and transactions have been eliminated in consolidation.

The functional currency of each of the Company’s operating subsidiaries is generally the currency of the economic environment in which the subsidiary primarily does business. The Company’s foreign subsidiaries’ financial statements are translated into dollars using the foreign exchange rates applicable to the dates of the financial statements. Assets and liabilities are translated using the end-of-period foreign exchange spot rates. Income and expenses are translated at the average foreign exchange rates for each period. Equity accounts are translated at historical foreign exchange rates. The effects of these translation adjustments are reported as a component of accumulated other comprehensive income (loss) (“AOCI”) in the consolidated statements of shareholders’ equity.
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CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


For any transaction that is denominated in a currency different from the transacting entity’s functional currency, the Company records a gain or loss based on the difference between the foreign exchange rate at the transaction date and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existedforeign exchange rate at the transaction settlement date of the financial statements,(or rate at period end, if unsettled) which management considered in formulating its estimate, could changeis included within selling, general and administrative expenses in the near term due to one or more future confirming events. Actual results could differ from those estimates.

Cashconsolidated statements of operations.


d)Financial instruments and Cash Equivalents

The Company considers all short-term investments with an original maturityconcentrations of three months or less when purchased to be cash equivalents. The Company had no cash equivalents as of December 31, 2020.

Concentration of Credit Risk

credit risk


Financial instruments that potentially subject the Company to concentrationconcentrations of credit risk consist of accounts receivable. The Company operates primarily in the United States; realization of its customer accounts receivable and its future operations and cash accountsflows could be affected by adverse economic conditions in the United States. During the years ended December 31, 2022, 2021 and 2020, Lumen Technologies Inc, formerly known as CenturyLink Inc., (“Lumen”), the Company’s largest customer, accounted for approximately 10%, 11%, and 14%, respectively, of the Company’s consolidated revenue. Revenues from Lumen are recognized pursuant to a Master Services Agreement (the “MSA”), dated May 1, 2017, between the Company and Lumen. The MSA originally had an initial term of three years, subject to renewal, and contained provisions related to rental of space for an initial term of 10 years, subject to renewal – see Note 11—Leases, for the related disclosure on minimum lease receipts. On July 10, 2020, the Company entered into a new master agreement with Lumen (the “Master Agreement”). The Master Agreement replaced the MSA with retroactive effect to May 1, 2020, and provides for services with staggered terms through April 30, 2025. Provisions related to the rental of space were included on substantially the same terms as provided under the MSA. In connection with the execution and delivery of the Master Agreement, the Company also settled various other amounts due from and due to Lumen, which resulted in a financial institution which,net gain of approximately $11.0 million. This net gain will be recognized over the five-year term of the Master Agreement. During the years ended December 31, 2022, 2021 and 2020, no other customer accounted for more than 5% of the Company’s consolidated revenues.

e)Property and equipment

Property and equipment is recorded at times, may exceed the Federal depository insurance coverageCompany’s original cost or fair value for property, plant and equipment acquired through acquisition, net of $250,000,accumulated depreciation and investments heldamortization. In general, depreciation is computed using the straight-line method over the estimated useful life of the asset being depreciated. Leasehold improvements are amortized over the shorter of the useful life of the asset or the length of the expected lease term. When property, plant and equipment is sold or otherwise disposed of, the costs and accumulated depreciation are generally removed from the accounts and any gain or loss is recognized in the Trust Account.income.

The estimated useful lives used in computing depreciation and amortization are as follows:

Asset classEstimated useful
lives (years)
Buildings10—40
Leasehold improvements3—40
Personal property2—15

The Company’s construction in progress is stated at original cost. Construction in progress consists of costs incurred under construction contracts, including services related to project management, engineering and schematic design, design development and construction and other construction-related fees and services. The Company has not experienced losses on these accountscontracted out substantially all of its current construction and management believesexpansion projects to independent contractors. In addition, the Company is not exposedgenerally capitalizes interest costs during the construction phase. During the years ended December 31, 2022 and 2021, the Company capitalized interest of $4.5 million and $1.7 million, respectively. At the time a construction or expansion project becomes operational, these capitalized costs are allocated to significant risks on such accounts.

Investments Held incertain property and equipment assets and are depreciated over the Trust Account

The Company’s portfolio of investments held in the Trust Account is comprised of U.S. government securities, within the meaning set forth in Section 2(a)(16)estimated useful lives of the Investment Company Act, withunderlying assets.


Major improvements are capitalized, while maintenance and repairs are expensed when incurred.
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f)Long-lived assets

Long-lived assets, such as property, plant and equipment and intangible assets subject to amortization, are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Some of the events and circumstances that would trigger an impairment review include, but are not limited to, a maturitysignificant decrease in market price of 185 daysa long-lived asset, a significant adverse change in legal factors or less, or investments in money market fundsbusiness climate that invest in U.S. government securities,could affect the value of a long-lived asset, or a combination thereof. Thecontinuous deterioration of the Company’s investmentsfinancial condition. Recoverability of assets to be held inand used is assessed by comparing the Trust Account are classified as trading securities. Trading securities are presentedcarrying amount of an asset to estimated undiscounted future net cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized based on the balance sheetamount by which the carrying amount of the asset exceeds the fair value of the asset. The Company did not record any impairment charges on long-lived assets during the years ended December 31, 2022, 2021 and 2020.

g)Asset retirement obligations

The Company has asset retirement obligations (each an “ARO”) primarily associated with its obligations to retire long-lived assets from leased properties under long-term arrangements and, to a lesser extent, the removal and disposal of fuel tanks from both leased and owned properties. AROs are initially measured at fair value and recognized at the endtime the obligation is incurred. Upon initial recognition, a liability for the retirement obligation is recorded. The associated cost is capitalized as part of each reporting period. Gainsthe cost basis of the related long-lived asset and losses resultingdepreciated over the useful life of that asset. We have several leases that require remediation of the leased premises and/or removal of all of the Company’s owned property and equipment from the change inleased premises at the expiration of the lease term. The Company’s ARO liability associated with these activities is recorded within other liabilities and was $7.2 million and $6.9 million as of December 31, 2022 and 2021, respectively, and the related cost is capitalized within property, plant and equipment on the consolidated balance sheets.

h)Goodwill

Goodwill is calculated as the excess of the purchase price over the fair value of these investmentsassets acquired and liabilities assumed in connection with a business combination. Goodwill will not be amortized, but rather tested for impairment at least annually or more often if an event occurs or circumstances change which indicate impairment might exist. Goodwill is evaluated at the reporting unit level. The Company has identified a single reporting unit.

The Company conducts goodwill impairment testing as of October 1st of each year or whenever an indicator of impairment exists. The Company has the option to assess qualitative factors to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value. If, after assessing the qualitative factors, the Company determines that it is not more-likely-than-not that the fair value of a reporting unit is less than its carrying value, then the Company will not be required to perform a quantitative test. However, if the Company concludes that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value, then it is required to perform a quantitative impairment test. The quantitative test compares the fair value of a reporting unit with its carrying value, including goodwill. If the carrying value of the reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.

i)Debt issuance costs and fees

Debt issuance costs and fees are included incapitalized and amortized over the term of the related loans based on the effective interest method. Such amortization is a component of interest expenses, net gain from investments held in Trust Account inon the accompanying statementconsolidated statements of operations. The estimated fair values of investments held in the Trust AccountDebt issuance costs related to outstanding debt are determined using available market information, other than for investments in open-ended money market funds with published daily net asset values (“NAV”), in which case the Company uses NAVpresented as a practical expedientreduction of the carrying amount of the debt liability and debt issuance fees related to fair value. The NAVthe Revolving Facility (as defined in Note 12—Long-term debt) are presented within other assets on these investments is typically held constant at $1.00 per unit.

the Company’s consolidated balance sheets.


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j)Fair Value of Financial Instruments

value measurements


Fair value is defined as the price that would be received for sale ofto sell an asset or paid forto transfer of a liability in an orderly transaction between market participants in the principal market, or if none exists, the most advantageous market, for the specific asset or liability at the measurement date. GAAP establishes a three-tierdate (the exit price). The fair value hierarchy, which prioritizesis based on assumptions that market participants would use when pricing the inputs used in measuringasset or liability. The fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:

Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

Level 2, defined as inputs other than quoted prices in active markets thatvalues are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

In some circumstances, the inputs used to measure fair value might be categorizedassigned a level within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy, baseddepending on the lowest level input that is significantsource of the inputs to the fair value measurement.

Ascalculation, as follows:


Input levelDescription of input
Level 1Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets
Level 2Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly
Level 3Unobservable inputs reflecting management's own assumptions about the inputs used in pricing the asset or liability

k)Revenue

Revenue recognition

Cyxtera derives the majority of December 31, 2020,its revenues from recurring revenue streams, consisting primarily of colocation service fees. The Company derives revenue from colocation service fees, which include fees for the carrying valueslicensing of cash, accounts payable, accrued expensesspace, power and franchise tax payable approximate their fair values dueinterconnection services. The Company derives the significant majority of its colocation revenue from sales to customers in the United States, based upon the service address of the customer. Revenue derived from customers outside the United States, based upon the service address of the customer, was not significant in any individual foreign country. The remainder of the Company’s revenues are derived from non-recurring charges, such as installation fees and professional services, including remote support to troubleshoot technical issues and turnkey structured cabling solutions. The Company’s revenue contracts are accounted for in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”), with the exception of certain contracts that contain lease components and are accounted for in accordance with ASC Topic 842, Leases (“Topic 842”).

Under the revenue accounting guidance, revenues are recognized when control of these products and services is transferred to the short-term natureCompany’s customers, in an amount that reflects the consideration it expects to be entitled to in exchange for the products and services. Revenues from recurring revenue streams are generally invoiced monthly in advance and recognized ratably over the term of the instruments. The Company’s investments held in the Trust Account are comprised of investments in U.S. Treasury securities with an original maturity of 185 days or less or investmentscontract, which is generally three years. Non-recurring installation fees, although generally invoiced in a money market funds that comprise only U.S. treasury securitieslump sum upon installation, are deferred and recognized ratably over the contract term. Professional service fees and equipment sales are also generally invoiced in a lump sum upon service delivery and are recognized at fair value.  The fair value of investments held in the Trust Accountperiod when the services are provided or the equipment is delivered. For contracts with customers that contain multiple performance obligations, the Company accounts for individual performance obligations separately if they are distinct or as a series of distinct obligations if the individual performance obligations meet the series criteria. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. The transaction price is allocated to the separate performance obligation on a relative standalone selling price basis. The standalone selling price is determined using quoted pricesbased on overall pricing objectives, taking into consideration market conditions, geographic locations and other factors. Other judgments include determining if any variable consideration should be included in active markets, other than for investments in open-ended money market funds with published daily NAV, in which case the Company uses NAV as a practical expedient to fair value.

The fairtotal contract value of the Public Warrantsarrangement, such as price increases.


Revenue is generally recognized on a gross basis in accordance with the accounting standard related to reporting revenue on a gross basis as a principal versus on a net basis as an agent, as the Company is primarily responsible for fulfilling the contract, bears inventory risk and Private Placement Warrantshas discretion in establishing the price when selling to the customer. To the extent the Company does not meet the criteria for recognizing revenue on a gross basis, the Company records the revenue on a net basis.

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The Company estimates credits on contractual billings using historical data and recognizes an allowance that reduces net sales. Historically, these credits have not been significant.

Occasionally, the Company enters into contracts with customers for data center, office and storage spaces, which contain lease components. The Company’s leases with customers are generally classified as operating leases and lease payments are recognized on a straight-line basis over the lease term. Lease revenues are included within revenues in the Company’s consolidated statements of operations.

Taxes collected from customers and remitted to governmental authorities are reported on a net basis and are excluded from revenue.

Contract balances

The timing of revenue recognition, billings and cash collections result in accounts receivables, contract assets and deferred revenues. A receivable is recorded at the invoice amount, net of an allowance for doubtful accounts and is recognized in the period in which the Company has transferred products or provided services to its customers and when its right to consideration is unconditional. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 45 days. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that the Company’s contracts generally do not include a significant financing component. The Company assesses collectability based on a number of factors, including past transaction history with the customer and the credit-worthiness of the customer. The Company generally does not request collateral from its customers. The Company also maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments that the Company had expected to collect. If the financial condition of the Company’s customers deteriorates or if they become insolvent, resulting in an impairment of their ability to make payments, greater allowances for doubtful accounts may be required. Management specifically analyzes accounts receivable and current economic news and trends, historical bad debts, customer concentrations, customer credit-worthiness and changes in customer payment terms when evaluating revenue recognition and the adequacy of the Company’s reserves. Any amounts that were initially measured at fair value using a modified Black-Scholes option pricing modelpreviously recognized as revenue and subsequently determined to be uncollectable are charged to bad debt expense, which is included in selling, general and administrative expenses in the fair valueconsolidated statements of operations. Delinquent account balances are written off after management has determined that collection is not probable.

A contract asset exists when the Company has transferred products or provided services to its customers, but customer payment is contingent upon satisfaction of additional performance obligations. Certain contracts include terms related to price arrangements such as price increases and free months. The Company recognizes revenues ratably over the contract term, which could potentially give rise to contract assets during certain periods of the Public Warrantscontract term. Contract assets are recorded in prepaid and Private Placement Warrants have beenother current assets and other assets in the consolidated balance sheets.

Deferred revenue (a contract liability) is recognized when the Company has an unconditional right to a payment before we transfer products or services to customers. Deferred revenue is included in other current liabilities and other liabilities in the consolidated balance sheets.

Contract costs

Direct and indirect incremental costs solely related to obtaining revenue generating contracts are capitalized as costs of obtaining a contract when they are incremental and if they are expected to be recovered. Such costs consist primarily of commission fees and sales bonuses, contract fulfillment costs, as well as other related payroll costs. Contract costs are amortized over the estimated usingperiod of benefit, which is estimated as three years, on a modified Black-Scholes option pricing modelstraight-line basis.

For further information on revenue recognition, see Note 6—Revenue.

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l)Leases

The Company determines if an arrangement is or contains a lease at each measurement date, otherits inception. The Company enters into lease arrangements primarily for data center spaces, office spaces and equipment. The Company recognizes a right-of-use (“ROU”) asset and lease liability on the consolidated balance sheets for all leases with a term longer than 12 months, including renewals.

ROU assets represent the Company’s right to use an underlying asset for the Detachable Redeemable Warrants (as defined below), which have beenlease term. Lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are classified and recognized at the commencement date. Lease liabilities are measured based on the listed market pricepresent value of such warrants, a Level 1fixed lease payments over the lease term. ROU assets consist of (i) initial measurement since November 2020.

Offering Costs Associated withof the Initial Public Offering

Offering costs consisted of legal, accounting, underwriting feeslease liability; (ii) lease payments made to the lessor at or before the commencement date less any lease incentives received; and other(iii) initial direct costs incurred throughby the Initial Public OfferingCompany. Lease payments may vary because of changes in facts or circumstances occurring after the commencement, including changes in inflation indices. Variable lease payments that were directly related todepend on an index or a rate (such as the Initial Public Offering. Offering costsConsumer Price Index or a market interest rate) are allocated to the separable financial instruments issuedincluded in the Initial Public Offeringmeasurement of ROU assets and lease liabilities using the index or rate at the commencement date. Variable lease payments that do not depend on an index or a rate are excluded from the measurement of ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. Since most of the Company’s leases do not provide an implicit rate, the Company uses its own incremental borrowing rate (“IBR”) on a collateralized basis in determining the present value of lease payments. The Company utilizes a market-based approach to estimate the IBR. The approach requires significant judgment. Therefore, the Company utilizes different data sets to estimate IBRs via an analysis of (i) yields on our outstanding traded bank loans (ii) yields on comparable credit rating composite curves and (iii) yields on comparable market curves.


The majority of the Company’s lease arrangements include options to extend the lease. If the Company is reasonably certain to exercise such options, the periods covered by the options are included in the lease term. The Company recognizes rental expenses for operating leases that contain predetermined fixed escalation clauses on a straight-line basis over the expected term of the lease. The depreciable lives of certain fixed assets and leasehold improvements are limited by the expected lease term. The Company has certain leases that have an initial term of 12 months or less and do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise. For such leases, the Company elected not to recognize any ROU asset or lease liability on the consolidated balance sheets. The Company has lease agreements with lease and non-lease components. The Company elected to account for the lease and non-lease components as a single lease component for all classes of underlying assets for which the Company has identified lease arrangements with non-lease components.

Lease modifications

In the normal course of business, the Company may modify leases, which could result in a change from the original lease classification (i.e. finance or operating leases). The Company remeasures the lease liability based on a relative fair value basis, compared to total proceeds received. Offering costs associated with derivative liabilities are expensed as incurred, presented as non-operating expenses in the statement of operations. Offering costs associated with the issuance of Class A common stock were charged to stockholders’ equity upon the completionlease term of the Initial Public Offering in September 2020.


Class A Common Stock Subject to Possible Redemption

modified leases by discounting revised lease payments using a revised IBR at the effective date of the modification. The Company accounts for its Class A common stock subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilitiesremeasurement of lease liabilities and lease incentives from Equity.” Shares of Class A common stock subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Shares of conditionally redeemable Class A common stock (including Class A common stock 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 the Company’s control) are classified as temporary equity. At all other times, shares of Class A common stock are classified as stockholders’ equity. The Company’s Class A common stock features certain redemption rights that are considered to be outside of the Company’s control and subjectlessor by making corresponding adjustments to the occurrencerelevant right-of-use asset.


m)Restructuring charges

If the Company commits to a plan to dispose of uncertain future events. Accordingly,a long-lived asset before the end of its previously estimated useful life or changes its use of assets and estimated cash flows are revised accordingly, the Company may be required to record an asset impairment charge. Additionally, related liabilities may arise such as severance, contractual obligations and other accruals associated with site closures from decisions to dispose of December 31, 2020, 33,614,040 shares of Class A common stock subject to possible redemption are presented as temporary equity, outside ofassets. The Company estimates these liabilities based on the stockholders’ equity section offacts and circumstances in existence for each restructuring decision. The amounts the Company’s balance sheets.

DerivativeCompany will ultimately realize or disburse could differ from the amounts assumed in arriving at the asset impairment and restructuring charges recorded.


