2021 Name of each exchange on which ☒ March 31, 2020 December 31, 2019 Three Months Ended March 31, Class A Ordinary Shares Class B Ordinary Shares Total Shareholders’ Act II Global Acquisition Corp. acquired parties and, collectively, the accounting predecessor. The Company’s Basis of Presentation—The accompanying unaudited consolidation. Estimates Combined Financial Statements $1.0 million, which is recorded in accrued expenses and other current liabilities in the unaudited condensed consolidated balance sheets. Three Months Ended March 31, Combined Financial Statements March 31, 2020 December 31, 2019 becomes available in the future. Controls and Procedures Unregistered Sales of Equity Securities and Use of Proceeds. Defaults Upon Senior Securities. Mine Safety Disclosures. Other Information. Exhibits.☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 2020☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Act II Global Acquisition Corp.Whole Earth Brands, Inc. (Exact name of registrant as specified in its charter) Cayman Islands34-4101973745 5th AvenueNew York, New York 1015160606 (Address of Principal Executive Offices, including zip code)Offices)(Zip Code) (212) 335-4500(312) 840-6000 (Registrant’s telephone number, including area code) N/A(Former name, former address and former fiscal year, if changed since last report)Title of each class Trading Symbol(s)
registeredUnits, each consisting of one Class A Ordinary Share and one-half of one Redeemable WarrantCommon stock, par value $0.0001 per shareACTTUFREEThe NASDAQ Stock Market LLC Class A Ordinary Shares, par value $0.0001 perWarrants to purchase one-half of one share of common stockACTTFREEWThe NASDAQ Stock Market LLC Warrants, each exercisable for one Class A Ordinary Share for $11.50 per shareACTTWThe NASDAQ Stock Market LLC☐ Large accelerated filer ☐ Accelerated filer ☒ ☒ Non-accelerated filer☒ ☐Smaller reporting company ☐ ☒ Emerging growth company ☒ ☒☐ No ☐15, 2020,11, 2021, there were 30,000,000 Class A ordinary38,426,669 shares $0.0001of the registrant’s common stock, par value per share, and 7,500,000 Class B ordinary shares, $0.0001 par value per share, issued and outstanding.ACT II GLOBAL ACQUISITION CORP.SIGNATURESCondensed Consolidated and Combined Financial StatementsiACT II GLOBAL ACQUISITION CORP.CONDENSED BALANCE SHEETS (unaudited) ASSETS Current assets Cash $ 583,196 $ 1,005,831 Prepaid expenses 103,668 65,714 Total Current Assets 686,864 1,071,545 Security deposit 38,000 38,000 Right of use asset 266,640 — Marketable securities held in Trust Account 305,037,224 304,283,025 Total Assets $ 306,028,728 $ 305,392,570 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities Accounts payable and accrued expenses $ 195,161 $ 19,781 Operating lease liability 217,013 — Total Current Liabilities 412,174 19,781 Operating lease liability, net of current portion 64,505 — Deferred underwriting fees payable 11,280,000 11,280,000 Total Liabilities 11,756,679 11,299,781 Commitments (Note 7) Ordinary shares subject to possible redemption, 28,449,516 and 28,502,357 shares at redemption value as of March 31, 2020 and December 31, 2019, respectively 289,272,046 289,092,780 Shareholders’ Equity Preference shares, $0.0001 par value; 2,000,000 shares authorized, none issued and outstanding — — Class A ordinary shares, $0.0001 par value; 200,000,000 shares authorized; 1,550,484 and 1,497,643 shares issued and outstanding (excluding 28,449,516 and 28,502,357 shares subject to possible redemption) as of March 31, 2020 and December 31, 2019, respectively 155 150 Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 7,500,000 shares issued and outstanding as of March 31, 2020 and December 31, 2019 750 750 Additional paid in capital 887,694 1,066,965 Retained earnings 4,111,404 3,932,144 Total Shareholders’ Equity 5,000,003 5,000,009 Total Liabilities and Shareholders’ Equity $ 306,028,728 $ 305,392,570 The accompanying notes are an integral part of the unaudited condensed financial statements.ACT II GLOBAL ACQUISITION CORP.CONDENSED STATEMENTSTABLE OF OPERATIONS(Unaudited) 2020 2019 Operating costs $ 574,939 $ 15,517 Loss from operations (574,939 ) (15,517 ) Other income: Interest income 754,199 — Net Income (Loss) $ 179,260 $ (15,517 ) Weighted average shares outstanding, basic and diluted(1) 8,997,643 6,525,000 Basic and diluted net loss per ordinary share(2) $ (0.06 ) $ (0.00 ) Whole Earth Brands, Inc. Condensed Consolidated Balance Sheets (In thousands of dollars, except for share and per share data) (Unaudited) March 31, 2021 December 31, 2020 Assets Current Assets Cash and cash equivalents $ 27,806 $ 16,898 Accounts receivable (net of allowances of $723 and $955, respectively) 72,205 56,423 Inventories 191,837 111,699 Prepaid expenses and other current assets 11,807 5,045 Total current assets 303,655 190,065 Property, Plant and Equipment, net 49,752 47,285 Other Assets Operating lease right-of-use assets 18,749 12,193 Goodwill 236,895 153,537 Other intangible assets, net 283,845 184,527 Deferred tax assets, net 2,479 2,671 Other assets 6,926 6,260 Total Assets $ 902,301 $ 596,538 Liabilities and Stockholders’ Equity Current Liabilities Accounts payable $ 36,915 $ 25,200 Accrued expenses and other current liabilities 34,616 29,029 Contingent consideration payable 52,672 0 Current portion of operating lease liabilities 5,074 3,623 Current portion of long-term debt 3,750 7,000 Total current liabilities 133,027 64,852 Non-Current Liabilities Long-term debt 385,257 172,662 Warrant liabilities 7,999 0 Deferred tax liabilities, net 52,722 23,297 Operating lease liabilities, less current portion 16,281 11,324 Other liabilities 16,230 15,557 Total Liabilities 611,516 287,692 0 0 Stockholders’ Equity Preferred shares, $0.0001 par value; 1,000,000 shares authorized; 0ne issued and outstanding at March 31, 2021 and December 31, 2020 0 0 Common stock, $0.0001 par value; 220,000,000 shares authorized; 38,426,669 shares issued and outstanding at March 31, 2021 and December 31, 2020 4 4 Additional paid-in capital 322,758 325,679 Accumulated deficit (38,544) (25,442) Accumulated other comprehensive income 6,567 8,605 Total stockholders’ equity 290,785 308,846 Total Liabilities and Stockholders’ Equity $ 902,301 $ 596,538 Whole Earth Brands, Inc. Condensed Consolidated and Combined Statements of Operations (In thousands of dollars, except for share and per share data) (Unaudited) (Successor) (Predecessor) Three Months Ended
March 31, 2021Three Months Ended
March 31, 2020Product revenues, net $ 105,825 $ 65,972 Cost of goods sold 70,174 40,112 Gross profit 35,651 25,860 Selling, general and administrative expenses 32,907 16,048 Amortization of intangible assets 4,151 2,534 Asset impairment charges 0 40,600 Restructuring and other expenses 1,657 0 Operating loss (3,064) (33,322) Change in fair value of warrant liabilities (2,362) 0 Interest expense, net (5,078) (172) Loss on extinguishment and debt transaction costs (5,513) 0 Other income, net 310 1,721 Loss before income taxes (15,707) (31,773) Benefit for income taxes (3,682) (3,118) Net loss $ (12,025) $ (28,655) Net loss per share – Basic and diluted $ (0.31) 0 Whole Earth Brands, Inc. Condensed Consolidated and Combined Statements of Comprehensive Income (Loss) (In thousands of dollars) (Unaudited) (Successor) (Predecessor) Three Months Ended
March 31, 2021Three Months Ended March 31, 2020 Net loss $ (12,025) $ (28,655) Other comprehensive income (loss), net of tax: Net change in pension benefit obligations recognized 9 48 Foreign currency translation adjustments (2,047) (1,884) Total other comprehensive loss, net of tax (2,038) (1,836) Comprehensive loss $ (14,063) $ (30,491) (1)Excludes an aggregateWhole Earth Brands, Inc. Condensed Consolidated and Combined Statements of 28,449,516 shares subjectEquity(In thousands of dollars) (Unaudited) (Predecessor) Total Equity Balance at December 31, 2019 $ 487,750 Funding to possible redemptionParent, net(12,262) Net loss (28,655) Other comprehensive loss, net of tax (1,836) Balance at March 31, 2020. At March 31, 2019, excluded an aggregate of 978,750 shares that were subject to forfeiture to the extent that the underwriters’ over-allotment option was not exercised in full (see Note 9).2020$ 444,997 (2)Net loss per ordinary share – basic and diluted excludes income attributable to ordinary shares subject to possible redemption of $715,207 for the three months ended March 31, 2020 (see Note 3).Common Stock Preferred Stock Additional
Paid-inAccumulated Accumulated
Other
ComprehensiveTotal
Stockholders’Shares Amount Shares Amount Capital Deficit Income Equity Balance at December 31, 2020 38,426,669 $ 4 0 $ 0 $ 325,679 $ (25,442) $ 8,605 $ 308,846 Reclassification of Private Warrants (Note 1) — — — — (7,062) (1,077) — (8,139) Transfer of Private Warrants to Public Warrants (Note 7) — — — — 2,502 — — 2,502 Net loss — — — — — (12,025) — (12,025) Other comprehensive loss, net of tax — — — — — — (2,038) (2,038) Stock-based compensation — — — — 1,639 — — 1,639 Balance at March 31, 2021 38,426,669 $ 4 0 $ 0 $ 322,758 $ (38,544) $ 6,567 $ 290,785 Whole Earth Brands, Inc. Condensed Consolidated and Combined Statements of Cash Flows (In thousands of dollars) (Unaudited) (Successor) (Predecessor) Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Operating activities Net loss $ (12,025) $ (28,655) Adjustments to reconcile net loss to net cash provided by operating activities: Stock-based compensation 1,639 0 Depreciation 969 679 Amortization of intangible assets 4,151 2,534 Deferred income taxes 3,402 (648) Asset impairment charges 0 40,600 Pension (115) 0 Amortization of inventory fair value adjustments 1,619 0 Non-cash loss on extinguishment of debt 4,435 0 Change in fair value of warrant liabilities 2,362 0 Changes in current assets and liabilities: Accounts receivable (1,341) 312 Inventories (4,903) 3,959 Prepaid expenses and other current assets 665 (949) Accounts payable, accrued liabilities and income taxes (7,052) (431) Other, net 597 (2,791) Net cash (used in) provided by operating activities (5,597) 14,610 Investing activities Capital expenditures (1,544) (894) Acquisitions, net of cash acquired (186,601) 0 Net cash used in investing activities (188,145) (894) Financing activities Proceeds from revolving credit facility 25,000 3,500 Repayments of revolving credit facility (47,855) (5,000) Long-term borrowings 375,000 0 Repayments of long-term borrowings (136,500) 0 Debt issuance costs (11,589) 0 Funding to Parent, net 0 (12,430) Net cash provided by (used in) financing activities 204,056 (13,930) Effect of exchange rate changes on cash and cash equivalents 594 314 Net change in cash and cash equivalents 10,908 100 Cash and cash equivalents, beginning of period 16,898 10,395 Cash and cash equivalents, end of period $ 27,806 $ 10,495 Supplemental disclosure of cash flow information Interest paid $ 4,491 $ 0 Taxes paid, net of refunds $ 3,535 $ 1,070 accompanying notes are an integral partCompany has a global platform of branded products and ingredients, focused on the unaudited condensed financial statements.consumer transition towards natural alternatives and clean label products.ACT II GLOBAL ACQUISITION CORP.CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY(Unaudited)THREE MONTHS ENDED MARCH 31,On June 24, 2020, Additional Paid Retained Shares Amount Shares Amount in Capital Earnings Equity Balance – January 1, 2020 1,497,643 $ 150 7,500,000 $ 750 $ 1,066,965 $ 3,932,144 $ 5,000,009 Change in value of ordinary shares subject to possible redemption 52,841 5 — — (179,271 ) — (179,266 ) Net income — — — — — 179,260 179,260 Balance – March 31, 2020 1,550,484 $ 155 7,500,000 $ 750 $ 887,694 $ 4,111,404 $ 5,000,003 THREE MONTHS ENDED MARCH 31, 2019 Ordinary Shares Additional Paid Accumulated Total Shareholder’s Shares Amount in Capital Deficit Equity Balance – January 1, 2019 — $ — $ — $ — $ — Issuance of Class B ordinary shares to Sponsor(1) 7,503,750 750 24,250 — 25,000 Net loss — — — (15,517 ) (15,517 ) Balance – March 31, 2019 7,503,750 $ 750 $ 24,250 $ (15,517 ) $ 9,483 (1)Included an aggregate of up to 978,750 shares that were subject to forfeiture to the extent that the underwriters’ over-allotment option was not exercised in full (see Note 9).The accompanying notes are an integral part of the unaudited condensed financial statements.ACT II GLOBAL ACQUISITION CORP.CONDENSED STATEMENTS OF CASH FLOWS(Unaudited) Three Months Ended
March 31, 2020 2019 Cash Flows from Operating Activities: Net income (loss) $ 179,260 $ (15,517 ) Adjustments to reconcile net income (loss) to net cash used in operating activities: Interest earned on marketable securities held in Trust Account (754,199 ) — Amortization of right of use asset 33,878 — Changes in operating assets and liabilities: Prepaid expenses (56,954 ) — Accrued expenses 175,380 — Net cash used in operating activities (422,635 ) (15,517 ) Cash Flows from Financing Activities: Proceeds from issuance of Class B ordinary shares to Sponsor — 25,000 Proceeds from promissory note - related party — 150,803 Payment of offering costs — (127,277 ) Net cash provided by financing activities — 48,526 Net Change in Cash (422,635 ) 33,009 Cash – Beginning 1,005,831 — Cash – Ending $ 583,196 $ 33,009 Non-Cash Investing and Financing Activities: Change in value of ordinary shares subject to possible redemption $ 179,266 $ — Right of use asset acquired through lease liability $ 297,723 $ — The accompanying notes are an integral part of the unaudited condensed financial statements.ACT II GLOBAL ACQUISITION CORP.NOTES TO CONDENSED FINANCIAL STATEMENTSMARCH 31, 2020(Unaudited)NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (the “Company”) is a blank check company incorporated as, a Cayman Islands exempted company (“Act II”), domesticated into a Delaware corporation (the “Domestication”), and on August 16, 2018. The Company was incorporated forJune 25, 2020 (the “Closing”), consummated the purpose of effecting a merger, share exchange, assetindirect acquisition share purchase, reorganization or similar business combination with one or more businesses (a(the “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”).The Company is not limited to a particular industry or sector for purposes of consummating a Business Combination. The Company is an early stage and emerging growth company and, as such, the Company is subject to(i) all of the risks associatedissued and outstanding equity interests of Merisant Company (“Merisant”), Merisant Luxembourg Sarl (“Merisant Luxembourg”), Mafco Worldwide LLC (“Mafco Worldwide”), Mafco Shanghai LLC (“Mafco Shanghai”), EVD Holdings LLC (“EVD Holdings”), and Mafco Deutschland GmbH (together with early stageMerisant, Merisant Luxembourg, Mafco Worldwide, Mafco Shanghai, and emerging growth companies.All activity forEVD Holdings, and their respective direct and indirect subsidiaries, “Merisant and Mafco Worldwide”), and (ii) certain assets and liabilities of Merisant and Mafco Worldwide included in the periodTransferred Assets and Liabilities (as defined in the Purchase Agreement (as hereafter defined)), from January 1,Flavors Holdings Inc. (“Flavors Holdings”), MW Holdings I LLC (“MW Holdings I”), MW Holdings III LLC (“MW Holdings III”), and Mafco Foreign Holdings, Inc. (“Mafco Foreign Holdings,” and together with Flavors Holdings, MW Holdings I, and MW Holdings III, the “Sellers”), pursuant to that certain Purchase Agreement (the “Purchase Agreement”) entered into by and among Act II and the Sellers dated as of December 19, 2019, (commencement of operations) through March 31, 2020 relates to the Company’s formation, the initial public offering (“Initial Public Offering”), which is described below, the Company’s search for a target business with which to complete a Business Combination and activities inas amended. In connection with the pending acquisition (see Note 8).The registration statements forDomestication, Act II changed its name to “Whole Earth Brands, Inc.”Company’s Initial Public Offering were declared effectivecompletion of the Domestication, each of Act II’s then-issued and outstanding ordinary shares converted, on April 25, 2019. On April 30, 2019,a 1-for-one basis, into shares of common stock of Whole Earth Brands. In conjunction with the Business Combination, the Company consummated the Initial Public Offeringissued an aggregate of 30,000,000 units, inclusive7,500,000 shares of 3,900,000 units sold to the underwriters upon the election to partially exercise their over-allotment option (the “Units”Whole Earth Brands common stock and with respect to the ordinary shares included in the Units sold, the “public shares”) at $10.00 per Unit, generating gross proceeds of $300,000,000, which is described in Note 4. Each Unit consists of one of the Company’s Class A ordinary shares, par value $0.0001 per share (the “Class A Shares”), and one-half of one warrant (the “Warrants”). Each whole warrant entitles the holder to purchase one Class A Share.Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 6,750,0005,263,500 private placement warrants (the “Private Placement Warrants”) atexercisable for 2,631,750 shares of Whole Earth Brands common stock to certain investors. On the date of Closing, the Company’s common stock and warrants began trading on The Nasdaq Stock Market under the symbols “FREE” and “FREEW,” respectively.price of $1.00 per Private Placement Warrant in a private placement to Act II Global Sponsor LLC (the “Sponsor”), generating gross proceeds of $6,750,000, which is described in Note 5.Transaction costs amounted to $16,614,355, consisting of $5,220,000 of underwriting fees, $11,280,000 of deferred underwriting fees and $114,355 of other offering costs. The underwriters reimbursed the Company $470,000 at the closing of the Initial Public Offering for certain offering expenses, of which such amount was offset against other offering expenses and recorded as a credit to additional paid in capital. In addition, at March 31, 2020, cash of $583,196 was held outside of the Trust Account (as defined below) and is available for working capital purposes.Following the closing of the Initial Public Offering on April 30, 2019, an amount of $300,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”), which have been invested 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 180 days or less or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummationresult of the Business Combination, or (ii)for accounting purposes, Act II was deemed to be the Company’s failureacquirer and Mafco Worldwide and Merisant Company were deemed to consummate a Business Combination withinbe the prescribed time.management has broad discretion with respectfinancial statement presentation includes the combined financial statements of Mafco Worldwide and Merisant Company as the “Predecessor” for periods prior to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to successfully effect a Business Combination. Placing funds in the Trust Account may not protect those funds from third party claims against the Company. Although the Company will seek to have all vendors, service providers, prospective target businesses or other entities it engages execute agreements with the Company waiving any claim of any kind in or to any monies held in the Trust Account, there is no guarantee that such persons will execute such agreements. The Sponsor has agreed that it will be liable to the Company under certain circumstances if and to the extent any claims by such persons reduce the amount of funds in the Trust Account below a specified threshold. The Company has not independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations. Therefore, the Sponsor may not be able to satisfy those obligations should they arise. The remaining net proceeds (not held in the Trust Account) may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses as well as any taxes.ACT II GLOBAL ACQUISITION CORP.NOTES TO CONDENSED FINANCIAL STATEMENTSMARCH 31, 2020(Unaudited)The Company will provide the holders of the public shares (the “Public Shareholders”) with the opportunity to redeem all or a portion of their public shares upon the completion of the Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer, in either case 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 the Business Combination, including interest (which interest shall be net of taxes payable) divided by the number of then outstanding public shares. Notwithstanding the foregoing, if the Company seeks shareholder approval of the Business Combination and the Company does not conduct redemptions pursuant to the tender offer rules, a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the public shares. In connection with any shareholder vote required to approve any Business Combination, the Sponsor and any other shareholder of the Company prior to the consummation of the Initial Public Offering (collectively with the Sponsor, the “Initial Shareholders”) and the Company’s directors and officers will agree (i) to vote any of their respective Ordinary Shares (as defined below) in favor of the initial Business Combination and (ii) not to redeem any of their Ordinary Shares in connection therewith.The Company will proceed with a Business Combination only if it has net tangible assets of at least $5,000,001 upon consummation of the Business Combination and, in the case of a shareholder vote, a majority of the outstanding Ordinary Shares voted are voted in favor of the Business Combination.The NASDAQ rules require that the Business Combination must be with one or more target businesses that together have an aggregate fair market value equal to at least 80% of the balance in the Trust Account (less any deferred underwriting fees as discussed below, and taxes payable on interest earned) at the time of the Company signing a definitive agreement in connection with the Business Combination.If the Company has not completed a Business Combination by April 30, 2021, 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 (which interest shall be net of taxes payable, and 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 rights of the Public Shareholders as shareholders (including the right to receive further liquidation 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 shareholdersincludes Whole Earth Brands, Inc. and its Board of Directors, dissolve and liquidate, subject in each casesubsidiaries for periods after the Closing (referred to as the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. In the event of a liquidation, the Public Shareholders will be entitled to receive a full pro rata interest in the Trust Account (initially anticipated to be approximately $10.00 per share, plus any pro rata interest earned on the Trust Fund not previously released to the Company and less up to $100,000 of interest to pay dissolution expenses)“Successor”). There will be no redemption rights or liquidating distributions with respect to the Founder Shares (as defined in Note 9) or the Private Placement Warrants, which will expire worthless if the Company fails to complete a Business Combination by April 30, 2021.NOTE 2. LIQUIDITY AND GOING CONCERNAs of March 31, 2020, the Company had $583,196 in cash, $305,037,224 in securities held in the Trust Account to be used for a Business Combination or to repurchase or redeem its ordinary shares in connection therewith and working capital of $274,690.Until the consummation of a Business Combination, the Company will be using the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to acquire, and structuring, negotiating and consummating the Business Combination.The Company will need to raise additional capital through loans or additional investments from its Sponsor, officers, directors, or third parties. The Company’s officers, directors and Sponsor may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern through April 30, 2021, the date that the Company will be required to cease all operations, except for the purpose of winding up, if a Business Combination is not consummated. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.ACT II GLOBAL ACQUISITION CORP.NOTES TO CONDENSED FINANCIAL STATEMENTSMARCH 31, 2020(Unaudited)NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESpresentationcondensedconsolidated and combined interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance withreporting. The balance sheet data as of December 31, 2020 was derived from the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Certain information or footnote disclosures normally included inaudited consolidated financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanyingstatements. These unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating resultsconsolidated and cash flows for the periods presented.The accompanying unaudited condensedcombined interim financial statements should be read in conjunction with the Company’s Annual Report on Form 10-Kaudited consolidated and combined financial statements for the year ended December 31, 2019 as filed with the SEC on March 30, 2020 which contains the audited financial statements and notes thereto. The financial information as of December 31, 2019 is derived from the audited financial statements presentedincluded in the Company’s Annual Report on Form 10-K for10-K.year ended December 31, 2019. The interim results foropinion of management, the three months endedfinancial statements contain all adjustments necessary to state fairly the financial position of the Company as of March 31, 20202021 and the results of operations and cash flows for all periods presented. All adjustments reflected in the accompanying unaudited consolidated and combined financial statements, which management believes are necessary to state fairly the financial position, results of operations and cash flows, have been reflected and are of a normal recurring nature. Results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Certain prior year ending December 31, 2020 or for any future interim periods.Emerging growth companySection 102(b)(1)amounts have been reclassified to conform to the current year presentation.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. Consolidation—The JOBS Act provides that a company can elect to opt out of the extended transition periodconsolidated and comply with the requirements that apply to non-emerging growth companies but any such 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 condensedcombined financial statements with another public company, which is neither an emerging growth company nor an emerging growth company, which has opted outinclude the accounts of using the extended transition period difficult or impossible because of the potential differencesWhole Earth Brands, Inc., and its indirect and wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in accounting standards used.estimates the condensed financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported amounts of assets and liabilities and disclosure of contingent assets and liabilities atin the date of the condensedunaudited consolidated financial statements and the reported amounts of 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 existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future events. Accordingly, the actualaccompanying notes. Actual results could differ significantly from thosethese estimates.Cashcash equivalentsconsiders all short-term investmentsqualifies as an emerging growth company (an “EGC”) and as such, has elected the extended transition period for complying with certain new or revised accounting pronouncements. During the extended transition period, the Company is not subject to certain new or revised accounting standards applicable to public companies. The accounting pronouncements pending adoption below reflect effective dates for the Company as an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as ofEGC with the extended transition period.31, 2020 and December 31, 2019.Marketable securities held in Trust AccountAt March 31, 2020,2017, the assets held in the Trust Account were substantially held in money market funds, which are invested in U.S. Treasury securities. At December 31, 2019, the assets held in the Trust Account were substantially held in U.S. Treasury Bills.ACT II GLOBAL ACQUISITION CORP.NOTES TO CONDENSED FINANCIAL STATEMENTSMARCH 31, 2020(Unaudited)Lease AgreementIn February 2016, the FASBFinancial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases2017-7, “Compensation - Retirement Benefits (Topic 842), followed in July 2018 by ASU 2018-10, Codification Improvements to Topic 842 Leases, and ASU 2018-11, Leases (Topic 842): Targeted Improvements.715).” Under the new transition method,guidance, employers are required to present the service cost component of net periodic benefit cost in the same statement of operations caption as other employee compensation costs arising from services rendered during the period. Employers are required to present the other components of the net periodic benefit cost separately from the caption that includes the service costs and outside of any subtotal of operating profit and are required to disclose the caption used to present the other components of net periodic benefit cost, if not presented separately on the statement of operations. The Company adopted ASU 2017-7 effective in the second quarter of 2020. The adoption of this standard did not have an entity initially applieseffect on the Company’s historically reported net income (loss) but resulted in a presentation reclassification which increased the Company’s historically reported operating profit by $0.1 million for the three months ended March 31, 2020.leasesguidance provides optional expedients and exceptions to applying contract modification accounting under existing U.S. GAAP, to address the expected phase out of the London Inter-bank Offered Rate (“LIBOR”) by the end of 2021. The amendments in ASU 2020-4 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 new standard was effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2022. The Company is currently evaluating the impact of adopting this standard but does not expect it to have a material impact on its consolidated financial statements.adoption dateprevious incurred losses model primarily in that the loss recognition threshold of “probable” has been eliminated and recognizesthat expected loss should consider reasonable and supportable forecasts in addition to the previously considered past events and current conditions. Additionally, the guidance requires additional disclosures related to the further disaggregation of information related to the credit quality of financial assets by year of the asset’s origination for as many as five years. Entities must apply the standard provision as a cumulative-effect adjustment to the opening balance of retained earnings as of the beginning of the first reporting period in which the guidance is effective. This standard is effective for the Company as an EGC for fiscal years beginning after December 15, 2022 including interim periods within those fiscal years. The Company is currently evaluating the impact of adopting ASU 2016-13 on its consolidated financial statements.periodthree months ended March 31, 2021. Additionally, at both March 31, 2021 and December 31, 2020 the Company has accrued severance expense related to the restructuring plans of adoption. The guidance was effective for all public business entities.determines ifaccounts for the Private Warrants in accordance with Accounting Standards Codification “ASC” Topic 815, “Derivatives and Hedging”. Under the guidance contained in ASC Topic 815-40, the Private Warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the Private Warrants as liabilities at their fair value and adjusts the warrants to fair value at each reporting period. The liability is subject to re-measurement at each balance sheet date, and any change in fair value is recognized in the Company’s statement of operations. The Private Warrants are valued using a Black-Scholes option pricing model.Base cash consideration $ 387,500 Closing adjustment (764) Total Purchase Price $ 386,736 Cash and cash equivalents $ 10,062 Accounts receivable 45,769 Inventories 106,436 Prepaid expenses and other current assets 2,461 Property, plant and equipment, net 43,554 Operating lease right-of-use assets 12,541 Intangible assets 148,750 Deferred tax assets, net 1,065 Other assets 1,398 Total assets acquired 372,036 Accounts payable 18,590 Accrued expenses and other current liabilities 35,063 Current portion of operating lease liabilities 3,007 Operating lease liabilities, less current portion 12,208 Deferred tax liabilities, net 23,334 Other liabilities 16,227 Total liabilities assumed 108,429 Net assets acquired 263,607 Goodwill 123,129 Total Purchase Price $ 386,736 Identifiable intangible assets Fair Value
