Exhibit (a)(5)(vii)
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
Defined terms included below have the same meaning as terms defined and included elsewhere in this Tender Offer Statement, unless defined below. As used in this unaudited pro forma combined financial information, “dMY VI” refers to dMY Technology Group, Inc. VI and “Rainwater Tech” refers to Rain Enhancement Technologies, Inc., prior to the Business Combination.
The unaudited pro forma combined financial information has been prepared in accordance with Article 11 of Regulation S-X and presents the combination of the historical financial information of dMY VI and Rainwater Tech, adjusted to give effect to the Business Combination and the other events contemplated by the Share Purchase Agreement.
The unaudited pro forma combined financial statements are based on the dMY VI’s and Rainwater Tech’s historical financial statements, as adjusted to give effect to the business combination under the acquisition method of accounting in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”). The unaudited pro forma combined statement of operations for the year ended December 31, 2022 gives effect to the business combination as if it had occurred on January 1, 2022, the beginning of the earliest period presented. The unaudited pro forma combined balance sheet as of December 31, 2022 gives effect to the business combination as if it had been consummated on December 31, 2022. The business combination will be accounted for as an acquisition under ASC 805, pursuant to which dMY VI will be treated as the accounting acquirer and Rainwater Tech as the acquiree. This determination was primarily based on existing dMY VI shareholders maintaining voting control of the Combined Company.
The unaudited pro forma combined financial information and accompanying notes have been derived from and should be read in conjunction with:
• | the historical audited financial statements of dMY VI as of December 31, 2022 and for the year ended December 31, 2022 and the related notes, as restated, which are included in dMY VI’s Annual Report on Form 10-K/A filed with the SEC on March 24, 2023 (the “dMY VI 2022 10-K/A”), which are included elsewhere in this Tender Offer Statement; |
• | the historical audited financial statements of Rainwater Tech as of December 31, 2022 and for the period from November 10, 2022 (inception) through December 31, 2022 and the related notes, which are included elsewhere in this Tender Offer Statement; |
• | other information relating to dMY VI and Rainwater Tech contained in this Tender Offer Statement, including the Share Purchase Agreement and the description of certain terms thereof. |
The unaudited pro forma combined financial information should also be read together with the sections of the dMY VI restated audited annual financial statements as of December 31, 2022, the financial statements of Rainwater Tech as of December 31, 2022 and the section of this Tender Offer Statement entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as other financial information included elsewhere in this Tender Offer Statement.
Share Purchase Agreement
Pursuant to the Share Purchase Agreement, at the closing of the transactions (the “Transactions”) contemplated thereby (i) the Sellers will sell and transfer to the Purchaser 1,700 shares of common stock of Rainwater Tech (the “Transferred Equity Interests”) , each share of which is exchanged for 100 shares of Class A Common Stock of dMY VI and $790 in cash per share of common stock of Rainwater Tech and (ii) Rainwater Tech will issue and sell and transfer to the Purchaser additional shares of common stock of Rainwater Tech (the “Issued Equity Interests”, together with the Transferred Equity Interests, the “Purchased Equity Interests”) for an aggregate
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amount of cash equal to the amount in deposit in dMY VI’s Trust Account after consummation of a redemption tender offer, minus the transaction costs and expenses incurred by dMY VI and Rainwater Tech in connection with the Business Combination, plus the amount of any PIPE Investment (the “Cash Consideration”). The Transaction is fully disclosed in the Current Report on Form 8-K filed with the SEC on December 22, 2022.
Business Combination Consideration
Each of the 1,700 shares of Rainwater Tech common stock will be exchanged for 100 dMY VI shares of Common Stock and $790 in cash per share. dMY VI will issue 170,000 (1,700 Rainwater Tech shares * 100) dMY VI shares of Common Stock, which for purposes of the Share Purchase Agreement was valued at $10.00 per share, or $1.7 million and $1.3 million (1,700 Rainwater Tech shares * $790) in cash.