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

n)Warrant Liabilities


The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company evaluates all of its financial instruments including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 480, Distinguishing Liabilities from Equity (“ASC 480Topic 480”), and FASB ASC 815-15.Topic 815, Derivatives and Hedging (“ASC Topic 815”). The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.

The 6,737,242 Detachable Redeemable Warrants


Upon the consummation of the Business Combination, Cyxtera assumed certain warrants issued by SVAC. Such warrants consisted of public warrants issued in connectionSVAC’s initial public offering (“IPO”) (the “Public Warrants”) and warrants issued by SVAC to the SVAC Sponsor, LLC (the “Sponsor”) and certain clients of Starboard Value LP (the “Forward Purchasers”) in private placement transactions (the “Private Placement Warrants” and, together with the Initial Public OfferingWarrants, the “Public and the 6,723,127Private Placement Warrants”). The Public and Private Placement Warrants arewere reallocated upon the consummation of the Business Combination and recognized as derivative liabilities in accordance with ASC 815-40. The Company will also be distributing warrants (which will be in the form of Distributable Redeemable Warrants and, to the extent any public stockholders redeem Class A common stock in connection with the initial business combination, Distributable Redeemable Warrants and Private Placement Warrants) to purchase 6,737,242 shares of the Company’s Class A common stock in connection with the closing of the initial business combination. All of the outstanding warrants and distributable warrants are recognized as derivative liabilities in accordance with ASC 815-40.Topic 815. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjustadjusts the carrying value of the instruments to fair value at each reporting period.period until they are exercised. The liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. The fair value of warrants issued in connection with the Initial Public Offering and Private Placement and the Distributable Redeemable Warrants were initially measuredrecorded at fair value using a modified Black-Scholes option pricing model.

The Company entered into a forward purchase agreement with forward purchasers (as defined below) pursuant to whichon the forward purchasers will purchase forward purchase shares at a price equal to $9.50 per share, in a private placement that will close simultaneously with the closingdate of the Initial Business Combination. At the closing, the forward purchasers will purchase the number of forward purchase shares from


In December 2021, the Company announced that it would result in net proceeds in an aggregate amount necessary to satisfy the exercise of redemption rights by holders of our public shares in connection with the Initial Business Combination (the “Redemption Obligation”), subject to a maximum funding commitment by the forward purchasers of $100,000,000. The forward purchase agreement is recognized as a derivative liability in accordance with ASC 815-40. Accordingly, the Company recognizes the instrument as a liability at fair value and adjust the instrument to fair value at each reporting period.

Net Loss Per Common Share

Net loss per share of common stock is computed by dividing net loss applicable to stockholders by the weighted average number of shares of common stock outstanding during the periods. The Company has not considered the effect of the warrants sold in the Initialredeem all Public OfferingWarrants and Private Placement to purchase an aggregate of 20,197,611 shares of Class A common stock inWarrants that remained outstanding at 5:00 p.m., New York City time, on January 19, 2022. In January 2022, the calculation of diluted earnings per share, since their inclusion would be anti-dilutive underremaining Public Warrants and Private Placement Warrants were either exercised by the treasury stock method.holders, or were redeemed by the Company. As a result, diluted earnings per share is the same as basic earnings per share forCompany derecognized the periods presented.


The Company’s statement$64.7 million of operations includesthe warrant liabilities and recognized a presentationgain of income per share for common stock subject to redemption in a manner similar to the two-class method of income per share. Net income per share, basic and diluted for Class A common stock is calculated by dividing the net gain from investments held in the Trust Account of approximately $169,000, net of applicable franchise$11.8 million (see Note 13).


o)Income taxes of approximately $169,000 for the year ended December 31, 2020, by the weighted average number of shares of Class A common stock outstanding for the period. Net loss per share, basic and diluted for Class B common stock for the year ended December 31, 2020 is calculated by dividing net loss of approximately $27.1 million, by the weighted average number of Class B common stock outstanding for the period.

Income Taxes


The Company complies withfiles a consolidated US federal, state, local and foreign income tax returns where applicable.

Income taxes are accounted for under the accounting and reporting requirements of FASB ASC, 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferredmethod. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the yearsyear in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in the tax rates is recognized in income in the period that includedincludes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must beamounts that are more-likely-than-not to be sustained upon examination byrealized in the future. A tax benefit from an uncertain income tax position may be recognized in the financial statements only if it is more-likely-than-not that the position is sustainable, based solely on its technical merits and consideration of the relevant taxing authorities. authority’s widely understood administrative practices and precedents.


p)Equity-based compensation

SIS Profit Interest Units

SIS has issued equity awards in the form of profit interest units (“PIUs”) to certain employees of Cyxtera and its affiliates. Compensation expense related to PIU awards is based on the fair value of the underlying units on the grant date. Fair value of PIUs is estimated using a Black-Scholes option pricing model (“OPM”), which requires assumptions as to expected volatility, dividends, term and risk-free rates. These PIUs vest based on a service condition. For additional information regarding equity-based compensation, see Note 15—Stock-based compensation.

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Stock-based compensation

The Company recognizes accrued interestmaintains the 2021 Omnibus Incentive Plan (the “2021 Plan”), an equity incentive plan under which the Company may grant equity incentive awards, including non-qualified stock options, restrictive stock units (“RSUs”) and penalties relatedperformance stock units (“PSUs”), to unrecognized tax benefits as income tax expense.

Recent Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have an effectemployees, officers, directors and consultants. The Company records stock-based compensation expense based on the Company’s financial statements.


Note 4—Initial Public Offering

On September 14, 2020,fair value of stock awards at the Company consummated its Initial Public Offeringgrant date and recognizes the expense over the vesting period on a straight-line basis. The fair value of 36,000,000 Units at $10.00 per Unit, generating gross proceedseach stock option granted is estimated on the grant date using the Black-Scholes-Merton option valuation model. The assumptions used to calculate the fair value of $360.0 million,options granted are evaluated and incurring offering costs of approximately $23.0 million, inclusive of $16.2 million in deferred underwriting commissions. The underwriters were granted a 45-day option fromrevised, as necessary, to reflect market conditions and our historical experience. Our assumption used to calculate the datevolatility of the final prospectus relating tostock options is based on public peer companies. The fair value of each restricted stock unit is estimated on the Initial Public Offering to purchase up to 5,400,000 additional Units to cover over-allotments, if any, at $10.00 per Unit, less underwriting discounts and commissions. On September 18, 2020,grant date using the underwriters partially exercised the over-allotment option and on September 23, 2020, purchased an additional 4,423,453 Units, generating gross proceeds of approximately $44.2 million, and incurring additional offering costs of approximately $2.7 million (net of approximately $221,000 in reimbursement for certain expenses from the underwriters), including approximately $2.0 million in deferred underwriting fees.

Each Unit consists of one shareclosing stock price of Class A common stock and one-sixth of one redeemable warrant (or 6,737,242 redeemable warrants inthat is being traded on the aggregate, assuming no exerciseNasdaq Stock Market, LLC (“Nasdaq”). Forfeitures are recorded as they occur. Compensation expense is recognized over the requisite service period for each separately vesting portion of the underwriters’ over-allotment option) (each, a “Detachable Redeemable Warrant”award, and only for those awards expected to vest.


The Company has an employee stock purchase plan (“ESPP”) and a contingent right to receive at least one-sixthunder which shares of one redeemable warrant following the Initial Business Combination Redemption Time (as defined below) under certain circumstances and subject to adjustments (the “Distributable Redeemable Warrants”). Each Public Warrant (as defined below) entitles the holderCompany’s stock are available for purchase by eligible participants. The plan allows participants to purchase one share ofthe Company’s Class A common stock at a85% of its fair market value at the lower of (i) the date of commencement of the offering period or (ii) the last day of the exercise period, as defined in the plan documents. The fair value of purchases under the Company’s employee stock purchase plans is estimated using the Black-Scholes option-pricing valuation model. The determination of fair value of stock-based awards using an option-pricing model is affected by the Company’s stock price as well as assumptions pertaining to several variables, including expected stock price volatility, the expected term of $11.50 per share, subjectthe award and the risk-free rate of interest. In the option-pricing model for the Company’s employee stock purchase plans, expected stock price volatility is based on historical volatility of the Company’s common stock.

p)    Other comprehensive (loss) income

Other comprehensive (loss) income refers to revenues, expenses, gains and losses that are included in comprehensive (loss) income but are excluded from net loss as these amounts are recorded directly as an adjustment (see Note 7).

to shareholders’ equity. The Company’s Certificateother comprehensive (loss) income is composed of Incorporationunrealized gains and losses on foreign currency translation adjustments.


q)    Advertising expenses

Costs related to advertising are expensed as incurred and included in selling, general and administrative expenses in the consolidated statements of operations. Advertising expenses of $4.1 million, $3.2 million and $2.4 million were recorded during the years ended December 31, 2022, 2021 and 2020, respectively.

r)     Recent accounting pronouncements

The Company is as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended (“JOBS Act”). The JOBS Act provides that atan emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards, such that an emerging growth company can delay the distribution time (as defined below),adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company has elected to avail itself of the extended transition periods and, as a result, the Company will effectnot be required to adopt new or revised accounting standards on the adoption dates required for other public companies so long as the Company remains an emerging growth company.

In December 2019, the FASB issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The expedients and exceptions
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provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, for which an entity has elected certain optional expedients and that are retained through the end of the hedging relationship. The amendments are effective for all entities as of March 12, 2020 through December 31, 2022. Subsequently, in December 2022, the FASB issued ASU No. 2022-06, Deferral of the Sunset Date of Reference Rate Reform (Topic 848). Topic 848 provides optional expedients and exceptions for applying GAAP to transactions affected by reference rate (e.g., LIBOR) reform if certain criteria are met, for a distributionlimited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The ASU deferred the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. The ASU is effective as of December 21, 2022 through December 31, 2024. The Company is evaluating the impact that the adoption of these standards will have on its consolidated financial statements.

In December 2019, the Financial Accounting Standards Board issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. We adopted the amendments in Topic 740 as of January 1, 2022, without a material impact on our consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326)—Measurement of Credit Losses on Financial Instruments, which requires companies to measure and recognize lifetime expected credit losses for certain financial instruments, including trade accounts receivable. Expected credit losses are estimated using relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. This amendment is effective commencing in 2023 with early adoption permitted, and the Company expects to adopt the new standard on the effective date or the date it no longer qualifies as an emerging growth company, whichever is earlier. Entities are permitted to use a modified retrospective approach. The Company is evaluating the impact that the adoption of this standard will have on its consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, Debt: Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40)—Accounting for Convertible Instruments and Contracts in an Entity's Own Equity. The guidance simplifies accounting for convertible instruments by removing major separation models required under current US GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for annual and interim periods beginning after December 15, 2021. The Company adopted this new guidance on January 1, 2022 without a material impact on its consolidated financial statements.

In February 2016, FASB issued Topic 842, which replaced the guidance in former ASC Topic 840, Leases. The new lease guidance increases transparency and comparability among organizations by requiring the recognition of the following for all leases (with the exception of short-term leases) at the commencement date: (1) a lease liability, which is a lessee’s future obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) an operating lease ROU asset, which is an asset that represents the lessee’s right to use, or control the use of, a numberspecified asset for the lease term. The accounting for the Company’s finance leases remains substantially unchanged. Topic 842 allows entities to adopt using one of warrants equaltwo methods: the modified retrospective transition method or the alternative transition method.

During the year ended December 31, 2022, the Company adopted Topic 842, with an effective date of January 1, 2022, using the alternative transition method. Therefore, results for reporting periods beginning after January 1, 2022 are presented under Topic 842, while comparative information has not been restated and continues to be reported under accounting standards in effect for those periods. The Company recognized the cumulative effects of initially applying the standard as an adjustment to the number of Units issuedoperating lease right-of-use assets, intangible assets, operating lease liabilities and other liabilities in the Initial Public Offering multiplied by one-sixth (the “Aggregate Warrant Amount”)period of adoption.
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CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In adopting the new guidance, the Company elected to apply the package of practical expedients permitted under the transition guidance, which allows the Company not to reassess (1) whether any expired or existing contracts contain leases under the new definition of a lease; (2) lease classification for any expired or existing leases; and (3) whether previously capitalized initial direct costs would qualify for capitalization under Topic 842.

Adoption of the standard had a significant impact on the Company’s consolidated balance sheets, including the (1) recognition of new ROU assets and liabilities on its balance sheet for all operating leases; and (2) reclassification of previously recognized lease abandonment liabilities, deferred rent, and favorable and unfavorable lease interests, as follows: (i)a reduction of or addition to the extent thatROU assets recognized at adoption. The adoption of the standard did not have a significant impact on the consolidated statements of operations and statements of cash flow. The cumulative effect of the changes made to our consolidated balance sheet as of January 1, 2022 due to the adoption of Topic 842 was as follows (in millions):

Balance SheetBalances at December 31, 2021Adjustments due to adoption of Topic 842Balances at January 1, 2022
Assets
Operating lease right-of-use assets$— $290.6 $290.6 
Intangible assets, net519.8(32.7)487.1
Liabilities
Current portion of operating lease liabilities— 32.2 32.2
Operating lease liabilities, less current portion— 319.0 319.0
Other liabilities158.2 (93.3)64.9

See Note 11—Leases for additional information.

Note 3.    Business combination

July 29, 2021, Acquisition of Legacy Cyxtera

On July 29, 2021, Legacy Cyxtera consummated the Business Combination with SVAC, with Legacy Cyxtera deemed the accounting acquirer. The Business Combination was accounted for as a reverse recapitalization with no Public Stockholders redeem their Public Sharesgoodwill or other intangible assets recorded, in accordance with US GAAP. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Legacy Cyxtera issuing stock for net assets of SVAC, accompanied by a recapitalization. As stated in Note 1, in connection with the Initialclosing of the Business Combination, each Public Stockholder will receive one-sixthSVAC was renamed Cyxtera Technologies, Inc.

Of the 40,423,453 shares of one Distributable Redeemable Warrant per Public Share and (ii) to the extent that any Public Stockholders redeem any of their Public Shares in connection with the Initial Business Combination, then (A) one-sixth of one Distributable Redeemable Warrant will be distributed per each Public Share that was not redeemed (the “Remaining Public Shares”) and (B) the warrants in an amount equal to the Aggregate Warrant Amount less the number of warrants distributed pursuant to the foregoing clause (A) will be distributed on a pro rata basis to (x) the holders of the Remaining Public Shares based on their percentage ofSVAC’s Class A common stock held after redemptions and the issuance of any forward purchase shares, as Distributable Redeemable Warrants and (y) theissued in its IPO (“Public Shares”) in September 2020, holders of the forward purchase26,176,891 shares based on their percentage of SVAC’s Class A common stock held after redemptions and the issuance of any forward purchase shares, as private placement warrants. Public Stockholders who exerciseproperly exercised their redemption rights are not entitled to receive any distribution of Distributable Redeemable Warrants in respect of such redeemed Public Shares. The right of any Public Stockholder to receive any additional Distributable Redeemable Warrants with respect to each Public Share they hold is contingent upon such share not being redeemed in connection with the Initial Business Combination. The number of Distributable Redeemable Warrants to be distributed in respect of each share of unredeemed Class A common stock is contingent upon the aggregate number of Public Shares that are redeemed in connection with the Initial Business Combination. The right to receive Distributable Redeemable Warrants will remain attachedhave such shares redeemed for a full pro rata portion of the trust account holding the proceeds from the IPO, calculated as of two business days prior to the Class A common stock and will not be separately transferable, assignable or salable. The Distributable Redeemable Warrants will be distributed atconsummation of the “distribution time,” which will be immediately after the Initial Business Combination, Redemption Time and immediately beforewhich was approximately $10.00 per share or $261.8 million in the closing of the Initial Business Combination. The Distributable Redeemable Warrants, together with the Detachable Redeemable Warrants, are collectively referred to herein as the “Public Warrants”. The “Initial Business Combination Redemption Time” means the time at which the Company redeems theaggregate. As a result, 14,246,562 shares of Class A common stock thatremained outstanding, leaving $142.5 million in the holders thereof have electedtrust account.

As a result of the Business Combination, 106,100,000 shares of Class A common stock were issued to redeem inSIS, the sole stockholder of Legacy Cyxtera prior to the Business Combination, and 25,000,000 shares of Class A common stock were issued to certain qualified institutional buyers and accredited investors, at a price of $10.00 per share, for aggregate consideration of $250.0 million, for the purpose of raising additional capital for use by the combined company following the closing of the Business Combination and satisfying one of the conditions to the closing (the “PIPE Investment”). Additionally, as a result of the Business Combination, 10,526,315 shares of Class A common stock were issued to the Forward Purchasers for $100 million and 10,105,863 shares of SVAC Class B common stock held by the Sponsor, automatically converted to 10,105,863 shares of Class A common stock.

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CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In connection with the Initial Business Combination,IPO, the Forward Purchasers and SVAC entered into an Optional Share Purchase Agreement, dated September 9, 2020 (the “Optional Share Purchase Agreement”), pursuant to which will occurthe Forward Purchasers were granted the option, exercisable anytime or from time to time during the six-month period following the day that is the first business day following the closing of the Company’s initial business combination, to purchase common equity of the surviving entity in the initial business combination (the “Optional Shares”) at a price per Optional Share of $10.00, subject to adjustments. In connection with the Merger Agreement, Legacy Cyxtera and the Forward Purchasers entered into a letter agreement pursuant to which the Forward Purchasers agreed not to purchase Optional Shares for an aggregate amount exceeding $75.0 million. On July 29, 2021, immediately prior to the consummation of the Initial Business Combination.

Note 5—Related Party Transactions,

Founder Shares

On November 27, 2019, Legacy Cyxtera entered into a second letter agreement (the “Optional Purchase Letter Agreement”) with the Sponsor purchased 8,625,000 sharesForward Purchasers pursuant to which the parties agreed to amend the Optional Share Purchase Agreement to limit the number of Optional Shares available for purchase by the Forward Purchasers in the six-month period following the Transactions from $75.0 million to $37.5 million. Additionally, pursuant to an assignment agreement entered into concurrently with the Optional Purchase Letter Agreement (the “Assignment Agreement”), the Forward Purchasers agreed to assign an option to purchase $37.5 million of Optional Shares under the Optional Share Purchase Agreement to SIS. As a result of the Company’s Class B common stock, par value $0.0001 per share (the “Founder Shares”), for an aggregate price of $25,000. In June 2020,Optional Purchase Letter Agreement and the Sponsor transferred (i) 431,250 Founder Shares to Martin D. McNulty, Jr., the Company’s Chief Executive Officer and a member of the board of directors and (ii) 25,000 Founder Shares toAssignment Agreement, each of Pauline J. Brown, Michelle Felman and Lowell Robinson. In July 2020, the Sponsor transferred 25,000 Founder Shares to Robert L. Greene. On September 9, 2020, the Company effected a 1.2:1 share capitalization, resulting in an aggregate of 10,350,000 shares of Class B common stock outstanding. All shares and associated amounts have been retroactively restated to reflect the share capitalization.