(in thousands)Useful life
(in Years)Customer relationships $ 47,359 0.5 to 10 Tradenames 90,691 25 Product formulations 10,700 Indefinite $ 148,750 arrangementincrease in deferred tax liabilities, net of $0.2 million, other liabilities of $0.7 million and goodwill of $0.9 million.lease at inceptionmanufacturer and marketer of the arrangement. Once it is determined that an arrangement is, or contains, a lease, that determination should only be reassessed if the legal arrangement is modified. Changes to assumptions such as market-based factors do not trigger a reassessment. Determining whether a contract contains a lease requires judgement. In general, arrangements are considered to be a lease whenportfolio of zero sugar, keto-friendly, and plant-based sweeteners and baking mixes. The Company purchased all of the issued and outstanding equity interests of both Swerve LLC and Swerve IP from RF Development for $80 million in cash, subject to customary post-closing adjustments. In connection with the acquisition of Swerve, the Company incurred transaction-related costs of $0.3 million in the three months ended March 31, 2021. Swerve is included within the Company’s Branded CPG reportable segment. Swerve’s results are included in the Company’s consolidated statement of operations from the date of acquisition.apply:summarizes the preliminary purchase consideration (in thousands):●it conveys the right to control the use of an identified asset for a period of time in exchange for consideration;Base cash consideration ●$we have substantially all economic benefits from the use of the asset; and80,000 Closing adjustment ●(968)we can direct the use of the identified asset.Total Purchase Price $ 79,032 termsCompany preliminarily recorded the fair value of the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed as follows (in thousands):Accounts receivable $ 3,223 Inventories 6,824 Prepaid expenses and other current assets 223 Property, plant and equipment, net 143 Operating lease right-of-use assets 76 Intangible assets 36,300 Other assets 3 Total assets acquired 46,792 Accounts payable 3,477 Accrued expenses and other current liabilities 288 Current portion of operating lease liabilities 48 Operating lease liabilities, less current portion 28 Total liabilities assumed 3,841 Net assets acquired 42,951 Goodwill 36,081 Total Purchase Price $ 79,032 Identifiable intangible assets Customer relationships $ 3,200 10 Tradenames 33,100 25 $ 36,300 lease arrangement15 year period.howthe fair value of the net assets as of the acquisition date and is subject to adjustments for up to one year after the closing date of the acquisition to reflect final valuations. The accounting for the Swerve acquisition is not complete as the valuation for certain acquired assets and liabilities have not been finalized. These final valuations of the assets and liabilities could have a leasematerial impact on the preliminary purchase price allocation disclosed above.classifiedthe direct parent of its wholly-owned subsidiary Wholesome Sweeteners, Incorporated, which was formed to import, market, distribute, and sell organic sugars, unrefined specialty sugars, and related products. Wholesome is included within the resulting incomeCompany’s Branded CPG reportable segment. Wholesome’s results are included in the Company’s consolidated statement recognition. Whenof operations from the date of acquisition.a lease effectively transfer controlthe Wholesome Purchase Agreement, the Company purchased and acquired all of the underlying asset,issued and outstanding shares of capital stock for an initial cash purchase price of $180 million plus up to an additional $55 million (the “Earn-Out Amount”) upon the lease represents an in substance financed purchase (sale)satisfaction of an assetcertain post-closing financial metrics. Subject to the terms and the lease is classified as a finance lease by the lessee and a sales-type lease by the lessor. When a lease does not effectively transfer controlconditions of the underlying assetWholesome Purchase Agreement payment of the Earn-Out Amount, in whole or in part, is subject to Wholesome achieving certain EBITDA thresholds at or above approximately $30 million during the lessee, butperiod beginning August 29, 2020, and ending December 31, 2021 and is expected to be paid by March 31, 2022. A portion of the lessor obtains a guarantee forEarn-Out Amount (up to $27.5 million) may be paid, at the Company’s election, in freely tradeable, registered shares of Company common stock. In connection with the acquisition of Wholesome, the Company incurred transaction-related costs of $4.5 million in the three months ended March 31, 2021.Base cash consideration $ 180,000 Estimated closing adjustment 10,233 Fair value of Earn-Out Amount 52,395 Total Purchase Price $ 242,628 assetpurchase price to tangible and identifiable intangible assets acquired and liabilities assumed as follows (in thousands):Cash and cash equivalents $ 2,664 Accounts receivable 15,892 Inventories 78,694 Prepaid expenses and other current assets 775 Property, plant and equipment, net 2,763 Operating lease right-of-use assets 7,585 Intangible assets 106,400 Other assets 1,291 Total assets acquired 216,064 Accounts payable 5,251 Accrued expenses and other current liabilities 13,306 Current portion of operating lease liabilities 1,435 Operating lease liabilities, less current portion 6,150 Deferred tax liabilities, net 27,033 Total liabilities assumed 53,175 Net assets acquired 162,889 Goodwill 79,739 Total Purchase Price $ 242,628 Identifiable intangible assets Customer relationships $ 57,600 10 Tradenames 48,800 25 $ 106,400 third party,total of $4.7 million will be deductible for income tax purposes pursuant to IRC Section 197 over a 9 year period.lessor would classifyfair value of the net assets as of the acquisition date and is subject to adjustments for up to one year after the closing date of the acquisition to reflect final valuations. The accounting for the Wholesome acquisition is not complete as the valuation for certain acquired assets and liabilities have not been finalized. These final valuations of the assets and liabilities could have a leasematerial impact on the preliminary purchase price allocation disclosed above.Pro Forma
Statements of OperationsThree Months Ended March 31, 2021 March 31, 2020 Revenue $ 126,205 $ 117,885 Net income (loss) $ 3,951 $ (47,771) directresult of the acquisitions. The unaudited pro forma financial information is for informational purposes only and is not indicative of the results of operations that would have been achieved had the Business Combination and Swerve acquisitions been consummated on January 1, 2019 and the Wholesome acquisition been consummated on January 1, 2020.lease.depreciation expense for certain property, plant and equipment that have been adjusted to fair value, and the release of the inventory fair value adjustments into cost of goods sold. These adjustments are net of taxes. other leases are classified as operating leases.Ordinary shares subject to possible redemptionaccountssubleases certain of its unused office space to third parties. These subleases generated sublease income of $0.2 million and $0.1 million for its ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption are classified as a liability instrumentthree months ended March 31, 2021 and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within2020, respectively.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, ordinary shares are classified as shareholders’ equity. The Company’s ordinary shares feature certain redemption rights that are considered to be outsidefuture maturities of the Company’s control and subject to occurrence of uncertain future events. Accordingly, ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ equity section of the Company’s condensed balance sheets.Income taxesThe Company accounts for income taxes under ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penaltieslease obligations as of March 31, 20202021 (in thousands):Remainder of 2021 $ 4,356 2022 5,441 2023 5,389 2024 3,712 2025 2,593 Thereafter 1,524 Total lease payments 23,015 Less: imputed interest 1,660 Total operating lease liabilities $ 21,355 March 31, 2021 December 31, 2020 Raw materials and supplies $ 109,713 $ 66,487 Work in process 1,130 562 Finished goods 80,994 44,650 Total inventories $ 191,837 $ 111,699 March 31, 2021 December 31, 2020 Gross
AmountAccumulated
AmortizationNet
AmountGross
AmountAccumulated
AmortizationNet
AmountOther intangible assets subject to amortization Customer relationships (useful life of 5 to 10 years) $ 107,891 $ (5,525) $ 102,366 $ 50,877 $ (3,020) $ 47,857 Tradenames (useful life of 25 years) 174,416 (3,637) 170,779 128,155 (2,185) 125,970 Total $ 282,307 $ (9,162) $ 273,145 $ 179,032 $ (5,205) $ 173,827 Other intangible assets not subject to amortization Product formulations 10,700 10,700 Total other intangible assets, net 283,845 184,527 Goodwill 236,895 153,537 Total goodwill and other intangible assets $ 520,740 $ 338,064 2019.2020, goodwill at Branded CPG was $233.6 million and $150.3 million, respectively, and goodwill at Flavors & Ingredients was $3.3 million and $3.2 million, respectively.Remainder of 2021 $ 14,180 2022 18,907 2023 18,907 2024 18,907 2025 18,673 2026 18,453 March 31, 2021 December 31, 2020 Term Loan $ 375,000 $ 136,500 Revolving credit facility 25,000 47,855 Less: current portion (3,750) (7,000) Less: unamortized discount and debt issuance costs (10,993) (4,693) Total long-term debt $ 385,257 $ 172,662 is currentlyused the proceeds under the Term Loan Facility to (i) repay and refinance existing indebtedness of WSO Investments; (ii) pay the cash consideration for the Wholesome Transaction; (iii) repay and refinance outstanding borrowings under the Existing Credit Agreement; and (iv) pay fees and expenses incurred in connection with the foregoing. The proceeds of the Revolving Facility can be used to finance working capital needs, for general corporate purposes, and for working capital adjustments payable under the Wholesome Purchase Agreement.awarelimited to, immaterial subsidiaries and foreign subsidiaries. The Credit Facilities are secured by substantially all of the personal property of the Company and the guarantor subsidiaries (in each case, subject to certain exclusions and qualifications).issuesdebt incurrence, other than debt permitted under review that could resultthe definitive agreements (but excluding debt incurred to refinance the Credit Facilities) and (iii) 50% of “Excess Cash Flow,” as defined in significant payments, accrualsthe Amended and Restated Credit Agreement, with a reduction to 25% if the total net leverage ratio for the fiscal year is less than or material deviation from its position.equal to 3.50 to 1.00 but greater than 3.00 to 1.00, and a reduction to 0% if the total net leverage ratio for the fiscal year is less than or equal to 3.00 to 1.00. The Company also is subjectrequired to income tax examinationsmake quarterly amortization payments equal to 0.25% per annum of the original principal amount of the Term Loan Facility (subject to reductions by major taxing authorities since inception.optional and mandatory prepayments of the loans).ACT II GLOBAL ACQUISITION CORP.NOTES TO CONDENSED FINANCIAL STATEMENTSMARCH 31, 2020(Unaudited)TheAs of the date of the amendment of the credit facilities, the aggregate unamortized debt issuance costs totaled $6.2 million, of which $4.4 million were expensed as a loss on extinguishment of debt. Additionally, in connection with the Amended and Restated Credit Agreement, the Company ispaid fees to certain lenders of $3.8 million, which are considered an exempted Cayman Islandsa debt discount, all of which were deferred, and incurred transaction costs of $8.9 million, of which $7.8 million was deferred and $1.1 million was expensed as part of loss on extinguishment and debt transaction costs.is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the periods presented.Net loss per ordinary shareNet loss per ordinary share is computed by dividing net loss by the weighted average number of ordinary shares outstanding for the period. Weighted average shares at March 31, 2019 were reduced for the effect of an aggregate of 978,750 ordinary shares(ii) 5,263,500 Private Warrants that were subjectsold by Act II to forfeiture if the over-allotment option was not exercised byPIPE Investors in conjunction with the underwriters (see Note 9)Business Combination (collectively with the Public Warrants, the “Warrants”). The Company applies the two-class method in calculating earnings per share. Ordinary shares subject to possible redemption at March 31, 2020, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculationEach warrant is exercisable for one-half of basic net loss per ordinary share since such shares, if redeemed, only participate in their pro rataone share of the Trust Account earnings. The Company has not considered the effect of warrants sold in the Initial Public Offering and the private placement to purchase 21,750,000 ordinary shares in the calculation of diluted loss per share, since the exercise of the warrants into ordinary shares is contingent upon the occurrence of future events. As a result, diluted net loss per ordinary share is the same as basic net loss per ordinary share for the periods presented.Reconciliation of net loss per ordinary shareThe Company’s net income (loss) is adjusted for the portion of income that is attributable to ordinary shares subject to possible redemption, as these shares only participate in the earnings of the Trust Account and not the income or losses of the Company. Accordingly, basic and diluted net loss per ordinary share is calculated as follows: 2020 2019 Net income (loss) $ 179,260 $ (15,517 ) Less: Income attributable to ordinary shares subject to possible redemption (715,207 ) — Adjusted net loss $ (535,947 ) $ (15,517 ) Weighted average shares outstanding, basic and diluted 8,997,643 6,525,000 Basic and diluted net loss per ordinary share $ (0.06 ) $ (0.00 ) Concentration of credit riskFinancial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which at times may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.Fair value of financial instrumentsThe fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurement,”, approximates the carrying amounts represented in the accompanying condensed financial statements, primarily due to their short-term nature.Recently issued accounting standardsManagement does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the accompanying condensed financial statements. ACT II GLOBAL ACQUISITION CORP.NOTES TO CONDENSED FINANCIAL STATEMENTSMARCH 31, 2020(Unaudited)NOTE 4. INITIAL PUBLIC OFFERINGPursuant to the Initial Public Offering, the Company sold 30,000,000 Units, inclusive of 3,900,000 Units sold to the underwriters upon the election to partially exercise their over-allotment option, at a price of $10.00 per Unit. Each Unit consists of one Class A Share and one-half of one Warrant. Each whole warrant entitles the holder to purchase one Class A Sharecommon stock at a price of $11.50 per share. whole share, subject to adjustment. Warrants may only be exercised for a whole number of shares as no fractional shares will be issued. As of March 31, 2021 and December 31, 2020, the Company had approximately 17,256,300 and 15,982,520 Public Warrants outstanding, respectively, and approximately 3,007,200 and 4,280,980 Private Warrants outstanding, respectively.Warrants will become exercisable on the laterexercise price and number of 30 days after completionordinary shares issuable upon exercise of the Business CombinationWarrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or 12 months fromrecapitalization, reorganization, merger or consolidation. If the closingnumber of shares of Common Stock purchasable upon the exercise of the Initial Public OfferingWarrants is adjusted, the Warrant price shall be adjusted proportionally. In no event will the Company be required to net cash settle the Warrants. Additionally, the Warrants became exercisable as of July 27, 2020 and will expire five years from the completiondate of the Business Combination or earlier upon redemption or liquidation.Company may redeemPublic Warrants are subject to redemption by the Warrants Company:Warrant public warrantinif, the event that thereported last sale price of the Class A Shares is at least $18.