Accounting for the Business Combination
Under the acquisition method of accounting, the acquired tangible and intangible assets and assumed liabilities are recognized based on their estimated fair values as of the business combination closing date. The pro forma adjustments are preliminary and based on estimates of the fair value and useful lives of the assets acquired and liabilities assumed as of December 31, 2022 and have been prepared to illustrate the estimated effect of the business combination.
dMY VI may recognize a deferred tax benefit as a result of the acquisition. Due to the acquisition, a temporary difference between the book and the tax basis for the intangible assets acquired may be created resulting in a deferred tax liability and additional goodwill. No deferred tax benefit was recorded in the combined pro formas.
The purchase price allocation is dependent upon certain valuation and other studies that have not yet been completed. Accordingly, the pro forma purchase price allocation is subject to further adjustments as additional information becomes available and as additional analyses and final valuations are conducted following the completion of the business combination. There can be no assurances that these additional analyses and final valuations will not result in significant changes to the estimates of fair value set forth below.
The following is the preliminary estimate of the fair value of the assets acquired, liabilities assumed, and ensuing goodwill identified, reconciled to the purchase price transferred:
Cash | $ | 100,000 | ||
Construction in-process equipment | 104,052 | |||
Intangible assets | 116,750 | |||
Accounts payable | (220,150 | ) | ||
Accrued expenses | (143,750 | ) | ||
Due to related parties | (170,386 | ) | ||
Franchise tax payable | (225 | ) | ||
Goodwill | 3,256,709 | |||
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Consideration | $ | 3,043,000 | ||
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Consideration: | ||||
170,000 dMY VI Common Shares | $ | 1,700,000 | ||
Cash | 1,343,000 | |||
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$ | 3,043,000 | |||
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The following shows the effect of a change in share price on the amount of consideration and goodwill:
Change in Stock Price | Stock Price | Consideration | Goodwill | |||||||||
10% increase | $ | 11.00 | $ | 3,213,000 | 3,426,709 | |||||||
10% decrease | $ | 9.00 | $ | 2,873,000 | 3,086,709 | |||||||
20% increase | $ | 12.00 | $ | 3,383,000 | 3,596,709 | |||||||
20% decrease | $ | 8.00 | $ | 2,703,000 | 2,916,709 | |||||||
30% increase | $ | 13.00 | $ | 3,553,000 | 3,766,709 | |||||||
30% decrease | $ | 7.00 | $ | 2,533,000 | 2,746,709 | |||||||
50% increase | $ | 15.00 | $ | 3,893,000 | 4,106,709 | |||||||
50% decrease | $ | 5.00 | $ | 2,193,000 | 2,406,709 |
dMY VI has been determined to be the accounting acquirer based on dMY VI’s existing shareholders having a majority of the voting power of the Combined Company.
Basis of Pro Forma Presentation
The unaudited pro forma combined financial information has been prepared in accordance with Article 11 of Regulation S-X. The adjustments in the unaudited pro forma combined financial information have been identified and presented to provide relevant information necessary for an illustrative understanding of the Combined Company upon consummation of the Business Combination and the other events contemplated by the Share Purchase Agreement in accordance with GAAP.
Assumptions and estimates underlying the unaudited pro forma adjustments set forth in the unaudited pro forma combined financial information are described in the accompanying notes. The unaudited pro forma combined financial information has been presented for illustrative purposes only and is not necessarily indicative of the operating results and financial position that would have been achieved had the Business Combination occurred on the dates indicated, and does not reflect adjustments for any anticipated synergies, operating efficiencies, tax savings or cost savings. Any cash proceeds remaining after the consummation of the Business Combination and the other events contemplated by the Share Purchase Agreement are expected to be used for general corporate purposes. Further, the unaudited pro forma combined financial information does not purport to project the future operating results or financial position of the Combined Company following the consummation of the Business Combination. The unaudited pro forma adjustments represent management’s estimates based on information available as of the date of the unaudited pro forma combined financial information and are subject to change as additional information becomes available and analyses are performed. dMY VI and Rainwater Tech have not had any historical relationship prior to the transactions discussed in this Tender Offer Statement. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.