The SponsorSIS and the Company’s Chief Executive Officer agreedForward Purchasers had the ability to forfeit up to 1,350,000 Founder Shares to the extent that the over-allotment option was not exercised in full by the underwriters, so that the Founder Shares would represent 20.0% of the Company’s issued and outstanding shares after the Initial Public Offering. On September 23, 2020, upon the underwriters’ partial exercise of the over-allotment, an aggregate of 244,137 Founder Shares were forfeited by the Sponsor and the Company’s Chief Executive Officer.

The Sponsor and the Company’s officers and directors agreed, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until (A) one year after the date of the consummation of the Initial Business Combination or (B) subsequent to the Initial Business Combination, (x) if the closing price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Initial Business Combination, or (y) the date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction that results in all of the Public Stockholders having the right to exchange their shares of common stock for cash, securities or other property.

Private Placement Warrants

Simultaneously with the closing of the Initial Public Offering, the Company consummated the Private Placement of 6,133,333 Private Placement Warrants to the Sponsor,purchase, at a price of $1.50$10.00 per Private Placement Warrant, generating gross proceedsshare, up to the Company of $9.2 million. In connection with the underwriters’ partial exercise of their over-allotment option, the Sponsor purchased an additional 589,794 Private Placement Warrants, at a price of $1.50 per Private Placement Warrant, generating gross proceeds to the Company of approximately $0.9 million.

Each whole Private Placement Warrant is exercisable for one whole share3.75 million shares of Class A common stock (for a combined maximum amount of $75.0 million or 7.5 million shares) during the six-month period following the day that is the first business day following the closing date of the Transactions. The exercise price of $10.00 per share was subject to adjustment in proportion to any stock dividends, stock splits, reverse stock splits or similar transactions. On January 31, 2022, SIS and the Forward Purchasers exercised the option, and Cyxtera issued 7.5 million shares of Class A common stock to SIS and the Forward Purchasers at a price of $10.00 per share, for aggregate consideration of $75.0 million. Since SIS and the Forward Purchasers exercised the option, the Company was obligated to issue shares of Class A common stock in exchange for cash (and the option settled on a gross basis). The accounting guidance in ASC Subtopic 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity (“ASC Subtopic 815-40”), states that contracts should be classified as equity instruments (and not as an asset or liability) if they are both (1) indexed to the issuer’s own stock and (2) classified in stockholders’ equity in the issuer’s statement of financial position. The optional share purchase options were indexed to the Company’s Class A common stock because the options were considered a fixed-for-fixed option on equity shares, pursuant to which the option holder would receive a fixed number of Class A common stock for a fixed conversion price of $10.00 per share. The Optional Share Purchase Agreement contained no contingent exercise or settlement provisions that would preclude equity classification.


After giving effect to the Transactions, the redemption of the Public Shares as described above, the issuance of shares as part of the forward purchase and the consummation of the PIPE Investment, there were 165,978,740 shares of Class A common stock issued and outstanding, immediately following the completion of the Business Combination. The Class A common stock and Public Warrants (as defined in Note 4) commenced trading on the Nasdaq on July 30, 2021. As noted above, an aggregate of $261.8 million was paid from SVAC’s trust account to holders that properly exercised their right to have Public Shares redeemed, and the remaining balance immediately prior to the closing remained in the trust account. After taking into account the funds of $142.5 million in the trust account and $1.4 million from SVAC’s cash operating accounts after redemptions, the $250.0 million in gross proceeds from the PIPE Investment and the $100.0 million in gross proceeds from the forward purchase, the Company received approximately $493.9 million in total cash from the Business Combination, before direct and incremental transaction costs of approximately $59.4 million and debt repayment of $433.0 million, plus accrued interest. The $433.0 million debt repayment includes the full repayment of Legacy Cyxtera’s 2017 Second Lien Term Facility (as defined in Note 12) of $310.0 million and pay down of Legacy Cyxtera’s Revolving Facility and 2021 Revolving Facility (each as defined in Note 12) of $123.0 million, plus accrued interest.

In December 2021, the Company announced that it would redeem all of the Public Warrants and Private Placement Warrants (as defined in Note 4) that remained outstanding as of 5:00 p.m., New York City time, on January 19, 2022. On January 26, 2022, the Company announced that it had completed the redemption of all of its outstanding warrants that were issued under the warrant agreement and that remained outstanding at 5:00 p.m., New York City time, on January 19, 2022. Upon completion of the redemption, the Public Warrants ceased trading on the Nasdaq and were deregistered.
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CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Prior to the Business Combination, Legacy Cyxtera and SVAC filed separate standalone federal, state and local income tax returns. As a result of the Business Combination, which qualified as a reverse recapitalization, SVAC (now known as Cyxtera Technologies, Inc.) became the parent of the consolidated filing group, with Legacy Cyxtera (now known as Cyxtera Technologies, LLC) as a subsidiary.

The following table reconciles the elements of the Business Combination to the consolidated statements of cash flows and the consolidated statements of changes in shareholders’ equity for the year ended December 31, 2021:

Recapitalization
( in millions)
SVAC’s trust and cash, net of redemption$143.9 
Cash-PIPE Investment250.0 
Cash-Forward Purchase100.0
Less: transaction cost and advisory fees, net of tax benefit(59.4)
Net proceeds from reverse recapitalization434.5
Plus: non-cash net liabilities assumed(1)
(41.8)
Less: accrued transaction costs and advisory fees(0.4)
Net contributions from reverse recapitalization$392.3 

(1)Represents $41.8 million of non-cash Public Warrants and Private Placement Warrants liabilities assumed.


Note 4.    Loss per common share

Basic loss per share is computed by dividing net loss (the numerator) by the weighted-average number of shares of Class A common stock outstanding (the denominator) for the period. Diluted loss per share assumes that any dilutive equity instruments were exercised with outstanding Class A common stock adjusted accordingly when the conversion of such instruments would be dilutive.

The Company’s potential dilutive shares, which include previously outstanding public warrants (“Public Warrants”) and private placement warrants (“Private Placement Warrants”), unvested employee stock options, unvested restricted stock units (“RSUs”), unvested performance stock units (“PSUs”), unissued employee stock purchase plan shares (“ESPP shares”) and options that were issued to the Forward Purchasers and SIS pursuant to the Optional Share Purchase Agreement and subsequently exercised in 2022, have been excluded from diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted-average number of common shares outstanding used to calculate both basic and diluted net loss per share is the same. The Company excluded the following potential common shares, presented based on amounts outstanding as of December 31, 2022 and 2021, from the computation of diluted net loss per share because including them would have an anti-dilutive effect:

Year Ended December 31,
20222021
Public and Private Warrants (2)
— 19,356,867 
Unvested employee stock options830,547 849,233 
Unvested restrictive stock units3,938,963 3,347,511 
Optional shares (1)
— 7,500,000 
Unvested performance stock units349,766 — 
Unissued employee stock purchase plan shares159,626 — 
Total shares5,278,902 31,053,611 

(1) Optional shares were excluded from the computation of diluted loss per share for the periods these instruments represented potential dilutive common stock equivalents during the year ended December 31, 2022.

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CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(2) In addition, 19.4 million of Public Warrants and Private Placement Warrants were excluded from the computation of net loss per share for the period January 1, 2022 through January 24, 2022 because they would have had an anti-dilutive effect on the computation of diluted net loss.

For the year ended December 31, 2020, the Company did not have any potential dilutive shares.

Note 5.     Restructuring, impairment, site closures and related costs

Addison site

In January 2021, the Company notified the landlord of the Addison office space in Texas of its intent to sublease the property for the remaining 10 years. The Company ceased use of and subleased the space during the three months ended March 31, 2021. In connection with this decision, the Company incurred $7.9 million of expenses, including $5.9 million of accrued lease termination costs and $2.0 million of asset disposals.

Moses Lake site

In February 2021, the Company notified the landlord of the Moses Lake data center facility in the State of Washington of its intent to cease the use of the space. Accordingly, the Company accelerated depreciation and amortization of all assets on the site, including favorable leasehold interest amortization, which resulted in $1.8 million additional depreciation and amortization during the year ended December 31, 2021, and $0.6 million additional favorable leasehold interest amortization, recorded in cost of revenues, during the year ended December 31, 2021, respectively. The Company ceased use of the property in June 2021 at which time it met the conditions for recording a charge related to the remaining lease obligation of $58.5 million. There is no sublease in place on this property. Furthermore, management believes the ability to sublease the property is remote and as such has not made any assumption for the future cash flows from a potential sublease in making this estimate.

On January 1, 2022, the Company adopted Topic 842, and reclassified $53.0 million of the restructuring liability reserve representing lease abandonment liabilities to the ROU asset. As of December 31, 2022, the restructuring liability reserve relates to the ASC 420, Exit or Disposal Cost Obligations, lease abandonment liability for Moses Lake, which was in excess of the ROU asset adjustment. The restructuring liability reserve is included in other liabilities in the consolidated balance sheets.

The activity in the restructuring liability reserve for the years ended December 31, 2022 and 2021, was as follows (in millions):
20222021
Beginning balance$62.3 $— 
Lease termination costs— 64.4 
Reclassification of deferred rent credits— 3.4 
Reclassification of the restructuring liability to ROU Asset(53.0)— 
Accretion0.6 3.5 
Payments(1.2)(9.0)
      Ending balance$8.7 $62.3 

During the years ended December 31, 2022 and 2021, the Company recorded accretion of $0.6 million, and $3.5 million, respectively, in connection with the exits, recorded in restructuring, impairment, site closures and related costs in the consolidated statements of operations. There was no accretion expense in 2020 in connection with restructuring liability reserve.

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CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 6.    Revenue

Disaggregation of revenue

The Company disaggregates revenue from contracts with customers into recurring revenues and non-recurring revenues. Cyxtera derives the majority of its revenues from recurring revenue streams, consisting primarily of colocation service fees. These fees are generally billed monthly and recognized ratably over the term of the contract. The Company’s non-recurring revenues are primarily composed of installation services related to a customer’s initial deployment and professional services the Company performs. These services are considered to be non-recurring because they are billed typically once, upon completion of the installation or the professional services work performed. The majority of these non-recurring revenues are typically billed on the first invoice distributed to the customer in connection with their initial installation. However, revenues from installation services are deferred and recognized ratably over the period of the contract term in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”) as discussed in Note 2.

202220212020
Recurring revenue$710.6 $671.5 $657.4 
Non-recurring revenues35.4 32.2 33.1 
Total$746.0 $703.7 $690.5 

Contract balances

The following table summarizes the opening and closing balances of the Company’s receivables; contract asset, current; contract asset, non-current; deferred revenue, current; and deferred revenue, non-current (in millions):

ReceivablesContract asset, currentContract asset, non-currentDeferred revenue, currentDeferred revenue, non-current
Closing balances as of December 31, 2019$65.2 $32.5 $23.8 $14.6 $9.6 
Net (decrease) increase during the year ended December 31, 2020(31.7)(8.7)(7.0)1.0 8.5 
Closing balances as of December 31, 202033.5 23.8 16.8 15.6 18.1 
Net (decrease) increase during the year ended December 31, 2021(15.2)(6.6)(4.7)(1.1)(3.4)
Closing balances as of December 31, 202118.3 17.2 12.1 14.5 14.7 
Net (decrease) increase during the year ended December 31, 202210.0 (1.5)1.7 7.9 1.0 
Closing balances as of December 31, 2022$28.3 $15.7 $13.8 $22.4 $15.7 
The difference between the opening and closing balances of the Company’s contract assets and deferred revenues primarily results from the timing difference between the Company’s performance obligation and the customer’s payment. The amounts of revenue recognized during the years ended December 31, 2022, 2021, and 2020, from the opening deferred revenue balance was $14.3 million, $15.6 million, and $8.2 million, respectively. During the years ended December 31, 2022, 2021 and 2020, no impairment loss related to contract balances was recognized in the consolidated statements of operations.

In addition to the contract liability amounts shown above, deferred revenue on the consolidated balance sheets includes $50.7 million, $46.1 million, and $44.6 million of advanced billings as of December 31, 2022, 2021 and 2020, respectively.

Contract costs

The ending balance of net capitalized contract costs as of December 31, 2022, 2021 and 2020 was $29.5 million, $29.3 million, and $40.6 million, respectively, $15.7 million, $17.2 million and $23.8 million of which were included in prepaid and other current assets in the consolidated balance sheets as of December 31, 2022, 2021 and 2020, respectively, and $13.8 million, $12.1 million, and $16.8 million of which were included in other assets in the consolidated balance sheets as of December 31, 2022, 2021 and 2020, respectively. For the years ended
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CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

December 31, 2022, 2021 and 2020, $19.5 million, $26.5 million, and $35.1 million, respectively, of contract costs was amortized, $6.6 million, $15.2 million, and $24.1 million of which were included in cost of revenues, excluding depreciation and amortization in the consolidated statements of operations for the years ended December 31, 2022, 2021 and 2020, respectively, and $12.9 million, $11.3 million, and $11.0 million, of which were included in selling, general and administrative expenses in the consolidated statements of operations for the years ended December 31, 2022, 2021 and 2020.

Remaining performance obligations

Under colocation contracts, Cyxtera’s performance obligations are to provide customers with space and power through fixed duration agreements, which are typically three years. Under these arrangements, the Company bills customers on a monthly basis. Under interconnection agreements, Cyxtera’s performance obligations are to provide customers the ability to establish connections to their network service providers and business partners. Interconnection services are typically offered on month-to-month contract terms and generate recurring revenue.

Cyxtera’s remaining performance obligations under its colocation agreements represent contracted revenue that has not yet been recognized, which includes deferred revenue and amounts that will be invoiced and recognized in future periods. The remaining performance obligations do not include estimates of variable consideration related to unsatisfied performance obligations, such as the usage of metered power, or any contracts that could be terminated without significant penalties, such as the majority of interconnection revenues. The aggregate amount allocated to performance obligations that were unsatisfied or partially unsatisfied as of December 31, 2022, was $942.3 million, of which 43%, 27% and 31% is expected to be recognized over the next year, the next one to two years, and thereafter, respectively. The aggregate amount allocated to performance obligations that were unsatisfied or partially unsatisfied as of December 31, 2021 was $818.0 million, of which 45%, 27% and 28% is expected to be recognized over the next year, the next one to two years, and thereafter, respectively.

While initial contract terms vary in length, substantially all contracts automatically renew in one-year increments. Included in the performance obligations is either (1) remaining performance obligations under the initial contract terms or (2) remaining performance obligations related to contracts in the renewal period once the initial terms have lapsed.

Note 7.     Balance sheet components

Allowance for doubtful accounts

The activity in the allowance for doubtful accounts during the year ended December 31, 2022 and 2021 was as follows (in millions):

20222021
Beginning balance$0.3 $1.4 
Current period provisions0.1 0.1 
Recoveries and reversal of allowance(0.3)(1.2)
Ending balance$0.1 $0.3 


During the year ended December 31, 2022, the Company recorded recoveries and decreased our allowance by $0.3 million. During the year ended December 31, 2021, the Company recorded recoveries and decreased our allowance by $1.2 million. The allowance for doubtful accounts was impacted to a lesser extent from foreign currency translation during the same period.

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CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Factored receivables

On February 9, 2021, a subsidiary of Cyxtera entered into a Master Receivables Purchase Agreement (the “Factoring Agreement”) with Nomura Corporate Funding America, LLC (the “Factor”) to factor up to $37.5 million in open trade receivables at any point during the term of the commitment, which could be extended for a period of 540 days provided that the Factor had the right to impose additional conditions to its obligations to complete any purchase after 360 days. The Factor did not impose any such additional conditions. Pursuant to the terms of the arrangement, a subsidiary of the Company would, from time to time, sell to the Factor certain of its accounts receivable balances on a non-recourse basis for credit approved accounts. The agreement allowed for up to 85% of the face amount of an invoice to be factored. The unused balance fee under the arrangement was 2%. During the year ended December 31, 2022, the Company’s subsidiary factored $10.9 million receivables and received $10.7 million, net of fees of $0.2 million. During the year ended December 31, 2021, the Company’s subsidiary factored $101.2 million receivables and received $99.5 million, net of fees of $1.7 million. Cash collected under this arrangement is reflected within the change in accounts receivables in the consolidated statement of cash flows. On August 31, 2022, the Company terminated the Factoring Agreement.

Accounts Receivable Sales Program

On August 31, 2022, the Company entered into an Accounts Receivable Sales Program with PNC Bank, National Association and the other parties thereto (the “A/R Program”) for an investment limit of $37.5 million, which terminates on August 31, 2025 unless extended. Under the A/R Program, certain of the Company’s wholly owned subsidiaries continuously sell (or contribute) receivables to a wholly owned special purpose entity at fair market value. The Company then designates certain of the receivables to be sold by the special purpose entity to an unaffiliated financial institution (the “Purchaser”) and the special purpose entity grants a security interest in the remaining receivables to the Purchaser such that the Purchaser has recourse to all receivables transferred to the special purpose entity to recover its investment. Although the special purpose entity is a wholly owned subsidiary of the Company, it is a separate legal entity with its own separate creditors who will be entitled, upon its liquidation, to be satisfied out of its assets prior to any assets or value in such special purpose entity becoming available to its equity holders and its assets are not available to pay other creditors of the Company. As of December 31, 2022, the Company had $17.3 million drawn on the investment limit. The investments sold by the Company bears a discount based on a variable rate which is based on the Secured Overnight Financing Rate (“SOFR”) plus a margin.