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like)ordinary shares for any 20 trading days within a 3030-day trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption is given. to the warrant holders equals or exceeds $18 per share (as adjusted).willmay not redeem the Warrantswarrants as described above unless a registration statement under the Securities Act covering the Class A Sharesissuance of the ordinary shares issuable upon exercise of the Warrantswarrants is then effective and a current prospectus relating to those ordinary shares is available throughout the 30 day30-day redemption period, unlessperiod. If any such registration statement does not remain effective after closing of the Warrants may be exercisedBusiness Combination, the Company has the right to redeem the warrants on a cashless basis and such cashless“cashless” exercise is exempt from registration under the Securities Act. If the Company redeems the Warrants as described above, management willbasis. The public warrant holders only have the option to require all holders that wishright to exercise their Warrantswarrants pursuant to do so on a cashless basis; provided that an exemption from registration is available. No Warrants will be exercisable for cash unless“cashless” exercise if the Company hasdoes not maintain an effective registration statement covering the Class A Shares issuable upon exercise of thestatement. and a current prospectus relating to such shares. If the shares issuable upon exercise of the Warrants are not registered under the Securities Act, holders will be permitted to exercise their Warrants on a cashless basis. However, no Warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any Class A Shares to holders seeking to exercise their Warrants, unless the issuance of the Class A Shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption is available.If the Company issues additional Class A shares or equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination at an issue price or effective issue price of less than $9.20 per ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors, and 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) (the “newly issued price”), the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the newly issued price.NOTE 5. PRIVATE PLACEMENTSimultaneously with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 6,750,000 Private Placement Warrants at $1.00 per Private Placement Warrant (for an aggregate purchase price of $6,750,000) from the Company. A portion of the proceeds from the sale of the Private Placement Warrants was placed into the Trust Account. Each Private Placement Warrant is exercisable for one Class A Share at a price of $11.50 per share. Placement Warrants are identical to the Warrants included in the Units sold in the Initial Public OfferingWarrants, except that so long as they are held by the PIPE Investors or any permitted transferees, as applicable, the Private Placement Warrants: (i) will not be redeemable by the Company; (ii) may be exercised for cash or on a cashless basis, as described in(ii) were not allowed to be transferred, assigned or sold until thirty (30) days after the registration statement relating toclosing of the Initial Public Offering, so long as they are heldBusiness Combination, and (iii) shall not be redeemable by the SponsorCompany. Upon the transfer of a Private Warrant to a party other than a PIPE Investor or any of itsa permitted transfereestransferee, the Private Warrants become Public Warrants and (iii) are (including the Class A shares issuable upon exercisefair market value of the Private Placement Warrants) entitledWarrants at the date of transfer is reclassified to registration rights. Additionally,equity. See Note 1 for additional discussion.Sponsor has agreedCompany’s own assumptions (unobservable inputs). This hierarchy consists of the following three levels:transfer, assign or sell anythe overall fair value measurement.Placement Warrants including the Class A Shares issuable upon exerciseusing a Black-Scholes options pricing model. The fair value of the Private Placement Warrants (exceptutilized Level 3 inputs as it is based on significant inputs not observable in the market as of March 31, 2021.Input March 31, 2021 Asset price $ 13.04 Exercise price $ 11.50 Risk-free interest rate 0.7 % Expected volatility 45.0 % Expected term (years) 4.24 Dividend yield 0.0 % Reclassification of fair value of Private Warrants to warrant liabilities as of January 1, 2021 $ 8,139 Cumulative impact of change in fair value of Private Warrants in 2020 (1,161) Transfer of Private Warrants to Public Warrants (2,502) Change in fair value of warrant liabilities in Q1 2021 3,523 Fair value of warrant liabilities as of March 31, 2021 $ 7,999 permitted transferees)non-deductible expenses including transaction costs, the change in the fair value of warrant liabilities, stock-based compensation expense and the U.S. tax effect of international operations including Global Intangible Low-Taxed Income (“GILTI”) recorded during the period.(Successor) (Predecessor) Three Months Ended
March 31, 2021Three Months Ended
March 31, 2020Service cost $ 16 $ 14 Interest cost 259 51 Expected return on plan assets (399) 0 Recognized actuarial loss 9 40 Net periodic benefit (credit) cost $ (115) $ 105 (Successor) (Predecessor) Three Months Ended
March 31, 2021Three Months Ended
March 31, 2020Selling, general and administrative expense $ 16 $ 14 Other income, net (131) 91 Net periodic benefit (credit) cost $ (115) $ 105 until 30 days afterstock appreciation rights (“SARs”), restricted stock awards (“RSAs”), restricted stock units (“RSUs”), performance shares, performance share units (“PSUs”) and other stock-based awards to officers, employees and non-employee directors of, and certain other service providers to, the Company and its subsidiaries.These awards are settled in shares of the Company’s stock and therefore classified as equity awards. Under the terms of the Plan an aggregate of 9,300,000 shares of common stock are authorized for issuance under the Plan.Three Months Ended
March 31, 2021Shares Weighted Average Fair Value Outstanding at December 31, 2020 633,057 $ 8.34 Granted 534,144 13.58 Vested (640) 8.34 Forfeited (14,118) 8.34 Outstanding and nonvested at March 31, 2021 1,152,443 $ 10.77 Three Months Ended
March 31, 2021Shares Weighted Average Fair Value Outstanding at December 31, 2020 68,946 $ 8.34 Granted 0 0 Outstanding and nonvested at March 31, 2021 68,946 $ 8.34 Unrecognized Compensation Cost Weighted Ave. Remaining Recognition Period (in years) Nonvested awards $ 10,401 1.15 Business Combination.repurchase plan or the earlier termination of the repurchase plan), in open market transactions at prevailing market prices, in privately negotiated transactions, or by other means in accordance with U.S. federal securities laws. There were 0 repurchases of the Company’s common stock under the stock repurchase plan.(Successor) Three Months Ended
March 31, 2021EPS numerator: Net loss attributable to common shareholders $ (12,025) EPS denominator: Weighted average shares outstanding - basic 38,430,742 Effect of dilutive securities 0 Weighted average shares outstanding - diluted 38,430,742 Net loss per share: Basic $ (0.31) Diluted $ (0.31) Net Currency Translation Gains (Losses) Funded Status of
Benefit PlansTotal Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2019 (Predecessor) $ 2,885 $ (10,944) $ (8,059) Other comprehensive loss before reclassifications (1,884) 0 (1,884) Amounts reclassified from AOCI 0 48 48 Balance at March 31, 2020 (Predecessor) $ 1,001 $ (10,896) $ (9,895) Balance at December 31, 2020 (Successor) $ 7,774 $ 831 $ 8,605 Other comprehensive loss before reclassifications (2,047) 0 (2,047) Amounts reclassified from AOCI 0 9 9 Balance at March 31, 2021 (Successor) $ 5,727 $ 840 $ 6,567 6.16: RELATED PARTY TRANSACTIONSPromissory Note – Related PartyOn February 13, 2019,Company issued an unsecured promissory notePredecessor along with MacAndrews and its other affiliates. The limits of coverage are available on aggregate losses to the Sponsor pursuant to which the Company could borrow up to $300,000 in the aggregate. The note was non-interest bearing and payable on the earlier to occur of (i) December 31, 2019any or (ii) the consummationall of the Initial Public Offering. The borrowings outstanding under the note of $274,178 were repaid upon the consummation of the Initial Public Offering on April 30, 2019.Administrative Services AgreementThe Company entered into an agreement whereby, commencing on April 25, 2019 through the earlier of the consummation of a Business Combination or the Company’s liquidation, it will pay an aggregate of $10,000 per month to the Sponsor for office space, administrativeparticipating companies and support services. The Company’s 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 their behalf such as identifying potential target businessesdirectors and performing due diligence on suitable business combinations. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on behalf of the Company.officers. For the three months ended March 31, 2020, the Company incurredPredecessor reimbursed MacAndrews an immaterial amount for its allocable portion of the premiums for such coverage, which the Predecessor believed was more favorable than the premiums that it could have secured were it to secure its own coverage. The Predecessor also participated in certain other insurance programs with MacAndrews under which it paid premiums directly to the insurance broker.paid $30,000wholly-owned subsidiary of Merisant. This revolving credit facility, as amended, had a maturity date of January 3, 2022 and provided for maximum outstanding borrowings of up $9.0 million. The revolving credit facility was unsecured and bore interest at 3-month LIBOR plus 4.0% and provided for periodic interest payments with all principal due upon maturity. MacAndrews had the right to accept or reject any borrowing request made by the Predecessor pursuant to the revolving credit agreement in fees for these services.10ACT II GLOBAL ACQUISITION CORP.NOTES TO CONDENSED FINANCIAL STATEMENTSMARCH 31,its sole discretion. The outstanding balance on the revolving credit agreement at June 25, 2020(Unaudited)Related Party LoansIn addition, in order to finance transaction costs was $3.4 million and was forgiven by MacAndrews in connection with an intended initialthe Business Combination,Combination. Outstanding borrowings at March 31, 2020 were $6.9 million and the Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required. If the Company completes its initial Business Combination, it would repay such loaned amounts. In the event that the initial Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from the 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 $1.00 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants issued to the Sponsor.NOTE 7. COMMITMENTSRisks and UncertaintiesManagement is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.Underwriting AgreementThe underwriters are entitled to deferred fees of $11,280,000. The deferred fees will be forfeited by the underwriters solely in the event that the Company fails to complete a Business Combination, subject to the terms of the underwriting agreement.Lease AgreementOn December 20, 2019, the Company entered into a sub-lease agreement providing the Company with office space. The sub-lease provided that the Company’s occupancy begins January 2020 with monthly rental payments $19,000 commencing May 1, 2020. The sub-lease terminates on July 13, 2021. As a result, the Company applied the provisions of ASU 2016-02 effective January 1, 2020. The application of ASU 2016-02 resulted in the Company recognizing a right-of-use asset of approximately $298,000 and a related lease liability of approximately $279,000. The right-of use-asset is being amortized as rent expense on a straight-line basis. The adoption ASU 2016-12 did not have a material effect on the Company’s results of operations or liquidity.Components of leaseinterest rate was 5.22%. Interest expense for the three months ended March 31, 2020 are as follows:Operating lease cost $ 33,878 Total Rent Expense $ 33,878 11ACT II GLOBAL ACQUISITION CORP.NOTES TO CONDENSED FINANCIAL STATEMENTSMARCH 31, 2020(Unaudited)Future minimum lease payments as of March 31, 2020 are as follows:Year ending December 31, 2020 (remaining) $ 171,000 2021 122,234 Total future minimum lease payments $ 293,234 Less: imputed interest (11,716 ) Present value of operating lease liabilities $ 281,518 Other Information Weighted-average remaining lease term for operating leases 15.5 months Weighted-average discount rate for operating leases 6.0 % On February 12,In July 2020, the Company entered into an agreement with Watermill Institutional Trading LLC, a sub-lease agreement, pursuantregistered broker-dealer (“Watermill”), to act as one of the Company’s financial advisors for a 12-month period commencing July 22, 2020 for total consideration of $0.9 million, of which it will receive lease payments$0.2 million was expensed in the amount of $5,000 per month commencing on May 1, 2020 through July 1, 2021.Future minimum lease receivables as ofthree months ended March 31, 2020 are as follows:Year ending December 31, 2020 (remaining) $ 40,000 2021 32,500 Total future minimum lease receivables $ 72,500 NOTE 8. PENDING ACQUISITION AND RELATED