The unaudited pro forma combined financial information contained herein assumes that the dMY VI shareholders approve the Business Combination. Pursuant to dMY VI’s Amended and Restated Certificate of Incorporation, the dMY VI public shareholders may elect to redeem their dMY VI shares of Common Stock upon the closing of the Business Combination for cash equal to their pro rata share of the aggregate amount on deposit (as of two business days prior to the Closing) in the dMY VI Trust Account. dMY VI cannot predict how many of its public shareholders will exercise their right to redeem their dMY VI shares of Common Stock for cash. Therefore, the unaudited pro forma combined financial information present two redemption scenarios as follows:
• | Scenario 1: Assuming No Redemptions—this scenario assumes that no public shareholders of dMY VI exercise redemption rights with respect to their public shares; and |
• | Scenario 2: Assuming Maximum Redemptions—this scenario assumes that 22,326,253 dMY VI shares of Common Stock are redeemed at approximately $10.14 per share for an aggregate payment of approximately $226.5 million (includes market appreciation and interest on the marketable securities |
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and/or balances held in the Trust Account). The maximum redemption amount is derived on the basis that the Combined Company has a minimum net tangible asset of $5,000,001, after giving effect to payments to redeeming stockholders. Scenario 2 includes all adjustments contained in Scenario 1 and presents additional adjustments to reflect the effect of the maximum redemption. |
Assuming no redemptions, the pro forma amount of cash per share of Class A Common Stock, which we calculate as the amount of pro forma cash after giving effect to the Business Combination divided by the number of shares of Class A Common Stock outstanding after giving effect to the Business Combination (but without giving effect to the exercise of any warrants, other than penny warrants on 100,000 shares of Common Stock) is US$7.73 per share. Assuming maximum redemptions, the pro forma amount of cash per share of Class A Common Stock would be US$1.11 per share.
Upon the consummation of the Offer, we plan to use the cash available from the funds held in the Trust Account to purchase the shares of Common Stock validly tendered and not properly withdrawn pursuant to the Offer, and the balance will be released to us to fund our working capital and the growth of Rainwater Tech. The trust fund balance at Closing is estimated to be approximately $247,100,000, assuming no redemptions and excluding payment of transaction expenses and Seller Cash Consideration. Assuming all of the 24,150,000 shares are tendered for redemption, the remaining balance will be further reduced to $0. dMY VI intends to enter into Subscription Agreements (as defined in the Share Purchase Agreement) with PIPE Investors, pursuant to which, among other things, the PIPE Investors will agree to purchase from dMY VI, and not in the open market, certain shares of dMY VI’s Class A Common Stock immediately prior to the consummation of the Business Combination at a cash purchase price of $10.00 per share. As of the date of this filing, the PIPE Investment process is ongoing, and dMY VI has entered into two Subscription Agreements for a total PIPE Investment of $200,000 to purchase a total of 20,000 shares of dMY VI’s Class A Common Stock, par value $0.0001 per share, at a purchase price of $10.00 per share. dMY VI intends to enter into additional PIPE Subscription Agreements with PIPE Investors in the future. There is no guarantee that additional financing will be provided and if the conditions to the Offer are not satisfied and if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001, we will not be able to access the funds held in the Trust Account and thus will need to terminate or extend the Offer. The transactions with the PIPE investors might trigger the anti-dilution provision for the conversion rights to the holder for dMY VI’s Class B Common Stock. On December 22, 2022, dMY VI entered into an agreement (the “Sponsor Support Agreement”) with the holders of dMY VI’s Class B Common Stock (the “initial shareholders”), pursuant to which the initial shareholders agreed to waive their rights to the anti-dilution adjustment for conversion ratio in connection with the Business Combination with Rainwater Tech. As a result, the Class B Common Stock will be converted into Class A Common Stock upon consummation of the transaction with Rainwater Tech on a one-for-one basis. The pro forma financial statements do not include the effect of the ongoing PIPE Investments.
The two redemption scenarios assumed in the unaudited pro forma combined balance sheet and statement of operations do not include adjustments for the outstanding warrants issued in connection with dMY VI’s initial public offering, as such securities are not exercisable until 30 days after the Closing.