All transactions under the A/R Program and the Factoring Agreement were accounted for as a true sale in accordance with ASC 860, Transfers and Servicing (“Topic 860”). Following the sale and transfer of the receivables to the Purchaser, the receivables are legally isolated from the Company and its subsidiaries, and the Company sells, conveys, transfers and assigns to the Purchaser all its rights, title and interest in the receivables. Receivables sold are derecognized from the statement of financial position. The Company continues to service, administer and collect the receivables on behalf of the Purchaser. The Company recognizes a liability for amounts collected on behalf of the Purchaser in accordance with Topic 860. As of December 31, 2022, the Company reported a liability of $20.2 million due to the Purchaser in other current liabilities in the consolidated balance sheets.

Prepaid and other current assets

Prepaid and other current assets consist of the following as of December 31, 2022 and 2021 (in millions):

20222021
Contract asset, current$15.7 $17.2 
Prepaid expenses22.2 19.3 
Other current assets0.2 1.0 
Total prepaid and other current assets$38.1 $37.5 

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CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 8.    Property, plant and equipment, net

Property, plant and equipment, net consist of the following as of December 31, 2022 and 2021 (in millions):

20222021
Land$10.6 $10.6 
Buildings1,168.3 1,030.4 
Leasehold improvements945.8 933.5 
Personal property253.3 222.9 
Construction in progress135.5 65.2 
2,513.5 2,262.6 
Less: accumulated depreciation and amortization(874.9)(731.8)
Property, plant and equipment, net$1,638.6 $1,530.8 

Assets under finance leases (formerly known as capital leases) and related accumulated amortization are $1,130.9 million and $235.2 million, respectively, as of December 31, 2022, and $943.8 million and $193.4 million, respectively, as of December 31, 2021.

Depreciation and amortization expense amounted to $182.7 million, $180.3 million, and $171.4 million, respectively, for the years ended December 31, 2022, 2021 and 2020.

Note 9.    Goodwill and Intangible assets

Goodwill was $599.6 million and $761.7 million as of December 31, 2022 and 2021, respectively. The changes in the carrying amount of goodwill during the years ended December 31, 2022 and 2021 are as follows (in millions):

Balance as of January 1, 2021$762.2 
Impact of foreign currency translation(0.5)
Balance as of December 31, 2021761.7 
Goodwill Impairment(153.6)
Impact of foreign currency translation(8.5)
Balance as of December 31, 2022$599.6 

In addition, the Company has indefinite-lived intangible assets, which consist of internet protocol addresses of $1.3 million and $0.5 million as of December 31, 2022 and 2021, respectively.

Summarized below are the carrying values for the major classes of amortizing intangible assets as of December 31, 2022 and 2021 (in millions):

20222021
GrossAccumulated AmortizationNetGrossAccumulated AmortizationNet
Customer relationships$768.0 $(341.7)$426.3 $768.0 $(281.4)$486.6 
Favorable leasehold interests— — — 57.6 (24.9)32.7 
Developed technology0.3 (0.3)— 0.3 (0.3)— 
Total intangibles$768.3 $(342.0)$426.3 $825.9 $(306.6)$519.3 

The main changes in the carrying amount of each major class of amortizing intangible assets during the years ended December 31, 2022 and 2021 was amortization and, to a lesser extent, the impact of foreign currency
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CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

translation. In addition, on January 1, 2022, the Company adopted Topic 842 and reclassified the favorable leasehold interests to ROU assets.

Amortization expense on intangible assets, excluding the impact of unfavorable leasehold interest amortization, amounted to $65.6 million and $66.2 million, respectively, for the years ended December 31, 2022 and 2021. Amortization expense for all intangible assets, except favorable leasehold interests, was recorded within depreciation and amortization expense in the consolidated statements of operations. As of December 31, 2021, the Company had $16.2 million of unfavorable leasehold interests included within other liabilities in the accompanying consolidated balance sheets. Favorable leasehold amortization of $5.9 million, and unfavorable leasehold amortization of $2.3 million was recorded within cost of revenues, excluding depreciation and amortization in the consolidated statements of operations for the years ended December 31, 2021.

The Company estimates annual amortization expense for existing intangible assets subject to amortization is as follows (in millions):

For the years ending:
2023$60.3 
202460.3 
202560.3 
202660.3 
202760.3 
Thereafter124.8 
Total amortization expense$426.3 

Impairment tests

The Company performs annual impairment tests of goodwill on October 1st of each year or whenever an indicator of impairment exists. The Company performed the annual impairment test on October 1, 2022, and concluded there was no impairment. During the quarter ended December 31, 2022, management identified various qualitative factors collectively, indicated the Company had triggering events, including the substantial decrease in stock price, for which the Company performed a quantitative assessment as of November 30, 2022. For purposes of the Company’s 2022 quantitative annual impairment test of goodwill, fair value measurements were determined using the market capitalization based on total value of the Company as determined on a public exchange plus a control premium. As a result of the quantitative assessment performed, the implied fair value of the Company was less than carrying value as of November 30, 2022, and, as a result a pre-tax, non-cash goodwill impairment charge of $153.6 million was recorded for the difference.

During the year ended December 31, 2021, the Company performed a qualitative assessment, which consists of an assessment of whether it is more-likely-than-not that a reporting unit’s fair value is less than its carrying amount. No impairment charges were recorded during the years ended December 31, 2021 and 2020. As of December 31, 2021, the Company concluded goodwill was not impaired as the fair value of the reporting unit exceeded its carrying value, including goodwill.

Note 10. Fair value measurements

The fair value of cash, accounts receivable, accounts payable, accrued expenses, deferred revenue and other current liabilities approximate their carrying value because of the short-term nature of these instruments. Refer to Note 13 for the fair value measurement disclosures related to the warrant liabilities.

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CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The carrying values and fair values of other financial instruments are as follows as of December 31, 2022 and 2021 (in millions):

20222021
Carrying valueFair valueCarrying valueFair value
2017 First Lien Term Facility$772.2 $780.0 $778.3 $780.0 
2019 First Lien Term Facility96.8 98.0 97.5 98.0 
Revolving Facility— — 2.7 2.7 
2021 Revolving Facility42.0 42.0 37.3 37.3 

The fair value of our First Lien Term Facility (as defined in Note 12) as of December 31, 2022 and 2021 was based on the quoted market price for this instrument in an inactive market, which represents a Level 2 fair value measurement. The carrying value of the Revolving Facility (as defined in Note 12) and the 2021 Revolving Facility (as defined in Note 12) approximates estimated fair value as of December 31, 2022 and 2021 due to the variability of interest rates. Debt issuance costs of $4.0 million and $7.5 million, respectively, as of December 31, 2022 and 2021 are not included in the carrying value of these instruments as shown above.

Note 11. Leases

The Company determines if an arrangement is or contains a lease at inception. The Company enters into lease arrangements primarily for data center spaces, office spaces and equipment. The Company recognizes an ROU asset and lease liability on the consolidated balance sheets for all leases with a term longer than 12 months. The leases have remaining lease terms of 1 year to 32 years. As of December 31, 2022, the Company recorded finance lease assets of $1,130.9 million, net of accumulated amortization of $235.2 million, within property and equipment, net.

Lease Expenses

The components of lease expenses and income are as follows (in millions):

Year Ended December 31, 2022
Finance lease cost
Amortization of ROU assets (1)
$57.8 
Interest on lease liabilities (2)
114.2 
Total finance lease cost172.0 
Operating lease cost (3)(6)
59.8
Variable lease cost (4)
14.4 
Sublease income (5)
(15.6)
Total lease cost$230.6 

(1) Amortization of assets under finance leases is included in depreciation and amortization expense in the Company’s consolidated statements of operations.
(2) Interest on lease liabilities is included in interest expense, net in the Company’s consolidated statements of operations.
(3) Operating lease costs for data centers is included in cost of revenue, excluding depreciation and amortization in the Company’s consolidated statements of operations. Operating lease costs for office leases is included in selling, general and administrative expenses in the Company’s consolidated statements of operations.
(4) Variable lease costs for operating leases is included in costs of revenue, excluding depreciation and amortization in the Company’s consolidated statements of operations.
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CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(5) The Company has subleases for certain data centers with a couple of our customers. The Company also has a sublease of the Addison office space described in Note 5. Sublease and lease income of $13.8 million in connection with our customers is included in revenues in the Company’s consolidated statements of operations. Sublease income of $1.8 million in connection with the Addison office lease is included in restructuring, impairment, site closures and related costs in the Company’s consolidated statements of operations.
(6) During the year ended December 31, 2022, the Company recognized $5.2 million of restructuring expenses recorded in restructuring, impairment, site closures and related costs in the consolidated statements of operations. The restructuring costs were composed of $5.8 million of operating lease cost, $0.6 million of variable lease cost, and $0.6 million of accretion expense, net of $1.8 million of income recognized from the Addison sublease.

Lease costs for short-term leases were inconsequential for the year ended December 31, 2022.

Other Information

Other information related to leases is as follows (in millions):

Year Ended December 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from finance leases$104.0 
Operating cash outflows from operating leases59.6 
Financing cash outflows from finance lease49.2 
Right-of-use assets obtained in exchange for lease liabilities:
Finance leases165.4
Operating leases272.5
As of December 31, 2022
Weighted-average remaining lease term (in years) - finance leases(1)
20.5
Weighted-average remaining lease term (in years) - operating leases(1)
9.8
Weighted-average discount rate - finance leases10.0 %
Weighted-average discount rate - operating lease8.9 %

(1) Includes renewal options that are reasonably certain to be exercised.

Maturities of Lease Liabilities

Maturities of lease liabilities under Topic 842 as of December 31, 2022 are as follows (in millions):

Operating Leases(1)
Finance LeasesTotal
2023$60.0 $154.8 $214.8 
202459.6 145.3 204.9 
202551.2 147.6 198.8 
202646.7 142.0 188.7 
202744.4 120.3 164.7 
Thereafter220.0 2,479.3 2,699.3 
Total lease payments$481.9 $3,189.3 $3,671.2 
Less: imputed interest$(174.6)$(2,067.5)$(2,242.1)
Total$307.3 $1,121.8 $1,429.1 

(1) Minimum lease payments have not been reduced by minimum sublease rentals of $147.4 million due in the future under non-cancelable subleases.

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CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Future minimum lease receipts under operating lease obligations under Topic 842 as of December 31, 2022 are as follows (in millions):

Lease receipts
2023$26.0 
202426.0
202526.1
202626.1
202719.3
Thereafter32.0
Total minimum lease receipts$155.5 

The future minimum lease receipts and payments under operating lease obligations under ASC Topic 840 as of December 31, 2021 are as follows (in millions):
For the years ending:Lease receipts
Lease commitments(1)
2022$12.2 $60.3 
202312.2 59.7 
202412.2 59.2 
202512.2 50.6 
202612.2 46.3 
Thereafter4.1 273.8 
Total minimum lease receipts/payments$65.1 $549.9 
(1) Minimum lease payments have not been reduced by minimum sublease rentals of $45.1 million due in the future under non-cancelable subleases.

Total rent expense, including the net impact from the amortization of ROU asset, was approximately $118.5 million for the year ended December 31, 2022 and is included within cost of revenues, excluding depreciation and amortization in the consolidated statements of operations.
The future minimum lease payments under capital lease arrangements and sale-leaseback financing obligations under ASC Topic 840 as of December 31, 2021 are as follows (in millions):

For the years ending:
2022$135.1 
2023128.3 
2024118.5 
2025120.6 
2026119.3 
Thereafter2,285.0 
Total minimum lease payments2,906.8 
Less: amount representing interest(1,930.5)
Present value of net minimum lease payments976.3 
Less: current portion(38.5)
Capital leases, net of current portion$937.8 


Interest expense recorded in connection with finance leases (formerly known as capital leases) and sale-leaseback financings totaled $114.2 million and $101.5 million, respectively, for the years ended December 31, 2022 and 2021 and is included within interest expense, net in the accompanying consolidated statements of operations.

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CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Sale-leaseback financings

The Company enters sale-leaseback financings, primarily relating to equipment. Amortization of assets under finance leases is included in depreciation and amortization expense in the Company’s consolidated statements of operations. Payments on sale-leaseback financings are included in repayments of sale-leaseback financings in the Company’s consolidated statements of cash flows.

During the years ended December 31, 2022 and 2021, the Company had additions to assets and liabilities recorded as sale-leaseback financings of $30.0 million and $5.0 million, respectively. During the years ended December 31, 2022 and 2021, there was no gain or loss recognized from the sale-leaseback financings.

Note 12. Long-term debt

Long-term debt consists of the following as of December 31, 2022 and 2021 (in millions):

20222021
2017 First Lien Term Facility due May 2024$772.2 $778.3 
2019 First Lien Term Facility due May 202496.8 97.5 
Revolving Facility due May 2022— 2.7 
2021 Revolving Facility due November 202342.0 37.3 
Less: unamortized debt issuance costs(4.0)(7.5)
907.0 908.3 
Less: current maturities of long-term debt(53.5)(11.8)
Long-term debt, net current portion$853.5 $896.5 

Senior Secured Credit Facilities

On May 1, 2017, a subsidiary of the Company (the “Borrower”) entered into credit agreements for up to $1,275.0 million of borrowings under first and second lien credit facilities (together with the 2019 First Lien Term Facility and the 2021 Revolving Facility described below, collectively, the “Senior Secured Credit Facilities”). The Senior Secured Credit Facilities consist of (a) a first lien credit agreement providing for (i) a $150.0 million first lien multi-currency revolving credit facility (the “Revolving Facility”) and (ii)(a) an $815.0 million first lien term loan borrowing (the “2017 First Lien Term Facility”) and (b) a second lien credit agreement providing for a $310.0 million second lien term loan credit borrowing (the “2017 Second Lien Term Facility”). On May 13, 2019, the Borrower borrowed an additional $100.0 million under the incremental first lien loan under the first lien credit agreement (the “2019 First Lien Term Facility”). On May 7, 2021, certain of the lenders under the Revolving Facility entered into an amendment with the Borrower pursuant to which they agreed to extend the maturity date for certain revolving commitments from May 1, 2022, to November 1, 2023. Under these terms of the amendment, $141.3 million of commitments under the existing Revolving Facility were exchanged for $120.1 million of commitments under a new revolving facility (the “2021 Revolving Facility”). The 2021 Revolving Facility has substantially the same terms as Revolving Facility, except that the maturity date of the 2021 Revolving Facility is November 1, 2023. In connection with the amendment, the Company repaid $19.6 million of the outstanding balance under the Revolving Facility on May 10, 2021. The amounts owed under the 2017 Second Lien Term Facility, the Revolving Facility and the 2021 Revolving Facility were repaid in July and August 2021 following the consummation of the Business Combination—see Note 3. The Company recognized a loss on extinguishment of debt of $5.2 million, which resulted from the write off of deferred financing costs attributed to the 2017 Second Lien Term Facility. The $5.2 million loss on extinguishment of debt is included within interest expense, net in the consolidated statements of operations for the year ended December 31, 2021. Subsequent to the consummation of the Business Combination and the pay-down of the Revolving Facility and the 2021 Revolving Facility, the Company drew down an additional $40.0 million from such revolving facilities during the year ended December 31, 2021. During the year ended December 31, 2022, the Company repaid $40.0 million of the outstanding balance under the revolving facilities. Subsequent to paying down the revolving facilities, the Company drew down $42.0 million from the 2021 Revolving Facility during the year ended December 31, 2022. As of December 31, 2022, a
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CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

total of $42.0 million was outstanding and approximately $73.1 million was available under the revolving facilities. As of December 31, 2021, a total of $40.0 million was outstanding and approximately $88.8 million was available under the revolving facilities.

The Senior Secured Credit Facilities, including the 2019 First Lien Term Facility, are secured by substantially all assets of Borrower and contain customary covenants, including reporting and financial covenants, some of which require the Borrower to maintain certain financial coverage and leverage ratios, as well as customary events of default, and are guaranteed by certain of the Borrower’s domestic subsidiaries. As of December 31, 2022, the Company believes the Borrower was in compliance with these covenants. The Revolving Facility matured in May 2022 and was not renewed. The 2021 Revolving Facility, the 2017 First Lien Term Facility and the 2019 First Lien Term Facility have an 18-month, seven-year and five-year term, respectively, and are set to expire on November 1, 2023, May 1, 2024 and May 1, 2024, respectively.

The Borrower is required to make amortization payments on each of the 2017 First Lien Term Facility and the 2019 First Lien Term Facility at a rate of 1.0% of the original principal amount per annum, payable on a quarterly basis, with the remaining balance to be repaid in full at maturity. The 2017 First Lien Term Facility bears interest at a rate based on LIBOR plus a margin that can vary from 2.0% to 3.0%. The 2019 First Lien Term Facility bears interest at a rate based on LIBOR plus a margin that can vary from 3.0% to 4.0%. The 2017 Second Lien Term Facility, which was repaid in August 2021, bore interest at a rate based on LIBOR plus a margin that varied from 6.25% to 7.25%. As of December 31, 2022, the rate for the 2017 First Lien Term Facility was 7.4%, and the rate for the 2019 First Lien Term Facility was 8.4%.

The 2021 Revolving Facility allows the Borrower to borrow, repay and reborrow over its stated term. The 2021 Revolving Facility provides a sublimit for the issuance of letters of credit of up to $30.0 million at any one time. Borrowings under the 2021 Revolving Facility bear interest at a rate based on LIBOR plus a margin that can vary from 2.5% to 3.0% or, at the Borrower’s option, the alternative base rate, which is defined as the higher of (a) the Federal Funds Rate plus 0.5%, (b) the JP Morgan prime rate or (c) one-month LIBOR plus 1%, in each case, plus a margin that can vary from 1.5% to 3.0%. As of December 31, 2022, the rate for the Revolving Facility and the 2021 Revolving Facility was 7.7%. The Borrower is required to pay a letter of credit fee on the face amount of each letter of credit, at a 0.125% rate per annum. The Revolving Facility matured in May 2022 and was not renewed. The balance of the 2021 Revolving Facility was $42.0 million as of December 31, 2022.