AGREEMENTSPurchase AgreementThe2021. Additionally, the Company is partyincurred additional expense of $2.0 million related to a purchase agreement dated December 19, 2019, as amended February 12, 2020 and May 8, 2020 (the “Agreement”), with Flavors Holdings Inc. (“Flavors Holdings”), MW Holdings I LLC (“MW Holdings I”), MW Holdings III LLC (“MW Holdings III”) and Mafco Foreign Holdings, Inc. (together with Flavors Holdings, MW Holdings I and MW Holdings III, the “Sellers”), and, for the purposes of Amendment No. 2 to the Agreement, Project Taste Intermediate LLC,services provided by Watermill in connection with the proposed purchaseacquisition of allWholesome. A former director of the outstanding equity interestsAct II is a registered representative of Merisant Company (“Merisant”), Merisant Luxembourg (“Merisant Luxembourg”), Mafco Worldwide LLC (“Mafco Worldwide”), Mafco Shanghai LLC (“Mafco Shanghai”), EVD Holdings LLC (“EVD Holdings”),Watermill and Mafco Deutschland GmbH (together with Merisant, Merisant Luxembourg, Mafco Worldwide, Mafco Shanghai, and EVD Holdings, the “Transferred Entities”). Subject to the terms and conditions of the Agreement, at the closing (the “Closing”) of the transactions contemplated thereunder (the “Transactions”), the Sellers will sell, convey, assign, transfer and deliveris providing services directly to the Company (or its designee),under the agreement.Company (or its designee) will purchase, allfirst quarter of 2021, the issuedCompany’s corporate office functions are now reported and outstanding equity interests ofincluded under Corporate. Corporate is not a reportable or operating segment but is included for reconciliation purposes and includes the Transferred Entities and certain assets thereof, and assume certain liabilities included in the Transferred Assets and Liabilities (as defined in the Agreement), in each instance, free and clear of all liens (subject to certain exceptions set forth in the Agreement), in exchange, subject to the limitations set forth below,costs for the Cash Consideration and the Ordinary Shares Consideration (as defined below).Pursuant to Amendment No. 2 to the Agreement, the Company assigned its rights under the Agreement to Project Taste Intermediate LLC, a newly-formed directly wholly-owned limited liability company subsidiary of the Company, such that, following the Closing, (i) the sole asset of the Company will be its membership interest in such subsidiary, and (ii) the subsidiary will own all of the equity interests of the Transferred Entities and hold all of the Transferred Assets and Liabilities.Subject to the terms and conditions set forth in the Agreement, at the Closing, the Sellers will receive (i) $415,000,000 in cash (the “Base Cash Consideration”) (which, under certain conditions, may be reduced by the Company by up to $20,000,000 immediately prior to Closing in exchange for a dollar-for-dollar increase in the Ordinary Shares Consideration (as defined below)), plus or minus the Adjustment Amount (as defined in the Agreement) (the “Cash Consideration”), and (ii) that number of Class A ordinary shares of the Company (“Class A Ordinary Shares”) equal to the higher of (1) 2,500,000 or (2) the quotient of (x) the sum of $25,000,000 plus the amount, if any, by which the Base Cash Consideration is reduced by the Company in accordance with the terms of the Agreement, divided by (y) the lowest per share price at which Class A Ordinary Shares are sold by the Company to any person from and after the date of the Agreement but prior to, at or in connection with the Closing (the “Ordinary Shares Consideration”). The Agreement further provides the Company with the option, immediately prior to Closing, subject to certain conditions set forth in the Agreement and after (a) giving effect to the Private Placement (described below), any additional equity financing, and the Debt Financing (described below) and (b) taking into account all amounts held by the Company in trust, to reduce the Base Cash Consideration by the amount of funds necessary (up to $20,000,000) for the Company to pay (i) the Cash Consideration, (ii) any amounts paid in connection with the Warrant Amendment (described below), and (iii) the Transaction Costs (as defined in the Agreement) in exchange for a dollar-for-dollar increase in the Ordinary Shares Consideration.In addition, the Agreement contemplates that immediately following the Closing, the Company’s sponsor, Act II Global LLC (the “Sponsor”), will place 2,000,000 Class A Ordinary Shares (which will be converted at Closing from Class B ordinary shares of the Company currently held by the Sponsor) (the “Escrowed Sponsor Shares”) into escrow, which will be held in escrow by the Company’s transfer agent. The Escrowed Sponsor Shares will be released to the Sponsor upon the earliest to occur of (i) the volume weighted-average per-share trading price of Class A Ordinary Shares being at or above $20.00 per share for twenty (20) trading days in any thirty (30)-trading day continuous trading period during the Escrow Period, (ii) a change in control of the Company, and (iii) 5-year anniversary of the Closing.ACT II GLOBAL ACQUISITION CORP.NOTES TO CONDENSED FINANCIAL STATEMENTSMARCH 31, 2020(Unaudited)Debt FinancingOn December 19, 2019, in connection with entering into the Agreement, the Company entered into a commitment letter,corporate office administrative activities as amended on May 8, 2020 (the “Commitment Letter”), with TD Securities (USA) LLC (“TDSL”),well as left lead arranger and book runner, The Toronto-Dominion Bank, New York Branch (“TDNY”), and Toronto Dominion (Texas) LLC (“TDTX”) as administrative agent. Pursuant to the Commitment Letter, TDSL agreed to arrange and TDNY committed to provide the Company with (i) a senior secured term loan facility in the aggregate amount of up to $185,000,000 (the “Term Facility”) and (ii) a senior secured revolving credit facility of up to $50,000,000 (the “Revolving Facility,” and together with the Term Facility, the “Credit Facilities”). The proceeds of the Term Facility on the Closing Date (as defined in the Agreement) may be used (x) to fund the Transactions, and (y) to pay the fees, costs and expenses incurred in connection with the Transactions. Up to $5,000,000 of the proceeds of the Revolving Facility (which may be increased) may be used on the Closing Date for general corporate purposes and to backstop or replace letters of credit. The proceeds of the Revolving Facility after the Closing Date may be used for working capital and general corporate purposes, including for capital expenditures. The availability of the borrowings under the Credit Facilities is subject to the satisfaction of certain customary conditions, including the consummation of the Transactions.Private Placement TransactionsIn connection with the foregoing Agreement, on February 12, 2020, the Company entered into subscription agreements with certain investors (collectively, the “Private Placement Investors”) pursuant to which, among other things, such investors agreed to subscribe for and purchase, and the Company agreed to issue and sell to such investors, 7,500,000 of the Company’s Class A ordinary shares, par value $0.0001 (the “Ordinary Shares”), and warrants representing the right to purchase 2,631,750 Ordinary Shares (the “Warrants”) for gross proceeds of approximately $75,000,000 (the “Private Placement”). The Company granted certain customary registration rights to the Private Placement Investors. The Ordinary Shares and Warrants to be offered and sold in connection with the Private Placements have not been registered under the Securities Act, in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act and/or Regulation D or Regulation S promulgated thereunder without any form of general solicitation or general advertising. The Private Placement is contingent upon, among other things, the closing of the Transactions. The proceeds from the Private Placement will be used to fund a portion of the Aggregate Cash Obligations (as defined under the Agreement) for the Transactions. In connection with the above agreements, the Company has agreed to put forth a proposal to the Company’s public warrant holders to consider and vote upon an amendment (the “Warrant Amendment”) to the existing warrant agreement that governs all of the Company’s outstanding warrants to provide that, immediately prior to the Closing, (i) each of the Company’s outstanding warrants, which currently entitle the holder thereof to purchase one Class A Ordinary Share at an exercise price of $11.50 per share, will become exercisable for one-half of one share at an exercise price of $5.75 per one-half share ($11.50 per whole share) and (ii) each holder of a warrant will receive, for each such warrant, a cash payment of $0.75 (although the holders of the Private Placement warrants have waived their rights to receive such payment).Sponsor Support AgreementIn connection with the Agreement, the Company, the Sponsor, and the Sellers entered into a Sponsor Support Agreement on December 19, 2019, as amended on February 12, 2020 (the “Sponsor Support Agreement”), pursuant to which the Sponsor agreed to certain covenants and agreements related to the Transactions, particularly with respect to taking supportive actions to consummate the Transactions and to designate two of the Sellers’ directors to the board of directors of the Company, to be effective at the Closing. In addition, the Sponsor irrevocably waived its anti-dilution protections under the Company’s Amended and Restated Memorandum and Articles of Association in connection with any new issuances of Ordinary Shares. In accordance with the terms of the Sponsor Support Agreement, the Sponsor will forfeit (i) 3,000,000 Class B ordinary shares of the Company; and (ii) 6,750,000 warrants to purchase Class A Ordinary Shares at a price of $11.50 per share (the “Founder Warrants”) immediately following the Closing; and the Sponsor has waived any rights that it might otherwise have to receive any cash payment with respect to its Founder Warrants.Registration StatementIn connection with the proposed business combination and warrant amendment, the Company filed a Registration Statement on Form S-4 with the SEC, which was declared effective on May 13, 2020. The definitive proxy statement/prospectus is first being mailed to the Company’s shareholders and warrant holders on or about May 15, 2020. NOTE 9. SHAREHOLDERS’ EQUITYPreference SharesThe Company is authorized to issue 2,000,000 preference shares with a par value of $0.0001. The Company’s board of directors is authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. The board of directors will be able to, without shareholder approval, issue preferred shares with votingtransaction-related and other rights that could adversely affect the voting power and other rights of the holders of the Ordinary Shares and could have anti-takeover effects. At March 31, 2020 and December 31, 2019, there were no preference shares issued or outstanding.13ACT II GLOBAL ACQUISITION CORP.NOTES TO CONDENSED FINANCIAL STATEMENTSMARCH 31, 2020(Unaudited)Ordinary SharesThe Company is authorized to issue 200,000,000 Class A Shares, with a par value of $0.0001 each, and 20,000,000 Class B ordinary shares, with a par value of $0.0001 each (the “Class B Shares” and, together with the Class A Shares, the “Ordinary Shares”). Holders of the Ordinary Shares are entitled to one vote for each Ordinary Share; provided that only holders of the Class B Shares have the right to vote on the election of directorscosts. Certain prior to the Business Combination. The Class B Shares will automatically convert into Class A Shares at the time of the Business Combination, on a one-for-one basis, subject to adjustment for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional Class A Shares, 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 Business Combination, the ratio at which the Class B Shares shall convert into Class A Shares will be adjusted (unless the holders of a majority of the outstanding Class B Shares agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of Class A Shares issuable upon conversion of all Class B Shares will equal, in the aggregate, 20% of the sum of all Ordinary Shares outstanding upon completion of the Initial Public Offering plus all Class A Shares and equity-linked securities issued or deemed issued in connection with the Business Combination, excluding any Ordinary Shares or equity-linked securities issued, or to be issued, to any seller in the Business Combination, any Private Placement-equivalent Warrants issued to the Sponsor or its affiliates upon conversion of loans made to the Company. Holders of Founder Shares may also elect to convert their Class B Shares into an equal number of Class A Shares, subject to adjustment as provided above, at any time.At March 31, 2020 and December 31, 2019, there were 1,550,484 and 1,497,643 Class A Shares issued and outstanding, excluding 28,449,516 and 28,502,357 Class A Shares subject to possible redemption, respectively. At March 31, 2020 and December 31, 2019, there were 7,500,000 Class B Shares issued and outstanding.Founder Shares — On February 15, 2019, an aggregate of 2,875,000 Class B Shares (the “Founder Shares”) were sold to the Sponsor for an aggregate purchase price of $25,000. On April 4, 2019, the Company effected a share capitalization in the form of a share dividend of 2.5 shares for each Founder Share in issue, and on April 25, 2019, the Company effected a share capitalization in the form of a share dividend of 1.044 shares for each Founder Share in issue, resulting in the Sponsor holding an aggregate of 7,503,750 Founder Shares. All share and per-shareyear amounts have been retroactively restatedreclassified to reflectconform to the share dividends.current presentation. The 7,503,750 Founder Shares included an aggregate of up to 978,750 Founder Shares that were subject to forfeiture if the over-allotment option wasCompany does not exercised in fullpresent assets by reportable segments as they are not reviewed by the underwriters in orderChief Operating Decision Maker for purposes of assessing segment performance and allocating resources.maintain the Initial Shareholder’s ownership at 20% of the issuedCondensed Consolidated and outstanding Ordinary Shares upon completion of the Initial Public Offering. As a result of the underwriters’ election to partially exercise their over-allotment option, 3,750 Founder Shares were forfeited and 975,000 Founder Shares are no longer subject to forfeiture.The Founder Shares are identical to the Class A Shares included in the Units sold in the Initial Public Offering, except that the Founder Shares (i) have the voting rights described above, (ii) are subject to certain transfer restrictions described below and (iii) are convertible into Class A Shares on a one-for-one basis, subject to adjustment pursuant to the anti-dilution provisions contained therein, (iv) certain registration rights. The Founder Shares may not be transferred, assigned or sold until the earlier of (i) one year after the completion of the Business Combination and (ii) the date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction after the Business Combination that results in all of the Public Shareholders having the right to exchange their Class A Shares for cash, securities or other property. Notwithstanding the foregoing, if the last sale price of the Class A Shares equals or exceeds $12.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 -trading day period commencing at least 150 days after the Business Combination, the Founder Shares will be released from the lock-up.
(Unaudited) ACT II GLOBAL ACQUISITION CORP.NOTES TO CONDENSED FINANCIAL STATEMENTSMARCH 31, 2020(Unaudited)NOTE 10. FAIR VALUE MEASUREMENTS The Company follows the guidance in ASC Topic 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:Level 1:Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.Level 2:Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.Level 3:Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.about the Company’s assets that are measured at fair value on a recurring basis at March 31, 2020 and December 31, 2019, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:Description Level Assets: Marketable securities held in Trust Account 1 $ 305,037,224 $ 304,283,025 NOTE 11. LEGAL PROCEEDINGSFrom time to time, the Company is subject to various claims, lawsuits and other legal and administrative proceedings arising in the ordinary course of business. Some of these claims, lawsuits and other proceedings may involve highly complex issues that are subject to substantial uncertainties, and could result in damages, fines, penalties, non-monetary sanctions or relief. However, the Company’s management does not consider any such claims, lawsuits or proceedings that are currently pending, individually or in the aggregate, to be materialrelating to the Company’s business or likely to result in a material adverse effect onsegments (in thousands):(Successor) (Predecessor) Three Months Ended
March 31, 2021Three Months Ended
March 31, 2020Product revenues, net Branded CPG $ 81,797 $ 40,219 Flavors & Ingredients 24,028 25,753 Total product revenues, net $ 105,825 $ 65,972 Operating income (loss) Branded CPG $ 10,159 $ (6,755) Flavors & Ingredients 972 (24,010) 11,131 (30,765) Corporate (14,195) (2,557) Total operating income (loss) $ (3,064) $ (33,322) future operating results, financial condition or cash flows.Elstein v. Simon et al., Index No. 603599/2020 (Nassau Cnty. Mar. 6, 2020). By complaint filed March 6, 2020, a shareholder brought an individual and derivative suit with respect to the Business Combination. The plaintiff brings three derivative claims under Cayman Islands law: (I) breaches of fiduciary duties as to the individual director defendants; (II) failure to disclose material information regarding the Business Combination as to the individual director defendants; and (III) aiding and abetting director defendants’ breaches of fiduciary duties as to Flavors Holdings, also named as a defendant. The plaintiff alleges that the individual defendants breached their fiduciary duties by acting in their own self-interest in causing or facilitating the Business Combination agreement, that Flavors Holdings aided and abetted such breaches, and that such conflicts of interest and breaches, and other allegedly material information, were not disclosed to shareholders. The plaintiff also brings one direct negligent misrepresentation claim under New York common law alleging that the proxy statement filed on February 14, 2020, soliciting the shareholder vote contained false and misleading statements and omissions. The Company believes that these claims are without merit and will defend against them vigorously.NOTE 12. SUBSEQUENT EVENTSThe Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed financial statements were issued. Based upon this review, other than as disclosed in the notes to the condensed financial statements, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed financial statements.(Successor) (Predecessor) Three Months Ended
March 31, 2021Three Months Ended
March 31, 2020Branded CPG: North America $ 51,970 $ 15,248 Europe 19,414 15,970 India, Middle East and Africa 2,643 2,056 Asia-Pacific 5,226 4,172 Latin America 2,544 2,773 Flavors & Ingredients 24,028 25,753 Total product revenues, net $ 105,825 $ 65,972 ITEMMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSReferences in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Act II Global Acquisition Corp. References to our “management” or our “management team” refer to our officersManagement’s Discussion and directors,Analysis of Financial Condition and references to the “Sponsor” refer to Act II Global Sponsor LLC. Results of Operations the Company’s financial condition and results of operations should be read together with our consolidated financial statements and related notes included in conjunction withour Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (“Annual Report”) and our unaudited condensed consolidated and combined financial statements and the related notes thereto containedappearing elsewhere in this Quarterly Report. Certain information contained inFor purposes of this section, “Whole Earth Brands,” the discussion“Company,” “we,” or “our” refer to (i) Mafco Worldwide & Merisant and analysis set forth below includes forward-looking statements that involve riskstheir subsidiaries (“Predecessor”) for the Period from January 1 2020 through March 31, 2020 (each referred to herein as a “Predecessor Period”) prior to the consummation of the Business Combination and uncertainties.Special(ii) Whole Earth Brands, Inc. and its subsidiaries (the “Successor”) for the period from January 1, 2021 through March 31, 2021 (the “Successor Period”) after the Business Combination, unless the context otherwise requires.includes “forward-looking statements”on Form 10-Q within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Exchange Act that(the “Exchange Act”) concerning us and other matters. These statements may discuss goals, intentions and expectations as to future plans, trends, events, results of operations or financial condition, or otherwise, based on current beliefs of management, as well as assumptions made by, and information currently available to, management.not historical facts,subject to risks, uncertainties and involve risks and uncertaintiesother factors, many of which are outside of our control, which could cause actual results to differ materially from the results contemplated by the forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, our ability to achieve or maintain profitability; the extent of the impact of the COVID-19 pandemic, including the duration, spread, severity, and any recurrence of the COVID-19 pandemic, the duration and scope of related government orders and restrictions, the impact on our employees, and the extent of the impact of the COVID-19 pandemic on overall demand for our products; local, regional, national, and international economic conditions that have deteriorated as a result of the COVID-19 pandemic including the risks of a global recession or a recession in one or more of our key markets, and the impact they may have on us and our customers and management’s assessment of that impact; the projected financial information, anticipated growth rate, and market opportunity of our Branded CPG and Flavors & Ingredients business segments; the ability to maintain the listing of our securities on Nasdaq; the potential liquidity and trading of our public securities; our expected capital requirements and projected. All statements,the availability of additional financing; our ability to attract or retain highly qualified personnel, including in accounting and finance roles; extensive and evolving government regulations that impact the way we operate; the effect of the reclassification and treatment of warrants pursuant ASC Topic 815-40; the impact of the COVID-19 pandemic on our suppliers, including disruptions and inefficiencies in the supply chain; factors relating to the business, operations and financial performance of our Branded CPG and Flavors & Ingredients segments; our success in integrating the various operating companies constituting Merisant and MAFCO; our ability to integrate our acquisitions and achieve the anticipated benefits of the transactions in a timely manner or at all; our ability to continue to use, maintain, enforce, protect and defend its owned and licensed intellectual property, including the Whole Earth® brand; and such other than statements of historical fact includedfactors as discussed throughout, including in this Form 10-Q including, without limitation, statements in this “Management’sPart I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” regardingOperations and in Part II, Item 1A. Risk Factors of this Quarterly Report on Form 10-Q.Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipatedexpectations reflected in the forward-looking statements please refer to the Risk Factors section of the Company’s final prospectus for its Initial Public Offering filed with the U.S. Securitiesare reasonable, our information may be incomplete or limited, and Exchange Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov.we cannot guarantee future results. Except as expressly required by applicable securities law, the Company disclaims any intention orwe assume no obligation to update or revise anythese forward-looking statements whether as a result offor any reason, even if new information future events or otherwise.blank checkglobal food company incorporatedenabling healthier lifestyles and providing access to high-quality plant-based sweeteners, flavor enhancers and other foods through our diverse portfolio of trusted brands and delicious products. We operate a proven platform organized into two reportable segments.the Cayman Islands on August 16, 2018 formedits capacity as representative for the purposeWSO Sellers. WSO Investments is the direct parent of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization or similar Business Combination with one or more businesses. We intendits wholly-owned subsidiary Wholesome Sweeteners, Incorporated, which was formed to effectuate our Business Combination using cash derived fromimport, market, distribute, and sell organic sugars, unrefined specialty sugars, and related products.proceedsterms of the Initial Public Offering, our shares, debt or a combination of cash, sharesWholesome Purchase Agreement, (i) the Company purchased and debt.The issuance of additional ordinary shares in a Business Combination:●may significantly dilute the equity interest of investors, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares;●may subordinate the rights of holders of ordinary shares if preference shares are issued with rights senior to those afforded our ordinary shares;●could cause a change of control if a substantial number of our ordinary shares 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;●may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us; and●may adversely affect prevailing market prices for our Class A ordinary shares and/or warrants.Similarly, if we issue debt securities, it could result in:●default and foreclosure on our assets if our operating revenues after a 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 security is payable on demand;●our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding;●our inability to pay dividends on our ordinary shares;●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 ordinary shares 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 expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.Recent DevelopmentsPENDING ACQUISITION AND RELATED AGREEMENTSPurchase AgreementThe Company is party to a purchase agreement dated December 19, 2019, as amended February 12, 2020 and May 8, 2020 (the “Agreement”), with Flavors Holdings Inc. (“Flavors Holdings”), MW Holdings I LLC (“MW Holdings I”), MW Holdings III LLC (“MW Holdings III”) and Mafco Foreign Holdings, Inc. (together with Flavors Holdings, MW Holdings I and MW Holdings III, the “Sellers”), and, for the purposes of Amendment No. 2 to the Agreement, Project Taste Intermediate LLC, in connection with the proposed purchase ofacquired all of the issued and outstanding equity interestsshares of Merisantcapital stock of WSO Investments from the WSO Sellers, for (x) an initial cash purchase price of $180 million (subject to customary post-closing adjustments), plus (y) as more thoroughly described below, up to an additional $55 million (the “Earn-Out Amount”) upon the satisfaction of certain post-closing financial metrics by Wholesome; and (ii) WSO Investments became an indirect wholly-owned subsidiary of the Company (“Merisant”), Merisant Luxembourg (“Merisant Luxembourg”), Mafco Worldwide LLC (“Mafco Worldwide”), Mafco Shanghai LLC (“Mafco Shanghai”), EVD Holdings LLC (“EVD Holdings”), and Mafco Deutschland GmbH (together with Merisant, Merisant Luxembourg, Mafco Worldwide, Mafco Shanghai, and EVD Holdings,(collectively, the “Transferred Entities”“Wholesome Transaction”). Subject to the terms and conditions of the Wholesome Purchase Agreement, and as more thoroughly described therein, payment of the Earn-Out Amount, in whole or in part, is subject to Wholesome achieving certain EBITDA thresholds at or above approximately $30 million during the period beginning August 29, 2020, and ending December 31, 2021. A portion of the Earn-Out Amount (up to $27.5 million) may be paid, at the closing (the “Closing”)Company’s election, in freely tradeable, registered shares of Company common stock. Calculation of the transactions contemplated thereunder (the “Transactions”), the Sellers will sell, convey, assign, transfer and deliver to the Company (or its designee), and the Company (or its designee) will purchase, allachievement of the issued and outstanding equity interests of the Transferred Entities andEarn-Out Amount is subject to certain assets thereof, and assume certain liabilities includedadjustments more thoroughly described in the Transferred Assets and Liabilities (as definedWholesome Purchase Agreement. While the Earn-Out Amount is currently expected to be payable in the Agreement), in each instance, free and clearfirst quarter of all liens (subject to certain exceptions set forth in2022, the Agreement), in exchange, subject topayment could accelerate upon the limitations set forth below, for the Cash Consideration and the Ordinary Shares Consideration (each as defined below).Pursuant to Amendment No. 2 to the Agreement, the Company assigned its rights under the Agreement to Project Taste Intermediate LLC, a newly-formed directly wholly-owned limited liability company subsidiary of the Company, such that, following the Closing, (i) the sole asset of the Company will be its membership interest in such subsidiary, and (ii) the subsidiary will own all of the equity interests of the Transferred Entities and hold all of the Transferred Assets and Liabilities.Subject to the terms and conditions set forth in the Agreement, at the Closing, the Sellers will receive (i) $415,000,000 in cash (the “Base Cash Consideration”) (which, under certain conditions, may be reducedbreach by the Company of certain covenants more thoroughly described in the Wholesome Purchase Agreement.up to $20,000,000 immediately prior to Closing in exchangethe Amendment Agreement, the “Amended and Restated Credit Agreement”), by and among Toronto Dominion (Texas) LLC, as administrative agent, certain lenders signatory thereto and certain other parties. See “Liquidity and Capital Resources” below for a dollar-for-dollarfurther description of the Amended and Restated Credit Agreement.Ordinary Shares Consideration (as defined below))overall demand for our products and have no supply disruptions, we are unable to fully determine the future impact of COVID-19 on demand for our products or our ability to supply our products. The full extent of the impact of the COVID-19 pandemic on the Company’s operational and financial performance will depend on future developments, including the duration and spread of the pandemic and related containment and mitigation actions taken by national, state and local government officials across the world to prevent disease spread. The extent of the pandemic’s impact on us will also depend upon our employees’ ability to work safely in our facilities, our customers’ ability to continue to operate or receive our products, the ability of our suppliers to continue to operate, and the level of activity and demand for the ultimate product and services of our customers or their customers.plusin open market transactions at prevailing market prices, in privately negotiated transactions, or minus the Adjustment Amount (as definedby other means in the Agreement) (the “Cash Consideration”),accordance with U.S. federal securities laws.(ii) thatactual number of Class A ordinary shares of common stock repurchased under the Company (“Class A Ordinary Shares”) equal tostock repurchase plan will depend on a number of factors, including the highermarket price of (1) 2,500,000 or (2) the quotient of (x) the sum of $25,000,000 plus the amount, if any, by which the Base Cash Consideration is reduced by the Company in accordanceour common stock, general market and economic conditions, applicable legal requirements, compliance with the terms of our outstanding indebtedness, alternate uses for capital and other factors. There is no guarantee as to the Agreement, dividednumber of shares that will be repurchased, and the repurchase plan may be extended, suspended or discontinued at any time without prior notice at our discretion.(Successor) (Predecessor) (In thousands) Three Months Ended