The aggregate maturities of our long-term debt, including the 2021 Revolving Facility, are as follows as of December 31, 2022 (in millions):
For the years ending:Principal amount
2023$53.5 
2024853.5 
2025— 
2026— 
Total$907.0 

Interest expense, net

Interest expense, net for the years ended December 31, 2022, 2021 and 2020 consist of the following (in millions):

202220212020
Interest expense on debt, net of capitalized interest$45.2 $53.3 $66.6 
Interest expense on capital leases114.2 101.5 98.0 
Amortization of deferred financing costs and fees3.9 10.1 5.8 
Interest income on Promissory Notes (Note 21)— — (1.0)
Total$163.3 $164.9 $169.4 
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CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


Note 13.     Warrant liabilities

In September 2020, in connection with the IPO, SVAC issued Public Warrants to purchase shares of the SVAC Class A common stock at $11.50 per share. A portionSimultaneously with the consummation of the proceeds fromIPO, SVAC issued Private Placement Warrants to purchase shares of its Class A common stock at $11.50 per share to the saleSponsor and to SVAC’s underwriters. In July 2021, in connection with the Business Combination transaction described in Note 3, additional Public Warrants and Private Placement Warrants were issued to SVAC common shareholders, including the Forward Purchasers.

In December 2021, the Company announced that it would redeem all of the Public Warrants and Private Placement Warrants that remained outstanding as of 5:00 p.m., New York time, on January 19, 2022 (the “Redemption Time”). Pursuant to the terms of the Warrant Agreement, prior to the Redemption Time, the warrant holders were permitted to exercise their warrants either (a) on a cash basis by paying the exercise price of $11.50 per warrant in cash or (b) on a “cashless basis,” in which case the holder would receive 0.265 shares of Class A common stock per warrant. As a result of the redemption notice for the Public Warrants and Private Placement Warrants, the valuation method for the Private Placement Warrants to the Sponsor was added to the proceedschanged from the Initial Public Offering held inMonte Carlo Simulation to utilizing a fair value based on the Trust Account. If the Company does not complete an Initial Business Combination within the Combination Period, the Private Placement Warrants will expire worthless. The Private Placement Warrants will be non-redeemable for cash and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted transferees.

The Sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Warrants until 30 days after the completionpublicly traded closing price of the Initial Business Combination.

Related Party Loans

On November 27, 2019, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note (the “Note”). The Note was non-interest bearing and payable on the earlier of October 31, 2020 or the completion of the Initial Public Offering. The Company borrowed approximately $141,000 under the Note and fully repaid the Note on September 14, 2020.

In addition, in order to finance transaction costs in connection with an Initial Business Combination, the Sponsor or an affiliate of the Sponsor, or the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes an Initial Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. In the eventWarrants given that, an Initial Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. The Working Capital Loans would either be repaid upon consummation of an Initial Business Combination, without interest, or, at the lender’s discretion, up to $1.5 million of such Working Capital Loans may be convertible into warrants at a price of $1.50 per warrant. The warrants would be identical to the Private Placement Warrants. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. To date, the Company had no borrowings under the Working Capital Loans.


Administrative Services Agreement

The Company entered into an agreement that provides that, commencing on the date that the securities of the Company are first listed on The Nasdaq Stock Market LLC and continuing until the earlier of the Company’s consummation of an Initial Business Combination or the Company’s liquidation, the Company will pay the Sponsor a total of $10,000 per month for office space, administrative and support services. The Company incurred approximately $36,000 for expenses in connection with the Administrative Servicesterms of the redemption notice, the exercise and settlement provision of the Public Warrants and Private Placement Warrants were substantially the same. Such fair value determination represents a Level 2 fair value input.


On January 26, 2022, the Company completed the redemption of all of its outstanding warrants that were issued under the Warrant Agreement fromand that remained outstanding at the listing date throughRedemption Time, at a redemption price of $0.10 per warrant. Between December 31, 2020, which is reflected20, 2021, and the Redemption Time, warrant holders elected to exercise 134,443 warrants on a cash basis for $1.5 million, and 10,115,180 Public Warrants and 8,576,940 Private Warrants on a “cashless basis,” resulting in the accompanyingissuance by the Company of 5,087,612 shares of Class A common stock. On January 26, 2022, the Company redeemed 1,370,760 warrants for $0.1 million, which was recorded as an expense in the change of fair value of warrant liabilities in other income (expenses), net in the consolidated statements of operations. AsThe warrant shares were issued in transactions not requiring registration under the Securities Act in reliance on the exemption contained in Section 3(a)(9) of the Securities Act. Upon completion of the redemption, the Public Warrants ceased trading on the Nasdaq and were deregistered, to the extent unsold.

For the Public Warrants and Private Placement Warrants exercised through the Redemption Time, the warrants were marked to market through the settlement date utilizing the publicly traded closing stock price of the Public Warrants on the settlement date, with changes in the fair value through the settlement date recorded as change of fair value of warrant liabilities in other income (expenses), net in the consolidated statements of operations. Upon settlement, the remaining warrant liabilities were derecognized and the liabilities and cash received from warrant holders was recorded as consideration for the common shares issued (an increase of $54.2 million was recorded to additional paid in capital).

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CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

There were no Level 3 warrant liabilities outstanding during the year ended December 31, 2020, there2022. There was $10,000 payable.

a transfer between fair value measurement level (from Level 3 to Level 2) for Private Placement Warrants that were called for redemption in December 2021. The Sponsor,following table presents information about the Company’s executive officersmovement in its Level 1 and directors or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurredLevel 2 warrant liabilities measured at fair value during the year ended December 31, 2022 and 2021 (in millions):


(in millions)Public Warrants (Level 1)Private Placement Warrants (Level 2)Private Placement Warrants (Level 3)Total
Balance at January 1, 2021$— $— $— $— 
Warrants assumed on July 29, 202123.2 — 18.6 41.8 
Level 3 transfer-out and Level 2 transfer-in— 18.6 (18.6)— 
Change in fair value of the warrant liabilities15.510.0 — 25.5 
Warrants exercised for Class A common stock(2.6)— — (2.6)
Balance at December 31, 2021$36.1 $28.6 $— $64.7 
Warrants exercised for Class A common stock(28.9)(24.0)— (52.9)
Change in fair value of the warrant liabilities(7.2)(4.6)— (11.8)
Balance at December 31, 2022$— $— $— $— 

Note 14. Shareholders’ equity

As mentioned in connection with activities onNote 1, the Company’s behalf such as identifying potential target businesses and performing due diligence on suitable Initial Business Combinations. The Company’s audit committee will review on a quarterly basisequity structure has been restated in all payments that were madethe comparative periods up to the Sponsor, officers, directors or their affiliates and will determine which expenses andClosing Date to reflect the amountnumber of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on the Company’s behalf.

Note 6—Commitments and Contingencies

Forward Purchase Agreement

On September 9, 2020, certain clients of Starboard Value LP, a Delaware limited partnership, which are also the majority-owners of the Sponsor, entered into a forward purchase agreement (the “forward purchase agreement”) with the Company, pursuant to which such clients (the “forward purchasers”) will purchase shares of the Company’s Class A common stock, (“forward purchase shares”) at a price equal to $9.50$0.0001 par value per share, in a private placement that will close simultaneously with the closing of the Initial Business Combination. At the closing, the forward purchasers will purchase the number of forward purchase shares from the Company that would result in net proceeds in an aggregate amount necessaryissued to satisfy the Redemption Obligation, subject to a maximum funding commitment by the forward purchasers of $100,000,000. In addition,Legacy Cyxtera’s shareholder in connection with their purchasethe Business Combination. Accordingly, the shares and corresponding capital amounts and earnings per share prior to the Business Combination have been retroactively restated as of any forward purchaseJanuary 1, 2020, to 115,745,455 shares, as shown in the forward purchasers will acquire private placement warrants at the distribution time.consolidated statements of changes in shareholders’ equity. The forward purchasers have agreed that they will not redeem anyCompany’s authorized share capital consists of 510,000,000 shares of capital stock, of which 500,000,000 are designated as Class A common stock, held by them in connection with the Initial Business Combination. The forward purchase sharesand 10,000,000 are identical to thedesignated as preferred stock. As of December 31, 2020, Legacy Cyxtera had 115,745,455 shares of Class A common stock includedissued and outstanding, which shares were owned by SIS. On February 19, 2021, Cyxtera redeemed, cancelled and retired 9,645,455 shares of its common stock, par value $0.0001, prior to the Business Combination, held by SIS, in exchange for the payment of $97.9 million by the Company to SIS. From December 20, 2021 through the Redemption Time, 10,115,180 Public Warrants and 8,576,940 Private Placement Warrants, respectively, were exercised in accordance with the terms of the Warrant Agreement, resulting in the Units, except that the forward purchaseissuance of 5,087,612 shares are subject to transfer restrictions and certain registration rights, as described herein, and there is no contingent right to receive Distributable Redeemable Warrants attached to the forward purchase shares. Rather, in connection with their purchase of any forward purchase shares, the forward purchasers will acquire private placement warrants.

Optional Share Purchase Agreement

Class A common stock. In addition, on September 9, 2020,January 31, 2022, the Company entered intoissued a total of 7,500,000 Optional Shares for an agreement with the forward purchasers, pursuant to which the forward purchasers may, at their option in whole or in part, anytime or from time to time during the 6-month period following the closing of the Initial Business Combination,aggregate purchase additional common equity of the surviving entity in the Initial Business Combination at a price of $10.00 per share (or other relevant equity interest) (the “optional shares”) for aggregate consideration not to exceed$75.0 million. As of December 31, 2022, the difference between (i) $150.0 million and (ii) the lesser of  (a) the Redemption Obligation or (b) $100.0 million (the “optional share purchase agreement”).


Registration Rights

The holders of Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans, if any, (and anyCompany had 179,683,659 shares of Class A common stock issuable uponissued and outstanding. Effective July 29, 2022, the exercise ofSIS interest in the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) are entitled to registration rights pursuant to a registration rights agreement. These holders will be entitled to certain demand and “piggyback” registration rights. However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until the termination of the applicable lock-up period for the securities to be registered. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Pursuant to the forward purchase agreement, the Company has agreed to use its commercially reasonable efforts to (i) within 30 days after the closing of the Initial Business Combination, file a registration statement with the SEC for a secondary offering of the forward purchase shares and any private placement warrants (including the shares ofCompany’s Class A common stock issuable upon exercise thereof) issuedwas distributed to the forward purchasers, (ii) cause such registration statement to be declared effective promptly thereafter, butBCEC-SIS Holdings L.P (the “BC Stockholder”), Medina Capital Fund II - SIS Holdco, L.P. (“Medina Stockholder”) and other owners of SIS, resulting in no event later than 60 days after such closing and (iii) maintain the effectiveness of such registration statement, until the earlier of  (A) the date on which the forward purchasers cease to hold the securities covered thereby and (B) the date all of the securities covered thereby can be sold publicly without restriction or limitation under Rule 144 under the Securities Act and without the requirement to be in compliance with Rule 144(c)(1) under the Securities Act, subject to certain conditions and limitations set forth in the forward purchase agreement. The Company will bear the costs of registering the forward purchase shares and private placement warrants. The optional share purchase agreement provides that the forward purchasers are entitled to certain registration rights with respect to their optional shares.

Underwriting Agreement

The underwriters were entitled to an underwriting discount of $0.20 per Unit, and were paid approximately $8.1 million in the aggregate, upon the closing of the Initial Public Offering and the sale of Over-Allotment Units. The underwriters agreed and paid approximately $2.0 million to the Company to reimburse certainBC Stockholder. owning 38.0% of the Company’s expenses in connection withClass A common stock, Medina Stockholder owning 12.8% of the Initial Public OfferingCompany’s Class A common stock, and the saleremaining portion of Over-Allotment Units.

An additional fee of $0.45 per Unit, or $18.2 million in the aggregate, will be payableSIS’s ownership was distributed to other shareholders. Prior to the underwriters for deferred underwriting commissions. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes an Initial Business Combination, subject to the termsSIS distribution, SIS owned 61.5% of the underwriting agreement.

Deferred Legal Fees

The Company obtained legal advisory service with a legal counsel firm in connection with the Initial Public Offering and agreed to pay the legal counsel firm an amount of $250,000 solely in the event that the Company completes an Initial Business Combination.

Note 7—Warrant Liabilities

Company’s Class A common stock. As of December 31, 2020, the Company has 6,737,2422022 and 6,723,127 Public Warrants and Private Placement Warrants, respectively, outstanding. Public Warrants may only be exercised for a whole number of shares. No fractional Public Warrants will be issued upon separation of the Units and only whole Public Warrants will trade. The Public Warrants will become exercisable on the later of  (a) 30 days after the completion of an Initial Business Combination or (b) 12 months from the closing of the Initial Public Offering; provided in each case that the Company has an effective registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the Public Warrants and a current prospectus relating to them is available (or the Company permits holders to exercise their Public Warrants on a cashless basis and such cashless exercise is exempt from registration under the Securities Act). The Company has agreed that as soon as practicable, but in no event later than 15 business days, after the closing of an Initial Business Combination, the Company will use its reasonable best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the shares of Class A common stock issuable upon exercise of the Public Warrants. The Company will use its reasonable best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Public Warrants in accordance with the provisions of the warrant agreement. Notwithstanding the above, if the Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless” basis, and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but the Company will be required to use its reasonable best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. The Public Warrants will expire five years after the completion of an Initial Business Combination or earlier upon redemption or liquidation.


The Private Placement Warrants are identical to the Public Warrants, except that the Private Placement Warrants and the shares of Class A common stock issuable upon exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of an Initial Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be non-redeemable so long as they are held by the Sponsor or its permitted transferees. If the Private Placement Warrants are held by someone other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

Once the warrants become exercisable, the Company may call the Public Warrants for redemption:

in whole and not in part;
at a price of $0.01 per warrant;
upon a minimum of 30 days’ prior written notice of redemption; and
if, and only if, the closing price of the Class A common stock equals or exceeds $18.00 per share on each of 20 trading days within the 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.

If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.

In addition, commencing 90 days after the warrants become exercisable, the Company may redeem the outstanding warrants for shares of Class A common stock (including both Public Warrants and Private Placement Warrants):

in whole and not in part;
at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption, provided that holders will be able to exercise their warrants prior to redemption and receive that number of shares of Class A common stock determined by reference to an agreed table described in the warrant agreement, based on the redemption date and the “fair market value” of the Class A common stock except as otherwise described below;
if, and only if, the last sale price of the Class A common stock equals or exceeds $10.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) on the trading day prior to the date on which the Company sends the notice of redemption to the warrantholders;
if, and only if, the Private Placement Warrants and the private placement warrants to be issued pursuant to the forward purchase agreement are also concurrently exchanged at the same price (equal to a number of shares of Class A common stock) as the outstanding Public Warrants, as described above; and
if and only if, there is an effective registration statement covering the issuance of the shares of Class A common stock issuable upon exercise of the warrants and a current prospectus relating thereto available throughout the 30-day period after written notice of redemption is given, or an exemption from registration is available.


The exercise price and number of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances, including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. In addition, if  (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of the Initial Business Combination at an issue price or effective issue price of less than $9.20 per share (with such issue price or effective issue price to be determined in good faith by the Company and, (i) in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance, and (ii) without taking into account (A) the transfer of Founder Shares or Private Placement Warrants (including if such transfer is effectuated as a surrender to the Company and subsequent reissuance by the Company) by the Sponsor in connection with such issuance) or (B) any private placement warrants issued pursuant to the forward purchase agreement (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the Initial Business Combination on the date of the consummation of the Initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Class A common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its Initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.

In no event will the Company be required to net cash settle any warrant. If the Company is unable to complete an Initial Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.

Note 8—Stockholders’ Equity

Preferred stock — The Company is authorized to issue 1,000,000 shares of preferred stock, par value $0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of December 31, 2020 and December 31, 2019,2021, there were no shares of preferred stock issued or outstanding.


During the year ended December 31, 2021, SIS made a capital contribution of $5.2 million to fund a Business Combination transaction bonus that was paid to current and former employees and directors of Legacy Cyxtera. The transaction bonus of $5.2 million is included within transaction-related costs in the consolidated statements of operations for the year ended December 31, 2021.

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CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 15.    Stock-based compensation

Stock-based compensation includes stock options, RSUs, PSUs and class B units in SIS Holdings LP, which are awarded to employees, and directors of the Company, and also includes shares purchased under the ESPP. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period of the award based on its grant date fair value. Stock-based compensation expense is included within cost of revenues, excluding depreciation and amortization, and selling, general and administrative expense in the consolidated statements of operations.

SIS Holdings LP Class B Profit Units

SIS adopted the SIS Holdings LP Class B Unit Plan (the “SIS Plan”) in May 2017. The purpose of the SIS Plan was to promote the interests of SIS and its controlled affiliates, including Cyxtera and Appgate, Inc. (the Company’s former cybersecurity business) (“Appgate”), by (a) attracting and retaining officers, directors, managers, employees and consultants of SIS and its controlled affiliates and (b) enabling such persons to acquire an equity interest in and participate in the long-term growth and financial success of SIS and its controlled affiliates. 1,000,000 Class B profit interest units were available for issuance pursuant to awards under the SIS Plan. Class B units issued under the SIS Plan are limited partnership units in SIS and are subject to the terms and conditions of the Amended and Restated Limited Partnership Agreement of SIS, dated May 1, 2017.

All awards were issued in 2017, 2018 and 2019 (none were issued in 2020, 2021 or 2022). Awards under the SIS Plan are subject to a vesting schedule measured by a service condition such that awards vest 25% after the first anniversary of issue date (or, with respect to certain employees, the earlier of their hire date and May 1, 2017) and the remainder vest in equal monthly installments over the 42 months following the initial vesting date. In addition, vesting of all unvested units will be accelerated upon the satisfaction of a performance condition, namely an “exit event.” An exit event is defined as a change of control through sale of all or substantially all of the assets of SIS and its subsidiaries (whether by merger, recapitalization, stock sale or other sale or business combination, including the sale of any subsidiary accounting for all or substantially all of the revenues of SIS and its subsidiaries on a consolidated basis) or any transaction resulting in a change of in excess of 50% of the beneficial ownership of the voting units of SIS. The holders of the Class B units were not required to make any capital contributions to SIS or the Company in exchange for their Class B units and are entitled to receive distributions on their vested units (including those accelerated upon an exit event).

A common stocksummary of PIU awards granted by SIS to the employees of the Company, for the years ended December 31, 2022, 2021 and 2020 is presented below:
Number of unitsWeighted-average grant date fair value
Outstanding at January 1, 2020686,714 $82.65 
Forfeited(48,995)$(81.95)
Outstanding at December 31, 2020637,719 $82.70 
Forfeited(4,407)$(89.00)
Outstanding at December 31, 2021633,312 $82.63 
Forfeited— $— 
Outstanding at December 31, 2022633,312 $82.63 
Equity-based compensation costs totaled $0.8 million, $6.3 million, and $7.5 million, respectively, for the years ended December 31, 2022, 2021 and 2020, of which $0.8 million, $6.0 million, and $6.9 million, respectively, is included in selling, general and administrative expenses and an inconsequential amount, $0.3 million, and $0.6 million, respectively, is included in cost of revenues, excluding depreciation and amortization, in the accompanying consolidated statements of operations. No related income tax benefit was recognized as of December 31, 2022, 2021 or 2020.

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CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31, 2022, total equity-based compensation expense related to 14,982 unvested Class B Units not yet recognized totaled $1.5 million, which is expected to be recognized over a weighted-average period of 1.7 years.

Stock Options

Effective as of July 29, 2021, the Company adopted the 2021 Plan. The Company is authorized to issue 200,000,000total number of shares of Class A common stock withauthorized for issuance under the 2021 Plan is 13,278,299. On August 5, 2021, the Company granted stock options under the 2021 Plan. Such options are a parform of employee compensation for certain Cyxtera employees. The stock options granted will vest and become exercisable as to 25% of the number of shares granted on the one-year anniversary of the grant date, and the remainder of the options will vest ratably in twelve equal quarterly installments over the three-year period following the anniversary of the grant date. The options generally expire 10 years from the grant date in each case subject to continued employment on the applicable vesting date.

The fair value of $0.0001stock options awards was estimated at the grant date at $2.42 per share. share using a Black Scholes valuation model, with the following weighted average assumptions for the year ended December 31, 2021:

Stock Options Granted during the Year Ended
December 31, 2021
Expected term (in years)6.1
Expected stock volatility30.7 %
Risk-free interest rate0.87 %
Stock price at grant date$8.65 
Exercise price$9.55 
Dividend yield— %

The expected term of the options represents the estimated period of time until exercise and is based on historical experience of similar awards, giving consideration to the contractual terms, vesting schedules and expectations of future employee behavior. Expected stock price volatility is based on the volatility of the stock of public company peers. The risk-free interest rate is based on the implied yield available on US Treasury zero-coupon issues with an equivalent remaining term. The dividend yield assumption is based on our anticipated cash dividend payouts.

Stock option transactions for the year ended December 31, 2022 are as follows:
Shares Subject to OptionsWeighted Average Exercise Price per ShareWeighted Average Remaining Contractual Life (Years)Aggregate Intrinsic Value
Outstanding from January 1, 2022849,233 $9.55 — $— 
Granted6,228 $— 
Exercised— $— 
Expired/forfeited(24,914)$9.55 
Outstanding at December 31, 2022830,547 $9.55 8.6$— 
Exercisable, December 31, 2022263,823 $— — $— 
Ending vested and expected to vest, December 31, 2022830,547 $9.55 8.6$— 

The aggregate intrinsic value in the table above is the amount by which the value of the underlying stock exceeded the exercise price of outstanding options, before applicable income taxes, and represents the amount optionees would have realized if all-in-the-money options had been exercised on the last business day of the period indicated.

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CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31, 2020, there were 40,423,453 shares2022, the total unrecognized stock-based compensation, related to unvested options was approximately $1.3 million, before income taxes, and is expected to be recognized over a weighted average period of Class A commonapproximately 2.6 years.

Total stock outstanding, including 33,614,040 shares of Class A commonoptions compensation expense related to the stock subject to possible redemption that were classified as temporary equityoptions for the year ended December 31, 2022 and 2021, was approximately $0.5 million, and $0.2 million, respectively and is recorded in selling, general and administrative expenses in the accompanying condensed balance sheet. Asconsolidated statements of operations. The related income tax benefit for the year ended December 31, 2019, there were no2022 and 2021, was inconsequential.

Restricted Stock Units

On October 1, 2021, November 12, 2021, March 23, 2022, April 8, 2022 and June 8, 2022, the Company granted approximately 3.2 million, 0.2 million, 1.6 million, 0.1 million and 0.1 million of RSUs under the 2021 Plan. RSUs may be settled in shares or cash at the Company’s option with board of Class A common stock issueddirectors or outstanding.

Class B common stockcompensation committee approval. The Company is authorizedhas the intent and ability to issue 20,000,000 shares of Class B common stocksettle the RSU awards with a parshares. The fair value of $0.0001 per share. In November 2019,RSUs granted is determined using the Company issued 8,625,000 shares of Class B common stock. On September 9, 2020, the Company effected a share capitalization, resulting in an aggregate of 10,350,000 shares of Class B common stock outstanding. All shares and associated amounts have been retroactively restated to reflect the share capitalization. The Sponsor and the Company’s Chief Executive Officer agreed to forfeit up to 1,350,000 Founder Shares to the extent that the over-allotment option was not exercised in full by the underwriters so that the Founder Shares would represent 20.0% of the Company’s issued and outstanding shares after the Initial Public Offering. On September 23, 2020, upon the underwriters’ partial exercise of the over-allotment, an aggregate of 244,137 Founder Shares were forfeited by the Sponsor and the Company’s Chief Executive Officer. As of December 31, 2020 and December 31, 2019, there were 10,105,863 and 10,350,000 shares of Class B common stock outstanding, respectively.

Prior to the Initial Business Combination, only holders of the Company’s Class B common stock will have the right to vote on the election of directors. Holders of the Class A common stock will not be entitled to vote on the election of directors during such time. These provisions of the Certificate of Incorporation may only be amended if approved by the holders of at least 90% of the Company’s common stock entitled to vote thereon. With respect to any other matter submitted to a vote of the Company’s stockholders, including any vote in connection with the Initial Business Combination, except as required by applicable law or stock exchange rule, holdersfair value of the Company’s Class A common stock on the date of the grant, which was $9.30, $9.54, $11.66, $12.66, and holders$14.50, respectively. RSUs were granted to members of the board of directors and employees of the Company. The RSUs granted to the members of the board vest over on the one year anniversary of the date of grant. The RSUs issued to employees vest in three equal annual installments.


RSUs transactions for the year ended December 31, 2022 are as follows:

Shares Subject to RSUsWeighted Average Exercise Price Per ShareWeighted Average Remaining Contractual Life (Years)Weighted Average Grant Date
Fair Value
Aggregate Intrinsic Value
Outstanding from January 1, 20223,335,811 $— — $9.34 $— 
Granted1,881,191 $— $11.81 
Vested(1,117,307)$— $9.38 
Expired/forfeited(160,732)$— $9.88 
Outstanding at December 31, 20223,938,963 $— 1.1$10.47 $7,562,809 
Exercisable, December 31, 2022— $— — $— $— 
Ending vested and expected to vest, December 31, 20223,938,963 $— 1.1$10.47 $7,562,809 

As of December 31, 2022, the total unrecognized stock-based compensation, net of actual forfeitures, related to unvested RSUs was approximately $30.5 million, before income taxes, and is expected to be recognized over a weighted period of approximately 1.8 years. The total fair value of RSUs vested was $12.8 million during the year ended December 31, 2022.

Total RSU compensation expense totaled $18.1 million and $3.0 million, respectively, for the year ended December 31, 2022 and 2021, of which approximately $16.8 million and $2.8 million, respectively, is recorded in selling, general and administrative expenses and $1.3 million and $0.2 million, respectively, is recorded in cost of revenues, excluding depreciation and amortization, in the consolidated statements of operations. The related income tax benefit for the year ended December 31, 2022 was $3.5 million (2021 was inconsequential).

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CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Performance Stock Units

The Company has granted PSUs under the Company’s 2021 Plan. The Company has the intent and ability to settle the PSU awards with shares. The PSU will vest based on both the passage of time and achievement of certain market and performance conditions that are measured during a three-year period beginning on January 1, 2022, subject to continued employment on the applicable vesting dates. The actual number of PSUs earned with respect to an award is based upon the target number of PSUs, multiplied by a “payout percentage” ranging from 0% to 200% of target level and determined by the level of performance against pre-established performance or market components for the applicable performance period. The PSUs are subject to two types of performance conditions: relative total shareholder return (“TSR”) based on achievement of certain market conditions, and adjusted earnings before interest, taxes, depreciation and amortization (“Adj. EBITDA”), each of which is weighted one-half of the PSU, as shown in more detail below.

Payout Percentage
MetricWeightPerformance PeriodVesting PeriodIndexBelow ThresholdThresholdTargetMaximum
TSR50%3-year rollingAnnual (33.33% per year)Russell 10000%
50% (25th percentile)
100% (50th percentile)
200% (75th percentile)
Adj. EBITDA50%3-year rollingAnnual (33.33% per year)N/A0%50%100%200%

The award of PSUs will vest in three equal installments on the 1st, 2nd and 3rd anniversary of the grant date. The PSUs will be earned based on the Company’s achievement of the applicable performance goals as follows:

Year One of the performance period: Award will vest based on performance during the first year of the performance period;
Year Two: Award will vest based on cumulative performance during the first two years of the performance period;
Year Three: Award will vest based on cumulative performance during the three years of the performance period.

The payout percentage will be linearly interpolated if achievement falls between the threshold and target or target and maximum levels of performance.

With respect to the TSR measured component, the PSUs were valued using a Monte-Carlo simulation. The key assumptions used to determine the fair value of the TSR measured component of the PSUs at March 23, 2022 (grant date) using the Monte Carlo simulation model were as follows:

InputsAs of March 23, 2022
Risk-free interest rate2.3 %
Volatility for Least-Square Monte Carlo Model39.0 %
Expected Term in Years2.8
Dividend Yield— %
Fair Value of Class A Common Stock$11.66 

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CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

With respect to the Adj. EBITDA measured component, the PSUs for the first year were valued using the fair value of the Company’s Class B common stock will vote together as a single class, with each share entitling the holder to one vote.


The Class B common stock will automatically convert into Class A common stock aton the timedate of the Initial Business Combination on a one-for-one basis, subject to adjustment. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts sold in the Initial Public Offering and related to the closing of the Initial Business Combination (other than the forward purchase shares and the private placement warrants delivered pursuant to the forward purchase agreement), the ratio atgrant, which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so thatwas $11.66 multiplied by the number of shares of Class A common stock issuable upon conversionexpected to be earned based on the Company’s estimate of allfuture Adj. EBITDA, to be realized in Year One. The Adj. EBITDA measured PSUs for Year Two and Year Three, are not deemed granted for accounting purposes because the adjusted EBITDA targets for 2023 and 2024 are not yet determinable as they have not been approved by the board of directors.


The following table summarizes PSU activity for the year ended December 31, 2022:
Number of UnitsWeighted-average grant date fair value
Non-vested as of January 1, 2022— $— 
Granted (1)
349,766 $15.78 
Vested— $— 
Forfeited— $— 
Unvested as of December 31, 2022349,766 $15.78 

(1) Year Two and Year Three Adj. EBITDA measured PSUs are excluded from the total amount of granted PSUs, since such units are not deemed granted for accounting purposes as of December 31, 2022. We excluded 174,883 of Year Two and Year Three Adj. EBITDA measured PSUs.

As of December 31, 2022, the total unrecognized stock-based compensation expense related to unvested PSUs was approximately $2.8 million, before income taxes, and is expected to be recognized over a weighted period of approximately 1.0 years. No PSUs vested during the year ended December 31, 2022.

Total PSU compensation expense was $2.7 million for the year ended December 31, 2022 and was recorded in selling, general and administrative expenses in the consolidated statements of operations. The related income tax benefit for the year ended December 31, 2022 was inconsequential.

Employee Stock Purchase Plan

Effective as of June 8, 2022, the Company adopted the 2022 Employee Stock Purchase Plan (the “ESPP”) under which shares of Class Bthe Company’s common stock will equal, in the aggregate, on an as-converted basis, 20% of theare available for purchase by eligible participants. The total number of all shares of common stock outstanding upon completion of the Initial Public Offering plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with the Initial Business Combination (net of the number of shares of Class A common stock redeemed in connection withauthorized for issuance under the Initial Business Combination), excluding the forwardESPP is 1,785,664. The ESPP allows participants to purchase shares and private placement warrants delivered pursuant toof Class A common stock at 85% of its fair market value at the forward purchase agreement, any shareslower of (i) the date of commencement of the offering period or equity-linked securities issued, or to be issued, to any seller(ii) the last day of the exercise period, as defined in the Initial Business Combination and any Private Placement Warrants issued upon the conversion of Working Capital Loans made to the Company.

Note 9—Fair Value Measurements

The following table presents information about the Company’s financial assets that are measured at fair value on a recurring basis as of December 31, 2020 by level within the fair value hierarchy:

Description Quoted
Prices
in Active
Markets
(Level 1)
  Significant
Other
Observable
Inputs
(Level 2)
  Significant
Other
Unobservable Inputs
(Level 3)
 
Assets:            
Investments held in Trust Account:            
   U.S. Treasury Securities (1) $404,400,376  $      -  $- 
Liabilities:            
Derivative warrant liabilities $13,272,368  $-  $27,244,372 
Forward purchase agreement $  $-  $6,803,550 

(1)Excludes $2,940 of cash held in the Trust Account as of December 31, 2020.

Transfers to/from Levels 1, 2, and 3 are recognized at the end of the reporting period. The estimated fair value of the Detachable Redeemable Warrants transferred from a Level 3 measurement to a Level 1 fair value measurement in November 2020, when the Detachable Redeemable Warrants were separately listed and traded.

plan documents.


The fair value of purchases under the Public Warrants and Private Placement Warrants were initially measured at fair valueCompany’s ESPP is estimated using a modifiedthe Black-Scholes option pricing model and subsequently, theoption-pricing valuation model. The determination of fair value of stock-based awards using an option-pricing model is affected by the Public WarrantsCompany’s stock price as well as assumptions pertaining to several variables, including expected stock price volatility, the expected term of the award and Private Placement Warrants have been estimated using a modified Black-Scholes option pricingthe risk-free rate of interest. In the option-pricing model each measurement date, other than for the Detachable Redeemable Warrants which have been measuredCompany’s employee stock purchase plans, expected stock price volatility is based on the listed market price of such warrants, a Level 1 measurement, since November 2020. For the period ended December 31, 2020, the Company recognized a charge to the statement of operations resulting from an increase in the fair value of liabilities of approximately $26.3 million presented as change in fair value of derivative warrant liabilities on the accompanying statement of operations.


The estimated fair value of the Public Warrants and Private Placement Warrants, excluding the Detachable Redeemable Warrants after being separately listed and traded, is determined using Level 3 inputs. Inherent in a Black-Scholes option pricing model are assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its warrants based on implied volatility from the Company’s traded warrants and from historical volatility of select peer company’sthe Company’s Class A common stock that matches thestock. The expected remaining lifeterm of the warrants. The risk-free interest rateaward is based on the U.S. Treasury zero-couponsix-month requisite period. The Company has not paid dividends in the past, and has not announced any intention to pay dividends in the foreseeable future, and therefore uses an expected dividend yield curve on the grant date for a maturity similarof zero.

95


CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


The following table provides details pertaining to the expected remaining life ESPP for the periods indicated:

For the Year Ended December 31, 2022
Cash proceeds (in millions)$0.8 
Common shares issued159,626 
Fair value of ESPP at grant date$5.73 
Stock price at grant date$5.83 

As of December 31, 2022, the warrants. Thetotal unrecognized stock-based compensation expense related to the ESPP was approximately $0.1 million, before income taxes, and is expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based onrecognized over a weighted period of approximately 0.5 years.

Non-cash stock-based compensation expense under the historical rate, which the Company anticipates remaining at zero.

The following tables provides quantitative information regarding Level 3 fair value measurements inputs at their measurement dates:

  As of December 31, 2020 
Warrants:    
Option term (in years)  5.6 
Volatility  27.00%
Risk-free interest rate  0.45%
Expected dividends  - 
Stock price $10.06 
     
Forward purchase agreement:    
Expected term  0.6 
Risk-free interest rate  0.09%
Stock price $10.06 

Note 10—Income Taxes

The Company’s taxable income primarily consists of interest income on the Trust Account. The Company’s general and administrative expenses are generally considered start-up costs and are not currently deductible. ThereESPP was no income tax expense$0.2 million for the year ended December 31, 2020 and2022. The related income tax benefit for the period from November 14, 2019 (inception) through year ended December 31, 2019.

2022 was inconsequential.


Note 16. Cyxtera Management, Inc. Long-Term Incentive Plan

On February 13, 2018, Cyxtera Management Inc. (the “Management Company”) adopted the Cyxtera Management, Inc. Long-Term Incentive Plan (the “LTI Plan”). The purpose of the LTI Plan is to retain key talent, attract new employees, align particular behavior with the common goals of profitability and revenue growth, provide incentive awards, the value of which are tied to the equity value of SIS, and to create an opportunity for certain key employees to participate in value creation.

The value of award units under the LTI Plan is tied to SIS’s equity value. Award units entitle the holder to share in the equity appreciation of SIS upon an exit event or an initial public offering. Except in the case of an initial public offering, any payments in respect of the awards are expected to be made in cash. In an initial public offering, payment may be made in the stock of the initial public offering vehicle. The payout is estimated to range between $0 and $70.0 million, depending on a multiple based on the results of the exit event or initial public offering. While awards under the LTI Plan vest, to the extent there is no exit event or an initial public offering, the awards expire after seven years from the grant date. The Company has determined that no expense or liability should be recognized under this LTI Plan until an exit event or initial public offering occurs.

As described in Note 1, on February 21, 2021, Cyxtera entered into the Merger Agreement, which closed on July 29, 2021. Pursuant to the Merger Agreement, the Company caused its subsidiaries to declare an “Early Settlement Event” under (resulting in the final settlement of) the LTI Plan and any award agreements thereunder, without liability to the Company or any of its subsidiaries.

Note 17.     Employee benefits – 401(k)

Effective July 2, 2017, the Company’s netemployees are eligible to participate in the Cyxtera 401(k) Savings Plan (the “Plan”), a defined contribution benefit plan sponsored by the Management Company. Under the Plan, the Company may make a safe harbor matching contribution equal to 100% of an employee’s salary deferral that does not exceed 1% of the employee’s compensation plus 50% of the salary deferral between 1% and 6% of the employee’s compensation.