March 31, 2021Three Months Ended
March 31, 2020Product revenues, net $ 105,825 $ 65,972 Cost of goods sold 70,174 40,112 Gross profit 35,651 25,860 Selling, general and administrative expenses 32,907 16,048 Amortization of intangible assets 4,151 2,534 Asset impairment charges — 40,600 Restructuring and other expenses 1,657 — Operating loss (3,064) (33,322) Change in fair value of warrant liabilities (2,362) — Interest expense, net (5,078) (172) Loss on extinguishment and debt transaction costs (5,513) — Other income, net 310 1,721 Loss before income taxes (15,707) (31,773) Benefit for income taxes (3,682) (3,118) Net loss $ (12,025) $ (28,655) (y)a $1.7 million decrease in product revenues at Flavors & Ingredients, as further described below.lowest per share pricethree months ended March 31, 2021 was $70.2 million, an increase of $30.1 million, or 74.9%, from $40.1 million for the three months ended March 31, 2020. The increase was primarily driven by $28.2 million related to the acquisitions of Wholesome and Swerve (including $0.9 million of purchase accounting adjustments related to inventory), higher volumes at which Class A Ordinary Shares are sold byBranded CPG and $0.7 million of purchase accounting adjustments related to inventory revaluations at Flavors & Ingredients.Companythree months ended March 31, 2021 were $32.9 million, an increase of $16.9 million from $16.0 million for the three months ended March 31, 2020, primarily due to any person$8.1 million of acquisition related transaction expenses, $3.7 million of selling, general and administrative expenses from the acquisitions of Wholesome and afterSwerve, $2.1 million for public company costs including both one-time costs as well as ongoing costs to operate a public company, a $1.5 million increase in bonus expense, and $1.4 million for stock-based compensation expense.datethree months ended March 31, 2021 was $4.2 million, an increase of $1.6 million, or 63.8%, from $2.5 million for the three months ended March 31, 2020 primarily due to amortization expense related to the intangible assets acquired as part of the Agreement butWholesome and Swerve acquisitions. (Successor) (Predecessor) (In thousands) Three Months Ended
March 31, 2021Three Months Ended
March 31, 2020Product revenues, net $ 81,797 $ 40,219 Operating income (loss) $ 10,159 $ (6,755) (Successor) (Predecessor) (In thousands) Three Months Ended
March 31, 2021Three Months Ended
March 31, 2020Product revenues, net $ 24,028 $ 25,753 Operating income (loss) $ 972 $ (24,010) (Successor) (Predecessor) (In thousands) Three Months Ended
March 31, 2021Three Months Ended
March 31, 2020Operating loss $ (14,195) $ (2,557) orleast the next twelve months. (Successor) (Predecessor) Three Months Ended
March 31, 2021Three Months Ended
March 31, 2020Net cash (used in) provided by operating activities $ (5,597) $ 14,610 Net cash used in investing activities (188,145) (894) Net cash provided by (used in) financing activities 204,056 (13,930) Effect of exchange rates on cash and cash equivalents 594 314 Net change in cash and cash equivalents $ 10,908 $ 100 Closing (the “Ordinary Shares Consideration”). The Agreement further provides the Company with the option, immediately prior to Closing, subject to certain conditions set forth in the Agreement and after (a) giving effect to the Private Placement (described below), any additional equity financing, and the Debt Financing (described below) and (b) taking into account all amounts held by the Company in trust, to reduce the Base Cash Consideration by the amount of funds necessary (up to $20,000,000) for the Company to pay (i) the Cash Consideration, (ii) any amounts paid in connection with the Warrant Amendment (described below), and (iii) theWholesome Transaction, Costs (as defined in the Agreement) in exchange for a dollar-for-dollar increase in the Ordinary Shares Consideration.In addition, the Agreement contemplates that immediately following the Closing, the Company’s sponsor, Act II Global LLC (the “Sponsor”), will place 2,000,000 Class A Ordinary Shares (which will be converted at Closing from Class B ordinary shares of the Company currently held by the Sponsor) (the “Escrowed Sponsor Shares”) into escrow, which will be held in escrow by the Company’s transfer agent. The Escrowed Sponsor Shares will be released to the Sponsor upon the earliest to occur of (i) the volume weighted-average per-share trading price of Class A Ordinary Shares being at or above $20.00 per share for twenty (20) trading days in any thirty (30)-trading day continuous trading period during the Escrow Period, (ii) a change in control of the Company, and (iii) 5-year anniversary of the Closing.Debt FinancingOn December 19, 2019, in connection with entering into the Agreement, the Companyon February 5, 2021, we entered into a commitment letter, as amended on May 8, 2020an amendment and restatement agreement (the “Commitment Letter”“Amendment Agreement”), with TD Securities (USA) LLC (“TDSL”), as left lead arranger and book runner, The Toronto-Dominion Bank, New York Branch (“TDNY”), and Toronto Dominion (Texas) LLC, (“TDTX”which amended and restated our existing senior secured loan agreement dated as of June 25, 2020 (as amended on September 4, 2020, the “Existing Credit Agreement,” and as further amended by the Amendment Agreement, the “Amended and Restated Credit Agreement”), by Toronto Dominion (Texas), LLC, as administrative agent. Pursuant toagent, certain lenders signatory thereto and certain other parties.Commitment Letter, TDSL agreed to arrange and TDNY committed to provide the Company with (i)following credit facilities: (a) a senior secured term loan facility in the aggregate principal amount of $375 million (the “Term Loan Facility”); and (b) a revolving credit facility in an aggregate principal amount of up to $185,000,000 (the “Term Facility”) and (ii) a senior secured revolving credit facility of up to $50,000,000$75 million (the “Revolving Facility,” and together with the Term Loan Facility, the “Credit Facilities”). The Revolving Facility has a $15 million sub-facility for the issuance of letters of credit and a $15 million sublimit for swing line loans. We used the proceeds ofunder the Term Loan Facility on the Closing Date (as defined in the Agreement) may be used (x) to fund the Transactions,(i) repay and (y) torefinance existing indebtedness of WSO Investments; (ii) pay the cash consideration for the Wholesome Transaction; (iii) repay and refinance outstanding borrowings under the Existing Credit Agreement; and (iv) pay fees costs and expenses incurred in connection with the Transactions. Up to $5,000,000 of the proceeds of the Revolving Facility (which may be increased) may be used on the Closing Date for general corporate purposes and to backstop or replace letters of credit.foregoing. The proceeds of the Revolving Facility after the Closing Date maycan be used to finance working capital needs, for general corporate purposes, and for working capital and general corporate purposes, including for capital expenditures. The availability ofadjustments payable under the borrowingsWholesome Purchase Agreement.isaccrue interest at a rate per annum equal to (i) with respect to the Revolving Facility and letters of credit, (A) 2.75%, in the case of base rate advances, and (B) 3.75% in the case of LIBOR advances, and (ii) with respect to the Term Loan Facility, (A) 3.50%, in the case of base rate advances, and (B) 4.50% in the case of LIBOR advances, with a LIBOR floor of 1.00% with respect to the Term Loan Facility, and 0.00% with respect to the Revolving Facility and letters of credit, and base rate based on the highest of the prime rate, the federal funds rate plus 0.50%, LIBOR for a one-month interest period plus 1.00%, and with respect to the Revolving Facility and letters of credit, 0.00%, or with respect to the Term Loan Facility, 2.0%, and undrawn amounts under the Revolving Facility will accrue a commitment fee at a rate per annum equal to 0.50% on the average daily undrawn portion of the commitments thereunder. As of March 31, 2021, there were $2.1 million of outstanding letters of credit that reduced our availability under the revolving credit facility. Our unamortized debt issuance costs related to the revolving credit facility were $2.1 million as of March 31, 2021 and are included in other assets in the condensed consolidated balance sheet.satisfaction ofability to reinvest such proceeds and certain customary conditions, including the consummationother exceptions, (ii) 100% of the Transactions.Private Placement TransactionsIn connectionnet cash proceeds of any debt incurrence, other than debt permitted under the definitive agreements (but excluding debt incurred to refinance the Credit Facilities) and (iii) 50% of “Excess Cash Flow,” as defined in the Amended and Restated Credit Agreement, with a reduction to 25% if the foregoing Agreement, on February 12, 2020,total net leverage ratio for the Company entered into subscription agreements with certain investors (collectively,fiscal year is less than or equal to 3.50 to 1.00 but greater than 3.00 to 1.00, and a reduction to 0% if the “Private Placement Investors”) pursuanttotal net leverage ratio for the fiscal year is less than or equal to which, among other things, such investors agreed3.00 to subscribe for and purchase, and the Company agreed1.00. We are also required to issue and sellmake quarterly amortization payments equal to such investors, 7,500,0000.25% per annum of the Company’s Class A ordinary shares, par value $0.0001 (the “Class A Ordinary Shares”)original principal amount of the Term Loan Facility (subject to reductions by optional and warrants representingmandatory prepayments of the right to purchase 2,631,750 Class A Ordinary Shares (the “Warrants”) for gross proceedsloans).approximately $75,000,000 (the “Private Placement”). The Company granted certain customary registration rights to the Private Placement Investors.The Class A Ordinary Shares and Warrants to be offered and solddate of the amendment of the credit facilities, the aggregate unamortized debt issuance costs totaled $6.2 million, of which $4.4 million were expensed as a loss on extinguishment of debt. Additionally, in connection with the Private Placement have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act and/or Regulation D or Regulation S promulgated thereunder without any form of general solicitation or general advertising. The Private Placement is contingent upon, among other things, the closing of the Transactions. The proceeds from the Private Placement will be used to fund a portion of the Aggregate Cash Obligations (as defined under the Agreement) for the Transactions.In connection with the above agreements, the Company has agreed to put forth a proposal to the Company’s public warrant holders to considerAmended and vote upon an amendment (the “Warrant Amendment”) to the existing warrant agreement that governs all of the Company’s outstanding warrants to provide that, immediately prior to the Closing, (i) each of the Company’s outstanding warrants, which currently entitle the holder thereof to purchase one Class A Ordinary Share at an exercise price of $11.50 per share, will become exercisable for one-half of one share at an exercise price of $5.75 per one-half share ($11.50 per whole share) and (ii) each holder of a warrant will receive, for each such warrant, a cash payment of $0.75 (although the holders of the Private Placement warrants have waived their rights to receive such payment).Sponsor Support AgreementIn connection with theRestated Credit Agreement, the Company the Sponsor, and the Sellers entered into a Sponsor Support Agreement on December 19, 2019, as amended on February 12, 2020 (the “Sponsor Support Agreement”), pursuant to which the Sponsor agreedpaid fees to certain covenantslenders of $3.8 million, which are considered debt discount, all of which were deferred, and agreements relatedincurred transaction costs of $8.9 million, of which $7.8 million was deferred and $1.1 million was expensed as part of loss on extinguishment and debt transaction costs.the Transactions, particularly with respect to taking supportive actions to consummate the Transactionshave a current or future material effect on its financial condition, changes in financial condition, income or expenses, results of operations, liquidity, capital expenditures or capital resources.to designate twointerest as of March 31, 2021, which were materially affected by the Sellers’ directors to the board of directors of the Company, to be effective at the Closing. In addition, the Sponsor irrevocably waived its anti-dilution protections under the Company’s Amended and Restated MemorandumCredit Agreement, as further described under Indebtedness (in thousands):Payments Due for the 12-Month Period Ended March 31, Total 2022 2023 2024 2025 2026 Thereafter Debt $ 400,000 $ 3,750 $ 3,750 $ 3,750 $ 3,750 $ 28,750 $ 356,250 Interest on debt 143,495 21,816 21,610 21,457 21,296 20,835 36,481 Total $ 543,495 $ 25,566 $ 25,360 $ 25,207 $ 25,046 $ 49,585 $ 392,731 Articles of Association in connection with any new issuances of Ordinary Shares.In accordance with the terms of the Sponsor Support Agreement, the Sponsor will forfeit (i) 3,000,000 Class B ordinary shares of the Company;Recently Issued Accounting Pronouncements(ii) 6,750,000 warrants to purchase Class A Ordinary Shares at a price of $11.50 per share (the “Founder Warrants”) immediately following the Closing; and the Sponsor has waived any rights that it might otherwise have to receive any cash payment with respect to its Founder Warrants.Registration StatementIn connection with the proposed business combination and warrant amendment, the Company filed a Registration Statement on Form S-4 with the SEC, which was declared effective on May 13, 2020. The definitive proxy statement/prospectus is first being mailed to the Company’s shareholders and warrant holders on or about May 15, 2020.Results of OperationsWe have neither engaged in any operations nor generated any revenues to date. Our only activities from inception through March 31, 2020 were organizational activities, those necessary to preparecombined financial statements for the Initial Public Offering, described below, the Company’s search for a target business with which to complete a Business Combination and activities in connection with the proposed Transactions. We do not expect to generate any operating revenues until after the completion of our initial Business Combination. We generate non-operating income in the form of interest income on marketable securities. We are incurring expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses in connection with completing a Business Combination.For the three months ended March 31, 2020, we had net income2021 for discussion of $179,260, which consistsour accounting policy regarding the accounting for Private Warrants.interest income on marketable securities heldour accounting policy for Private Warrants, there have been no changes to critical accounting policies and estimates from those disclosed in the Trust Account of $754,199, offset by operating costs of $574,939.For the three months ended March 31, 2019, we incurred a net loss of $15,517, which consisted of operating costs.In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which hasour audited consolidated and is continuing to spread throughout China and other parts of the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern.” On January 31, 2020, U.S. Health and Human Services Secretary Alex M. Azar II declared a public health emergencycombined financial statements for the United States to aid the U.S. healthcare community in responding to COVID-19, and on March 11, 2020 the World Health Organization characterized the outbreak as a “pandemic”. Since the outbreak of the virus, the United States has imposed a travel ban on certain countries in Europe and Asia. On March 20, 2020, President Trump imposed additional travel restrictions, including the closure of both the Canadian and Mexican borders to any non-essential travel. A significant outbreak of COVID-19 and other infectious diseases could result in a widespread health crisis that could adversely affect the economies and financial markets worldwide, and the business of any potential target business with which we consummate a business combination could be materially and adversely affected. 