Matching contributions made to the Plan were $2.7 million, $2.8 million and $3.0 million for the years ended December 31, 2022, 2021 and 2020, respectively, of which $1.2 million, $1.2 million and $1.8 million, respectively, is included in cost of revenues, excluding depreciation and amortization, and $1.5 million, $1.6 million and $1.2 million, respectively, is included in selling, general and administrative expenses in the accompanying consolidated statements of operations.

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CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Through December 31, 2020, employees of Appgate were eligible to participate in the Plan. Under a transition service agreement with the Management Company (“Transition Services Agreement”), costs related to the participation of Appgate employees in the Plan were charged back to Appgate. See Note 21- Certain relationships and related party transactions for further reference.

Note 18.    Income taxes

The components of loss before income taxes for the years ended December 31, 2022, 2021 and 2020 consists of the following (in millions):

202220212020
Domestic and foreign loss
US loss$(321.9)$(284.9)$(97.9)
Foreign loss(33.9)(20.8)(21.4)
Total loss before income taxes$(355.8)$(305.7)$(119.3)

The income tax benefit (expense) from continuing operations for the years ended December 31, 2022, 2021 and 2020 consists of the following (in millions):

202220212020
Current
US Federal$— $— $— 
US State and local(0.2)(0.2)(0.2)
Foreign(1.4)(0.2)(2.2)
Total current tax provision(1.6)(0.4)(2.4)
Deferred
US Federal2.4 42.5 5.7 
US State and local(1.0)4.9 (1.7)
Foreign0.9 0.8 (5.1)
Total deferred tax provision2.3 48.2 (1.1)
Total income tax benefit (expense)$0.7 $47.8 $(3.5)

The effective tax rate for the years ended December 31, 2022, 2021 and 2020 is 0.2%, 15.6% and (2.9)%, respectively. An income tax reconciliation between the US statutory tax rate of 21% for each of the years ended December 31, 2022, 2021 and 2020 and the effective tax rate is as follows (in millions):

202220212020
Income tax at US federal statutory income tax rate$74.7 $64.2 $25.1 
State and local taxes, net of federal income tax benefit7.1 12.6 9.2 
Valuation allowance(44.5)(21.9)(31.6)
Goodwill impairment loss(32.3)— — 
Change in fair value of the warrant liabilities2.5 (5.4)— 
Nondeductible equity-based compensation(0.2)(1.3)(1.6)
Taxes of foreign operations at rates different than US Federal statutory rates(2.0)1.1 (1.9)
Foreign adjustments(1.3)0.6 (1.8)
Impact of foreign law changes— (1.0)— 
Other(3.3)(1.1)(0.9)
Total income tax benefit (expense)$0.7 $47.8 $(3.5)

97


CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31, 2022 and 2021consists of the following (in millions):

20222021
Deferred tax assets
Net operating loss carryforward$94.4 $91.6 
Interest expense limitation carryforward57.9 44.9 
Finance lease263.4 55.1 
Operating lease liabilities60.4 — 
Other accruals16.1 14.1 
Acquisition and other related costs4.6 4.9 
Asset retirement obligations1.9 1.7 
Allowance for doubtful accounts0.1 1.2 
Deferred rent— 3.6 
Other11.4 4.8 
Gross deferred tax assets510.2 221.9 
Valuation allowance(98.2)(53.7)
Total deferred tax assets, net of valuation allowance412.0 168.2 
Deferred tax liabilities
Finance lease(216.0)— 
Intangibles(163.7)(165.7)
Operating lease right-of-use assets(45.3)— 
Property and equipment(6.4)(23.4)
Contract asset(3.1)(2.4)
Other(3.4)(5.6)
Total deferred tax liabilities(437.9)(197.1)
Deferred tax liabilities, net$(25.9)$(28.9)

As of December 31, 2022 and 2021, $0.1 million and $1.0 million, respectively, of deferred tax assets above is included in other assets and $26.0 million and $29.9 million, respectively, is included in deferred income tax liabilities in the accompanying consolidated balance sheets. There exists certain US federal, state, local and foreign deferred tax assets that are not expected to be realized before their expiration and as follows:

  December 31,
2020
 
Deferred tax assets:    
Start-up/Organization costs $6,596 
Net operating loss carryforwards  36,574 
Total deferred tax assets  43,170 
Valuation allowance  (43,170)
Deferred tax asset, net of allowance $- 

such are not more-likely-than-not realizable. The Company has recorded a valuation allowance against such deferred tax assets.


As of December 31, 2022, the Company has US federal NOL carryforwards of $300.8 million generated in tax years 2017 through 2022 of which $59.3 million will expire in 2037 and $241.5 million will carry forward indefinitely. The Company has state and local NOL carryforwards of $440.9 million generated in tax years beginning after 2007. The state NOL carryforwards of $376.0 million will expire from 2023 to 2042 and $64.9 million will carryforward indefinitely. Additionally, the Company has foreign NOL carryforwards of $20.4 million generated from tax years 2017 to 2022, of which $11.6 million will expire between 2031 and 2042 and $8.8 million will carryforward indefinitely.

In assessing the realizationrealizability of deferred tax assets, management considers whether it is more likely than notmore-likely-than-not that some portion or all of the deferred tax assets will not be realized. The ultimate realizationIn making such a determination, we considered all available positive and negative evidence, including our past operating results, forecasted earnings, frequency and severity of deferred tax assets is dependent upon the generationcurrent and cumulative losses, duration of future taxable income during thestatutory carryforward periods, in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax assets, projected future taxable income and prudent and feasible tax planning strategies in makingstrategies. On the basis of this assessment. After consideration of allevaluation, we continue to maintain a valuation allowance against a portion of the information available, management believes that significant uncertainty exists with respect to future realizationCompany’s deferred tax assets. As of December 31, 2022, the Company has recorded a valuation allowance of $98.2 million for the portion of the deferred tax assets and has therefore established a fullasset that did not meet the more-likely-than-not realization criteria. The Company recorded an increase in its valuation allowance.


There were no unrecognized tax benefits asallowance on its net deferred taxes of approximately $44.5 million during the year ended December 31, 2020. No amounts were accrued for the payment of interest2022. The changes in valuation allowance are primarily due to increased losses that have resulted in certain US federal, state, local and penalties at December 31, 2020. The Company is currentlyforeign

98


CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

deferred tax assets that management believes are not aware of any issuesmore-likely-than-not to be fully realized in future periods. In addition, certain state NOL carryforward assets are subject to an annual limitation under review that could result in significant payments, accruals or material deviationInternal Revenue Code Section 382. If losses continue, we may not be able to benefit from its position. such future losses and additional valuation allowances may also be required.

The Company is subject to taxation in the United States and various foreign jurisdictions. As of December 31, 2022, the Company is no longer subject to examination by the Internal Revenue Service (“IRS”) for tax years prior to 2019 and generally not subject to examination by state tax authorities for tax years prior to 2016. With few exceptions, the Company is no longer subject to foreign examinations by tax authorities for tax years prior to 2017. The Company is currently under examination in the United States by some state tax authorities. The Company is also currently under audit in Germany for its 2016 tax year; however, the outcome and any resulting liability related to Germany is not the responsibility of the Company.

The Company does not have any unrecorded uncertain tax positions (“UTPs”) as of December 31, 2022. While the Company currently does not have any UTPs, it is foreseeable that the calculation of the Company’s tax liabilities may involve dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions across the Company’s global operations. ASC 740 states that a tax benefit from an uncertain tax position may be recognized when it is more-likely-than-not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits. Upon identification of a UTP, the Company would (1) record the UTP as a liability in accordance with ASC 740 and (2) adjust these liabilities if/when management’s judgment changes as a result of the evaluation of new information not previously available. Ultimate resolution of UTPs may produce a result that is materially different from an entity’s estimate of the potential liability. In accordance with ASC 740, the Company would reflect these differences as increases or decreases to income tax examinations by major taxing authorities since inception.

expense in the period in which new information is available. The Company recognized and includes interest and penalties accrued on uncertain tax positions as a component of income tax expense.


A reconciliation of the statutory federal incomebeginning and ending amount of gross unrecognized tax rate (benefit)benefits, for 2022, 2021 and 2020, is as follows (in millions):

202220212020
Gross unrecognized tax benefits - beginning of period$— $1.0 $— 
Increases related to prior year tax positions1.2 — — 
Increases related to current year tax positions— — 1.0 
Decreases related to settlements(1.2)(1.0)— 
Gross unrecognized tax benefits - end of period$— $— $1.0 

The increase and subsequent decrease to unrecognized tax benefits during the year ended December 31, 2022 was related to the effective settlement of the Company’s effective tax rate (benefit)examination by the Internal Revenue Service for the 2017 tax year.

As of December 31, 2022 and 2021, the Company had undistributed foreign earnings of $115.6 million and $111.8 million, respectively, which the Company intends to reinvest indefinitely. As part of the Tax Act, the Company paid a one-time deemed repatriation tax on the ending balance as of December 31, 2017. With respect to the remaining total balance as of December 31, 2022, the Company does not expect to incur US federal, state, local or foreign withholding taxes on the balance of these unremitted earnings as management plans to indefinitely reinvest these earnings overseas. In the event the Company determines not to continue to assert that all or part of its undistributed foreign earnings are permanently reinvested, such a determination in the future could result in the accrual and payment of additional foreign withholding taxes and US taxes on currency transaction gains and losses, the determination of which is not practicable due to the complexities associated with the hypothetical calculation.

99


CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 19. Commitments and contingencies

Letters of credit

As of December 31, 2022 and 2021, the Company had $4.9 million and $5.7 million, respectively, in irrevocable stand-by letters of credit outstanding, which were issued primarily to guarantee data center lease obligations, to guarantee a subsidiary’s performance under a services agreement (in 2020 only), and to guarantee another subsidiary’s performance under a line of credit. As of December 31, 2022 and 2021, no amounts had been drawn on any of these irrevocable standby letters of credit.

Lease commitments

The Company entered into an agreement for power redundancy supply at a facility in Massachusetts. The service contract will contain a lease of power redundancy equipment, however, the lease has not yet commenced as followsof December 31, 2022. This lease is expected to commence in the latter half of 2023, with a total lease commitment of $22.4 million.

Purchase obligations

As of December 31, 2022 and 2021, the Company had approximately $4.4 million of purchase commitments related to information technology licenses, utilities and colocation operations. These amounts do not represent the Company’s entire anticipated purchases in the future but represent only those items for which the Company was contractually committed as of December 31, 2022 and 2021, respectively.

Litigation

From time to time the Company is involved in certain legal proceedings and claims that arise in the ordinary course of business. It is the Company’s policy to accrue for amounts related to these legal matters if it is probable that a liability has been incurred and the amount is reasonably estimable. In the opinion of management, based on consultations with counsel, the results of any of these matters individually and in the aggregate are not expected to have a material effect on the Company’s results of operations, financial condition or cash flows.

Note 20.     Segment reporting

Cyxtera’s chief operating decision maker is its Chief Executive Officer. The Company manages its operations as a single operating segment for the purposes of assessing performance and making operating decisions – the colocation segment.

The Company derives the significant majority of its colocation revenue from sales to customers in the United States, based upon the service address of the customer. Revenue derived from customers outside the United States, based upon the service address of the customer, was not significant in any individual foreign country.

Note 21.     Certain relationships and related party transactions

Relationships

The Company is party to the following agreements and key relationships:

Appgate. transition services agreement and other services

Appgate and the Management Company were parties to the Transition Service Agreement, pursuant to which the Management Company provided certain transition services to Appgate and Appgate provided certain transition services to Cyxtera. The Transition Services Agreement provided for a term that commenced on January 1, 2020, and substantially ended on December 31,
100


CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2020. Appgate is an affiliate of the Company and a direct subsidiary of SIS, and through December 31, 2019, was a direct subsidiary of the Company.

During the year ended December 31, 2020, the Company charged $3.9 million to Appgate for services rendered under the Transition Services Agreement (net of service fees provided to Cyxtera and its subsidiaries by Appgate), with a full reserve of $3.9 million. The provision for doubtful accounts is presented as part of the recovery of notes receivable from affiliates in the consolidated statement of operations for the year ended December 31, 2020:

Statutory Federal income tax rate21.0%
Change in fair value of derivative liabilities(20.4)%
Financing costs for derivative liabilities(0.4)%
Change in Valuation Allowance(0.2)%
Income Taxes Benefit0.0%

Note 11 —Quarterly Financial Information (Unaudited)

The following tables contain unaudited2020. Income from the Transition Services Agreement is included in other expenses, net in the consolidated quarterly financial informationstatements of operations for the threeyear ended December 31, 2020.


Promissory Notes

On March 31, 2019, Appgate issued Promissory Notes to each of the Company and ninethe Management Company evidencing certain funds borrowed by Appgate from each of the Company and the Management Company as well as potential future borrowings. The Promissory Notes had a combined initial aggregate principal amount of $95.2 million and provided for additional borrowings during the term of the Promissory Notes for additional amounts not to exceed approximately $52.5 million in the aggregate (approximately $147.7 million including the initial aggregate principal amount). Interest accrued on, the unpaid principal balance of the Promissory Notes at a rate per annum equal to 3%; provided, that with respect to any day during the period from the date of the Promissory Notes through December 31, 2019, interest was calculated assuming that the unpaid principal balance of the Promissory Notes on such day is the unpaid principal amount of the notes on the last calendar day of the quarter in which such day occurs. Interest was payable upon the maturity date of the notes. Each of the Promissory Notes had an initial maturity date of March 30, 2020, and was extended through March 30, 2021, by amendments entered into effective as of March 30, 2020.

During the year ended December 31, 2020, the Company advanced $19.4 million under the Promissory Notes to Appgate and recorded provision for loan losses in the same amount. Accordingly, as of December 31, 2020, the Company had a receivable related to the Promissory Notes of $147.1 million with a reserve of $30.0 million. The provision for loan losses is presented as recovery of notes receivable from affiliates in the consolidated statement of operations for the year ended December 31, 2020.

On February 8, 2021, the Company received $120.6 million from Appgate. Approximately $117.1 million and $1.1 million were designated as repayment of the full balance of the $154.3 million outstanding principal and accrued interest, respectively, on the Promissory Notes at that time. On the same date, the Company issued a payoff letter to Appgate extinguishing the remaining unpaid balance of the Promissory Notes. The remainder of the payment was designated as settlement of trade balances with Appgate and its subsidiaries and other amounts due to/from under the Transition Services Agreement described above. Accordingly, for the year ended December 31, 2020, the Company recorded a reversal of previously established allowance of $117.1 million. As a result, during the three months ended September 30,March 31, 2021, the Company wrote off the ending balance in the allowance for loan losses on the Promissory Notes. No other transactions related to the Promissory Notes were recorded during the year ended December 31, 2021.

101


CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

There was no activity in the allowance for loan losses on the Promissory Notes during the year ended December 31, 2022. The activity in the allowance for loan losses on the Promissory Notes during the years ended December 31, 2021 and 2020, that has been updatedwas as follows (in millions):

20212020
Beginning balance$30.0 $127.7 
Provision for loan losses— 19.4 
Reversal of allowance— (117.1)
Net reversal of allowance for loan losses— (97.7)
Write offs(30.0)— 
Ending balance$— $30.0 

Service provider management consulting fee and structuring fee

In connection with the 2017 colocation acquisition from Lumen, certain equity owners of SIS (collectively, the “Service Providers”) entered into a Services Agreement (the “Services Agreement”) dated May 1, 2017, with SIS and its subsidiaries and controlled affiliates as of such date (collectively, the “Company Group”). Under the Services Agreement, the Service Providers agreed to reflectprovide certain management, consulting and advisory services to the restatementbusiness combination and revisionaffairs of the Company Group from time to time. Pursuant to the Services Agreement, the Company Group also agreed to pay the Service Providers an annual service fee in the aggregate amount of $1.0 million in equal quarterly installments (the “Service Provider Fee”).

Fees owed under the Services Agreement related to a structuring fee, Service Provider Fee and other related expenses totaled $22.7 million as of December 31, 2020, and were included within due to affiliates in the consolidated balance sheet. Such fees were primarily incurred prior to 2020. All outstanding fees under the Services Agreement were repaid in February 2021.

Sponsor’s investment in the First Lien Term Facility

At December 31, 2020, until the date of the Business Combination, some of the controlled affiliates of BC Partners LLP (“BC Partners”), the largest equity owner of SIS, held investments in the Company’s First Lien Term Facility. The total investment represented less than 5% of the Company’s consolidated financial statements as describedtotal outstanding debt at December 31, 2020. As of December 31, 2022 and 2021, the controlled affiliates of BC Partners no longer held investments in Note 2—Restatementthe Company’s First Lien Term Facility.

Optional Share Purchase

On July 21, 2021, immediately prior to the consummation of Previously Issued Financial Statements. The restatementthe Business Combination, Legacy Cyxtera entered into the Optional Purchase Letter Agreement with the Forward Purchasers, pursuant to which the Forward Purchasers agreed to amend the Optional Share Purchase Agreement to limit the number of Optional Shares available for purchase by the Forward Purchasers in the six-month period following the Business Combination from 7.5 million shares to 3.75 million shares. In addition, on such date, the Forward Purchasers agreed to assign the rights to purchase up to 3.75 million shares under the Optional Share Purchase Agreement to SIS. In January 2022, SIS and revision had no impact on net cash flows from operating, investing or financing activities. the Forward Purchasers exercised their option to purchase 7.5 million Optional Shares at a price of $10.00 per share, for an aggregate purchase price of $75.0 million.

102


CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Relationships with certain members of the Company’s board of directors

The Company hasowed zero in board fees, which is included within accrued expenses in the consolidated balance sheets as of December 31, 2022 and 2021.

The chairman of the board of directors is one of the founders and the chairman of Emerge Americas, LLC, which operates a technology conference in Miami, Florida. As of December 31, 2022 and 2021, the Company did not amended its previously filed Quarterly Reportowe any significant amounts to Emerge Americas, LLC.

Since 2019 until the date of the Business Combination, one of the directors of the Company was also a member of the board of directors of Pico Quantitative Trading, LLC (“Pico”). Pico offers a comprehensive range of network products to meet the full spectrum of electronic trading requirements. During the period from January 1, 2021 through the date of the Business Combination, the Company billed and collected from Pico $0.2 million. During the year ended December 31, 2020, the Company billed and collected from Pico $0.6 million. As of December 31, 2022 and 2021, Pico was no longer a related party of the Company.

One director of the Company is also a member of the board of directors of Presidio Holdings, Inc. (“Presidio”), a provider of digital transformation solutions built on Form 10-Qagile secure infrastructure deployed in a multi-cloud world with business analytics. During the years ended December 31, 2022, 2021 and 2020, the Company paid $0.3 million to Presidio for services. As of December 31, 2022, 2021 and 2020, the Company did not owe any amounts to Presidio. Presidio is also a customer and referral partner of the Company. During each of the years ended December 31, 2022, 2021 and 2020, the Company billed and collected from Presidio $0.4 million, $0.3 million, and $0.2 million, respectively.

One of the former directors of the Company is also a member of the board of directors of Altice USA, Inc. (“Altice”), a vendor and a customer of the Company. The amount paid and due for the Affected Period.year ended December 31, 2022 and 2021 was inconsequential. The financial information that has been previously filed or otherwise reportedamount billed and collected for the Affected Period is superseded by the information in this Annual Report,year ended December 31, 2022 was $0.3 million and the financial statements$0.4 million, respectively. The amount billed and related financial informationcollected for the Affected Period containedyear ended December 31, 2021 was $0.3 million and $0.4 million, respectively. During the year ended, December 31, 2020, Altice was not a related party of the Company.

One of the former directors of the Company is also a member of the board of directors of Navex Global, Inc. (“Navex”), a vendor and customer of the Company. The amount paid and due to Navex for the year ended December 31, 2022 and 2021, was inconsequential. The amounts billed and collected from Navex for the year ended December 31, 2022 were $0.1 million (amount billed and collected during the year ended December 31, 2021 was inconsequential). During the year ended December 31, 2020, Navex was not a related party of the Company.
103


CYXTERA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Related party transactions and balances

The following table summarizes the Company’s transactions with related parties for each of the years ended December 31, 2022, 2021 and 2020 (in millions):

202220212020
Revenues (1)
$1.1 $1.5 $0.2 
Selling, general and administrative expenses (2)
0.4 1.0 0.3 
Recovery of notes receivable from affiliate (3)
— — (97.7)
Interest income (4)
— — 1.0 
Other (expense) income, net (5)
— (1.2)4.2 
(1)Revenues for the years ended December 31, 2022, 2021 and 2020 include amounts recognized from contracts with Appgate, Altice, Brainspace Corporation, Navex, and Presidio. Appgate is an affiliate of the Company and a direct subsidiary of SIS. Brainspace Corporation was an affiliate of the Company and an indirect subsidiary of SIS through January 20, 2021.
(2)Selling, general and administrative expenses include amounts incurred from contracts with Appgate and Presidio.
(3)Represents net recovery recognized in such previously filed report should no longer be relied upon.

  As of September 30, 2020 
  As Previously Reported  Restatement Adjustment  As Restated 
    
Balance Sheet            
Total assets $407,194,144  $-  $407,194,144 
Liabilities and stockholders’ equity            
Total current liabilities $263,065  $-  $263,065 
Deferred legal fees  250,000  $-   250,000 
Deferred underwriting commissions  18,190,554   -   18,190,554 
Derivative liabilities  -   26,272,850   26,272,850 
Total liabilities  18,703,619   26,272,850   44,976,469 
Class A common stock, $0.0001 par value; shares subject to possible redemption  383,490,520   (26,272,850)  357,217,670 
Stockholders’ equity            
Preferred stock - $0.0001 par value  -   -   - 
Class A common stock - $0.0001 par value  207   263   470 
Class B common stock - $0.0001 par value  1,011   -   1,011 
Additional paid-in-capital  5,175,852   5,835,947   11,011,799 
Accumulated deficit  (177,065)  (5,836,210)  (6,013,275)
Total stockholders’ equity  5,000,005   -   5,000,005 
Total liabilities and stockholders’ equity $407,194,144  $-  $407,194,144 

connection with amounts funded under the Promissory Notes.

(4)Represents interest income recognized under one of the Promissory Notes and under the Transaction Services Agreement for the years ended December 31, 2022, 2021 and 2020.
  Three Months Ended September 30, 2020 
  As Previously Reported  Restatement Adjustment  As Restated 
    
Unaudited Condensed Statement of Operations            
Loss from operations $(200,738) $-  $(200,738)
Other (expense) income:            
Change in fair value of derivative warrant liabilities  -   (5,281,780)  (5,281,780)
Financing costs  -   (554,430)  (554,430)
Net gain on investments held in Trust Account  27,226   -   27,226 
Total other (expense) income  27,226   (5,836,210)  (5,808,984)
Net loss $(173,512) $(5,836,210) $(6,009,722)
             
Basic and Diluted weighted-average Class A common stock outstanding  38,081,625       38,081,625 
Basic and Diluted net loss per Class A share $-      $- 
Basic and Diluted weighted-average Class B common stock outstanding  10,105,863       10,105,863 
Basic and Diluted net loss per Class B share $(0.02)     $(0.59)

  Nine Months Ended September 30, 2020 
  As Previously Reported  Restatement Adjustment  As Restated 
    
Unaudited Condensed Statement of Operations            
Loss from operations $(202,967) $-  $(202,967)
Other (expense) income:            
Change in fair value of warrant liabilities  -   (5,281,780)  (5,281,780)
Financing costs  -   (554,430)  (554,430)
Net gain on investments held in Trust Account  27,226   -   27,226 
Total other (expense) income  27,226   (5,836,210)  (5,808,984)
Net loss $(175,741) $(5,836,210) $(6,011,951)
             
Basic and Diluted weighted-average Class A common stock outstanding  38,081,625   -   38,081,625 
Basic and Diluted net loss per Class A share $-   -  $- 
Basic and Diluted weighted-average Class B common stock outstanding  10,105,863   -   10,105,863 
Basic and Diluted net loss per Class B share $(0.02)  -  $(0.35)

(5)Includes expenses incurred in connection with board fees and management fees paid for the years ended December 31, 2022, 2021 and 2020.

As of December 31, 2022 and 2021, the Company had the following balances arising from transactions with related parties (in millions):

20222021
Accounts receivable (1)
$0.1 $0.1 
Accounts payable (2)
— 0.6 
(1)Accounts receivable at December 31, 2022 and 2021, include trade receivables due from Appgate.
(2)Accounts payable at December 31, 2022 and 2021, include trade payables due to Appgate.

Note 12—22.     Subsequent Events

events


On February 21, 2021,19, 2023, the Company extended the first purchase period of the ESPP from February 28, 2023 to May 31, 2023. In addition, the Company amended the subsequent offering periods to commence on June 1 and December 1 of each year.
On March 14, 2023, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Mundo Merger Sub 1, Inc., a Delaware corporation and wholly-owned subsidiaryamendment to extend the maturity date of the Company (“Merger Sub 1”), Mundo Merger Sub2021 Revolving Facility, from its original expiration of November 1, 2023 to April 2, LLC, a Delaware limited liability company and wholly-owned subsidiary2024. Under the terms of the Company (“Merger Sub 2”), Cyxtera Technologies, Inc., a Delaware corporation (“Cyxtera”), and Mundo Holdings, Inc. (“NewCo”), a Delaware corporation and wholly-owned subsidiaryamendment, $120.1 million of SIS Holdings LP, a Delaware limited partnership (“Cyxtera Stockholder”), which providescommitments under the existing Revolving Facility were exchanged for among other things, (i) Cyxtera$102.1 million of commitments under the amended revolving facility. With the amendment, the interest rate changed to be contributed to Newco by the Cyxtera Stockholder, with Cyxtera becoming a wholly-owned subsidiary of Newco, (ii) Merger Sub 1 to be merged with and into NewCo (the “First Merger”), with NewCo surviving the First Merger as a wholly-owned subsidiary of the Company and Merger Sub 1 ceasing to exist, and (iii) immediately following the First Merger, NewCo to be merged with and into Merger Sub 2 (the “Second Merger”, and together with the First Merger and the other transactions contemplated by the Merger Agreement, the “Cyxtera Business Combination”), with Merger Sub 2 surviving the Second Merger as a wholly-owned subsidiary of the Company and NewCo ceasing to exist. As a result of the Cyxtera Business Combination, Cyxtera and the various operating subsidiaries of Cyxtera will become subsidiaries of the Company, with the Cyxtera Stockholder becoming a stockholder of the Company. Upon closing of the Cyxtera Business Combination, the Company will be renamed “Cyxtera Technologies, Inc.” As a consequence of the Cyxtera Business Combination, each issued and outstanding Founder Share will automatically convert into a share of Class A common stock on a one-for-one basis. The Cyxtera Business Combination is expected to close mid-2021, following the receipt of the required approval by the Company’s stockholders and the fulfillment of other customary closing conditions.

SOFR plus 400 basis points.


In connection with the Merger Agreement, the Cyxtera Stockholder entered into a Stockholder Support Agreement with the Company and Cyxtera (the “Stockholder Support Agreement”), pursuant to which, among other things, the Cyxtera Stockholder agreed to (i) provide its consent to the adoption of the Merger Agreement and the transactions contemplated by the Merger Agreement, including the mergers and the pre-closing restructuring, and (ii) take all actions necessary or appropriate to contribute its equity securities in Cyxtera to NewCo and otherwise cause the pre-closing restructuring to occur in accordance with the Merger Agreement. In addition, the Cyxtera Stockholder agreed not to transfer any equity securities of Cyxtera or NewCo until the date upon which the Stockholder Support Agreement expires, except as contemplated by the Stockholder Support Agreement. Further, the Sponsor and the other holders of the Founder Shares (together with the Sponsor, the “Insiders”) entered into a Sponsor Support Agreement with the Company and Cyxtera (the “Sponsor Support Agreement”), pursuant to which, among other things, each Insider agreed to (i) vote all Class A common stock and Class B common stock owned by it, him or her (all such common stock, the “Covered Shares”) in favor of the transactions contemplated by the Merger Agreement, including the mergers, and each other proposal related thereto included on the agenda for the special meeting of stockholders related thereto and (ii) not redeem, or seek to redeem, any Covered Shares owned by it, him or her in connection with the stockholder approval of the Cyxtera Business Combination. In addition, each Insider agreed, subject to certain exceptions, not to transfer, as applicable, any shares of Class B common stock, Private Placement Warrants (or shares of Class A common stock issued or issuable upon the exercise of Private Placement Warrants) or other equity securities of SVAC until the date upon which the Sponsor Support Agreement expires. Solely in connection with and only for the purpose of the transactions contemplated by the Merger Agreement, each Insider irrevocably and unconditionally waived and agreed not to assert, claim or perfect any rights to adjustment or other anti-dilution protection with respect to the rate that the shares of Class B common stock held by him, her or it converts into Class A common stock pursuant to Section 4.3 of the Company’s Certificate of Incorporation or any other anti-dilution protections or other adjustment or similar protections that arise in connection with the Cyxtera Business Combination.

In addition, Cyxtera and the forward purchasers entered into a letter agreement related to the optional share purchase agreement, pursuant to which letter agreement the forward purchasers agreed not to purchase optional shares in an aggregate amount exceeding $75,000,000 for all forward purchasers.

In connection with the Merger Agreement, the Company also entered into separate subscription agreements, dated February 21, 2021, with certain investors, pursuant to which the Company has agreed to issue and sell, in private placements to close immediately prior to the closing of the Cyxtera Business Combination, an aggregate of 25,000,000 shares of Class A common stock for a purchase price of $10.00 per share and an aggregate purchase price of $250,000,000, of which certain clients of Starboard Value LP

We have committed to purchase, on the same terms as the other subscribers, an aggregate of 6,000,000 shares of Class A common stock, for a purchase price of $10.00 per share and an aggregate purchase price of $60,000,000.

The Company evaluated all subsequent events and transactions that occurred after the balance sheet date up tothrough the date that the consolidated financial statements were available to be issued and determined that, other than as described above,amendments of the ESPP and 2021 Revolving Facility, there have been no other events or transactions which would have a material effect on the consolidated financial statements and therefore would require recognition or disclosure.

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Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Annual Report on Form 10-K (this “Annual Report”), our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). We maintain disclosure controls and procedures designed so that information required to be disclosed in reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported within time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on management’s evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2022.

Management Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting for our Company. Our control system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with US GAAP Our internal control over financial reporting includes those policies and procedures that:

pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of our assets;
provide reasonable assurance that the transactions are recorded as necessary to permit preparation of financial statements in accordance with US GAAP and that receipts and expenditures are being made only with proper authorizations of management and directors; and
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of company assets that could have a material effect on the financial statements.

Because of inherent limitations, internal control over financial reporting may not prevent or detect all misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management, including our principal executive officer and principal financial officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework (2013). Based on our assessment and those criteria, our management concluded that our internal control over financial reporting was effective as of December 31, 2022.
105




This Annual Report does not include an attestation report of our independent registered accounting firm due to a transition period established by the rules of the SEC for newly public companies.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the year ended December 31, 2022 that have occurredmaterially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that would require adjustments toPrevent Inspections.

Not applicable.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by Item 10 of this Annual Report will be included in our 2023 Proxy Statement, which information is incorporated herein by reference.


Item 11. Executive Compensation.

The information required by Item 11 of this Annual Report will be included in our 2023 Proxy Statement, which information is incorporated herein by reference.


Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by Item 12 of this Annual Report will be included in our 2023 Proxy Statement, which information is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The information required by Item 13 of this Annual Report will be included in our 2023 Proxy Statement, which information is incorporated herein by reference.

Item 14. Principal Accounting Fees and Services.

The information required by Item 14 of this Annual Report will be included in our 2023 Proxy Statement, which information is incorporated herein by reference.


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PART IV

Item 15. Exhibits and Financial Statement Schedules.

(a)(1) Financial Statements.

The financial statements required by this item are listed in Item 8, “Financial Statements and Supplementary Data” herein.

(a)(2) Financial Statement Schedules.

All financial statement schedules have been omitted because they are not applicable, not required or the disclosuresinformation required is shown in the financial statements.

statements or the notes thereto.


SIGNATURES

(a)(3) Exhibits.

The following is a list of exhibits filed as part of this Annual Report.

NumberDescription
2.1
3.1
3.2
4.1
4.2*
10.1#
10.2#
10.3#
10.4#
10.5#
107



10.6#
10.7#
10.8#
10.9#
10.10#
10.11#
10.12#
10.13
10.14
10.15*
10.16
21.1*
23.1*
24.1*Powers of Attorney (included on Signature Page of this Annual Report on Form 10-K)
31.1*
31.2*
32.1**
32.2**
101.DEF*XBRL Instance Document
101.PRE*Inline XBRL Taxonomy Extension Presentation Document
101.LAB*Inline XBRL Taxonomy Extension Labels Document
101.CAL*Inline XBRL Taxonomy Extension Calculation Document
108



101.SCH*Inline XBRL Taxonomy Extension Schema Document
101.INS*XBRL Instance Document
104*Cover Page Interactive Data File—the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

*    Filed herewith.
**    Furnished herewith.
#    Represents management contract or compensatory plan or arrangement.

We will furnish to any security holder, upon written request, copies of any exhibit incorporated by reference, for a fee of 15 cents per page, to cover the costs of furnishing the exhibits. Written requests should include a representation that the person making the request is the beneficial owner of securities entitled to vote at our Annual Meeting of Shareholders.


Item 16. Form 10–K Summary.

None.

109




Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrantregistrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


CYXTERA TECHNOLOGIES, INC.


Date: March 16, 2023
Dated: May 12, 2021
Starboard Value Acquisition Corp./s/ Carlos Sagasta
Carlos Sagasta
By:/s/ Martin D. McNulty, Jr.
Name: Martin D. McNulty, Jr.
Title: Chief Executive Officer
(Principal Executive Officer)
By:/s/ Kenneth R. Marlin
Name: Kenneth R. Marlin
Title: Chief Financial Officer
(Principal Financial Officer and Accounting Officer)Authorized Signatory)


POWER OF ATTORNEY

Each person whose individual signature appears below hereby authorizes and appoints Nelson Fonseca, Carlos Sagasta and Victor Semah, and each of them, with full power of substitution and resubstitution and full power to act without the other, as his or her true and lawful attorney-in-fact and agent to act in his or her name, place and stead and to execute in the name and on behalf of each person, individually and in each capacity stated below, and to file any and all amendments to this annual report on Form 10-K and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing, ratifying and confirming all that said attorneys-in-fact and agents or any of them or their or his or her substitute or substitutes may lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

NamePositionDate
SignatureTitleDate
/s/ Martin D. McNulty, Jr.Nelson FonsecaChief Executive Officer and DirectorMay 12, 2021
Martin D. McNulty, Jr.
(Principal Executive Officer
)Officer)
March 16, 2023
Nelson Fonseca
/s/ Kenneth R. MarlinCarlos SagastaChief Financial OfficerMay 12, 2021
Kenneth R. Marlin
(Principal Financial and Accounting Officer)
March 16, 2023
Carlos Sagasta
/s/ Edmundo MirandaChief Accounting Officer
(Principal Accounting Officer)
March 16, 2023
Edmundo Miranda

110



SignatureTitleDate
/s/ Fahim AhmedDirectorMarch 16, 2023
Fahim Ahmed
/s/ John W. DiercksenDirectorMarch 16, 2023
John W. Diercksen
/s/ Michelle FelmanDirectorMarch 16, 2023
Michelle Felman
/s/ Melissa HathawayDirectorMarch 16, 2023
Melissa Hathaway
/s/ Manuel D. MedinaDirectorMarch 16, 2023
Manuel D. Medina
/s/ Benjamin PhillipsDirectorMarch 16, 2023
Benjamin Phillips
/s/ Jeffrey C. SmithDirectorChair of the BoardMay 12, 2021March 16, 2023
Jeffrey C. Smith
/s/ Pauline J. BrownGregory WatersDirectorDirectorMay 12, 2021March 16, 2023
Pauline J. BrownGregory Waters
/s/ Michelle FelmanDirectorMay 12, 2021
Michelle Felman
/s/ Robert L. GreeneDirectorMay 12, 2021
Robert L. Greene
/s/ Lowell W. RobinsonDirectorMay 12, 2021
Lowell W. Robinson

111