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.Liquidity and Capital ResourcesUntil the consummation of the Initial Public Offering, the Company’s only source of liquidity was an initial purchase of ordinary shares by the Sponsor and loans from our Sponsor.On April 30, 2019, we consummated the Initial Public Offering of 30,000,000 Units, inclusive of the underwriters’ election to partially exercise their option to purchase an additional 3,900,000 Units, at a price of $10.00 per Unit, generating gross proceeds of $300,000,000. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 6,750,000 Private Placement Warrants to the Sponsor at a price of $1.00 per warrant, generating gross proceeds of $6,750,000.Following the Initial Public Offering and the sale of the Private Placement Warrants, a total of $300,000,000 was placed in the Trust Account. We incurred $16,614,355 in transaction costs, including $5,220,000 of underwriting fees, $11,280,000 of deferred underwriting fees and $114,355 of other costs.For the three monthsfiscal year ended March 31, 2020, cash used in operating activities was $422,635. Net income of $179,260 was impacted by interest earned on marketable securities held in the Trust Account of $754,199, amortization of right of use asset of $33,878 and changes in operating assets and liabilities, which provided $118,426 of cash.As of March 31, 2020, we had cash and marketable securities held in the Trust Account of $305,037,224. We may withdraw interest to pay our income taxes, if any. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (which interest shall be net of taxes payable and excluding deferred underwriting fees) to complete our Business Combination. To the extent that our share capital is used, in whole or in part, as consideration to complete a Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.As of March 31, 2020, we had cash of $583,196. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and complete a Business Combination.In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we would repay such loaned amounts. In the event that a 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 $1.00 per warrant unit at the option of the lender. The warrants would be identical to the Private Placement Warrants.We will need to raise additional capital through loans or additional investments from our Sponsor, officers, directors, or third parties. Our officers, directors and Sponsor may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet our working capital needs. Accordingly, we may not be able to obtain additional financing. If we are unable to raise additional capital, we may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. We cannot provide any assurance that new financing will be available to us on commercially acceptable terms, if at all. These conditions raise substantial doubt about our ability to continue as a going concern.Off-balance sheet financing arrangementsWe have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of MarchDecember 31, 2020. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.Contractual obligationsWe do not have any long-term debt, capital lease obligations, or long-term liabilities, other than: (a) an agreement to pay the Sponsor a monthly fee of $10,000 for office space,For information regarding our critical accounting policies and administrativeaccounting pronouncements, see our unaudited condensed consolidated and support services, provided to the Company. We began incurring these fees on April 25, 2019 and will continue to incur these fees monthly until the earlier of the completion of a Business Combination and the Company’s liquidation; and (b) a sub-lease agreement providing the Company with office space. The sub-lease provided that the Company’s occupancy begins January 2020 with monthly rental payments of $19,000 commencing May 1, 2020. The sub-lease terminates on July 13, 2021.The underwriters are entitled to a deferred fee of $11,280,000. The deferred fee will be forfeited by the underwriters solely in the event that we fail to complete a Business Combination, subject to the terms of the underwriting agreement.19Critical Accounting PoliciesThe preparation of condensedcombined financial statements and the related disclosures in conformity with accounting principles generally accepted in the United States of America requires managementnotes to make estimatesthose statements included under Item 1. hereof and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:Ordinary shares subject to redemptionWe account for our ordinary shares subject to possible conversion in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. Our ordinary shares feature certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ equity section of our condensed balance sheets.Net income (loss) per ordinary shareWe apply the two-class method in calculating earnings per share. Ordinary shares subject to possible redemption, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic net income (loss) per ordinary share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. Our net income is adjusted for the portion of income that is attributable to ordinary shares subject to redemption, as these shares only participate in the earnings of the Trust Account and not our income or losses.Recent accounting pronouncementsManagement does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect2020 Annual Report on our condensed financial statements.ITEMQUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKAs of March 31, 2020, we were not subject to any market or interest rate risk. Following the consummation of our Initial Public Offering, the net proceeds of our Initial Public Offering, including amounts in the Trust Account, have been invested in U.S. government treasury bills, notes or bonds with a maturity of 180 days or less or in certain money market funds that invest solely in U.S. treasuries. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.ITEMCONTROLS AND PROCEDURESrequiredof the end of the period covered by Rules 13a-15 and 15d-15this Quarterly Report on Form 10-Q, we conducted an evaluation, under the Exchange Act,supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2020. Based upon their evaluation, our(as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). The Company’s management and the Chief Executive Officer and Chief Financial Officer concluded that ourthe Company’s disclosure controls and procedures (as definedwere not effective as of March 31, 2021 in Rules 13a-15 (e)providing them with material information relating to the Company and 15d-15 (e)its consolidated subsidiaries required to be disclosed in the reports we file or submit under the Securities Exchange Act) were effective.ChangesAct of 1934, as amended.Internal Control Over Financial ReportingDuring the most recently completed fiscal quarter,SEC’s Staff Statement of April 12, 2021 in which the SEC staff clarified its interpretations of certain generally accepted accounting principles related to certain terms common in warrants issued by Special Purpose Acquisition Companies (“SPACs”), the Company determined that the Private Warrants should be treated as derivative liabilities rather than as components of equity, as previously presented. We identified a material weakness in our controls over the accounting for warrants. The Company’s controls to evaluate the accounting for complex financial instruments, such as the issuance of warrants, did not operate effectively to appropriately apply the provisions of ASC 815-40. This material weakness did not result in a material error in our accounting for warrants. However, it was determined that there has been no changewas a reasonable possibility that the error could have resulted in a material amount. Based on our assessment, management concluded that, as of March 31, 2021, our internal control over financial reporting was not effective.hasour internal controls are operating effectively. While management believes that the remedial efforts will resolve the identified material weakness, there is no assurance that management’s remedial efforts conducted to date will be sufficient or that additional remedial actions will not be necessary.isare reasonably likely to materially affect, our internal control over financial reporting.ITEMLEGAL PROCEEDINGS.We are from timeLegal Proceedings.time subject to various claims, lawsuits and other legal and administrative proceedings arising“Part I. Item 3. Legal Proceedings” in our Annual Report on Form 10-K for the ordinary course of business. Some of these claims, lawsuits and other proceedings may involve highly complex issues that are subject to substantial uncertainties, and could result in damages, fines, penalties, non-monetary sanctions or relief. However, we do not consider any such claims, lawsuits or proceedings that are currently pending, individually or in the aggregate, to be material to our business or likely to result in a material adverse effect on our future operating results, financial condition or cash flows.Elstein v. Simon et al., Index No. 603599/year ended December 31 2020 (Nassau Cnty. Mar. 6, 2020). By complaint filed March 6, 2020, a shareholder brought an individual and derivative suit with respect to the Business Combination. The plaintiff brings three derivative claims under Cayman Islands law: (I) breaches of fiduciary duties as to the individual director defendants; (II) failure to disclose materialfor additional information regarding the Business Combination as to the individual director defendants; and (III) aiding and abetting director defendants’ breaches of fiduciary duties as to Flavors Holdings, also named as a defendant. The plaintiff alleges that the individual defendants breached their fiduciary duties by acting in their own self-interest in causing or facilitating the Business Combination agreement, that Flavors Holdings aided and abetted such breaches, and that such conflicts of interest and breaches, and other allegedly material information, were not disclosed to shareholders. The plaintiff also brings one direct negligent misrepresentation claim under New York common law alleging that the proxy statement filed on February 14, 2020, soliciting the shareholder vote contained false and misleading statements and omissions. We believe that these claims are without merit and will defend against them vigorously.ITEMRISK FACTORS.FactorsRisk Factors.could causemay materially affect our actual results to differ materially from thosebusiness. The materialization of any risks and uncertainties identified in forward-looking statements contained in this Quarterly Report include the risk factors describedreport together with those previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019 filed2020 and our other filings with the SEC or those that are presently unforeseen could result in significant adverse effects on March 30, 2020. Asour financial condition, results of the dateoperations and cash flows. See “Part 1, Item 2. Management’s Discussion and Analysis of this Quarterly Report, thereFinancial Condition and Results of Operations—Forward-looking Statements.” There have been no material changes toin the risk factors previously disclosed in ourthe section entitled “Item 1A-Risk Factors” of the Annual Report filedon Form 10-K for the year ended December 31, 2020, including the risk factors incorporated by reference therein, other than those listed in this section.SEC.Business Combination. Based on the material weakness, management concluded that, as of March 31, 2021, our internal control over financial reporting was not effective and our disclosure controls and procedures were not effective.ITEMUNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.ITEMDEFAULTS UPON SENIOR SECURITIES.ITEMMINE SAFETY DISCLOSURES.ITEMOTHER INFORMATION.ITEMEXHIBITS.*Filed herewith.**Furnished.(1)Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed by the Company with the SEC on February 13, 2020(2)Incorporated (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed by the Company with the SEC on February 13, 2020.8, 2021)(3)10.2*+Incorporated31.1* 31.2* 32.1** 32.2** 101.INS* XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL Document 101.SCH* XBRL Taxonomy Extension Schema Document 101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF* XBRL Taxonomy Extension Definition Linkbase Document 101.LAB* XBRL Taxonomy Extension Labels Linkbase Document 101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document 104* The cover page for the Company’s CurrentQuarterly Report on Form 8-K, filed by the Company with the SEC on February 13, 2020.10-Q has been formatted in Inline XBRL and contained in Exhibit 101(4)Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed by the Company with the SEC on May 11, 2020.(5)* Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed by the Company with the SEC on May 1, 2019.Filed herewith.(6)**Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed by the Company with the SEC on May 11, 2020.Furnished herewith.+ Indicates a management or compensatory plan ACT II GLOBAL ACQUISITION CORP.Whole Earth Brands, Inc. /s/ Albert Manzone Date: May 15, 202014, 2021Name: /s/ John CarrollAlbert ManzoneName:Title: John CarrollTitle:Chief Executive Officer (Principal Executive Officer) /s/ Andrew Rusie Date: May 15, 202014, 2021Name: /s/ Ira J. LamelAndrew RusieName:Title:Ira J. LamelTitle:Chief Financial Officer (Principal Financial and Accounting Officer) 22