The following summarizes the pro forma shares of Common Stock issued and outstanding immediately after the
Business Combination (excludes shares of Common Stock issued under PIPE Subscription Agreements):
Assuming No Redemptions | Assuming Maximum Redemptions | |||||||||||||||
Shares | % | Number | % | |||||||||||||
dMY VI Public shareholders | 24,150,000 | 79.3 | % | 1,823,747 | 22.3 | % | ||||||||||
dMY VI Founders | 6,037,500 | 19.8 | % | 6,037,500 | 74.4 | % | ||||||||||
Penny warrants | 100,000 | 0.3 | % | 100,000 | 1.2 | % | ||||||||||
Rainwater Tech equityholders | 170,000 | 0.6 | % | 170,000 | 2.1 | % | ||||||||||
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Shares outstanding | 30,457,500 | 100.0 | % | 8,131,247 | 100.0 | % | ||||||||||
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If the actual facts are different than these assumptions, then the amounts and shares outstanding in the unaudited pro forma combined financial information will be different and those changes could be material.
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UNAUDITED PRO FORMA COMBINED BALANCE SHEET
AS OF DECEMBER 31, 2022
December 31, 2022 | December 31, 2022 | Transaction Accounting Adjustments (Assuming No Redemptions) (Note 2) | Pro Forma Combined (Assuming No Redemptions) | Additional Transaction Accounting Adjustments (Assuming Maximum Redemptions) (Note 2) | Pro Forma Combined (Assuming Maximum Redemptions) | |||||||||||||||||||||||||||
dMY VI (Historical) | Rainwater Tech (Historical) | |||||||||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||||||
Current assets | ||||||||||||||||||||||||||||||||
Cash | $ | 1,128 | $ | 100,000 | $ | 244,961,644 | (a) | $ | 235,472,810 | $ | (226,462,759 | ) | (h) | $ | 9,010,051 | |||||||||||||||||
(7,951,678 | ) | (d) | ||||||||||||||||||||||||||||||
(1,343,000 | ) | (f) | ||||||||||||||||||||||||||||||
(295,284 | ) | (g) | ||||||||||||||||||||||||||||||
Prepaid expenses and other assets | 216,128 | — | — | 216,128 | — | 216,128 | ||||||||||||||||||||||||||
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Total current assets | 217,256 | 100,000 | 235,371,682 | 235,688,938 | (226,462,759 | ) | 9,226,179 | |||||||||||||||||||||||||
Marketable securities held in Trust Account | 244,961,644 | — | (244,961,644 | ) | (a) | — | — | — | ||||||||||||||||||||||||
Construction in-process equipment | — | 104,052 | — | 104,052 | — | 104,052 | ||||||||||||||||||||||||||
Intangible assets | — | 116,750 | — | 116,750 | — | 116,750 | ||||||||||||||||||||||||||
Goodwill | — | — | 3,256,709 | (f) | 3,256,709 | — | 3,256,709 | |||||||||||||||||||||||||
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Total assets | $ | 245,178,900 | $ | 320,802 | $ | (6,333,253 | ) | $ | 239,166,449 | $ | (226,462,759 | ) | $ | 12,703,690 | ||||||||||||||||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||||||||||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||||||||||
Accounts payable | $ | 683,488 | $ | 220,150 | $ | — | $ | 903,638 | $ | — | $ | 903,638 | ||||||||||||||||||||
Accounts payable—related party | 36,447 | — | — | 36,447 | — | 36,447 | ||||||||||||||||||||||||||
Accrued expenses | 2,083,531 | 143,750 | (2,083,531 | ) | (d) | 143,750 | — | 143,750 | ||||||||||||||||||||||||
Convertible working capital loans—related party | 295,284 | — | (295,284 | ) | (g) | — | — | — | ||||||||||||||||||||||||
Due to related parties | — | 170,386 | — | 170,386 | — | 170,386 | ||||||||||||||||||||||||||
Franchise tax payable | 204,456 | 225 | — | 204,681 | — | 204,681 | ||||||||||||||||||||||||||
Income tax payable | 680,665 | — | — | 680,665 | — | 680,665 | ||||||||||||||||||||||||||
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Total current liabilities | 3,983,871 | 534,511 | (2,378,815 | ) | 2,139,567 | — | 2,139,567 | |||||||||||||||||||||||||
Derivative liabilities | 2,079,550 | — | 111,110 | (c) | 2,190,660 | — | 2,190,660 | |||||||||||||||||||||||||
Deferred underwriting commissions | — | — | — | — | — | — | ||||||||||||||||||||||||||
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Total liabilities | 6,063,421 | 534,511 | (2,267,705 | ) | 4,330,227 | — | 4,330,227 | |||||||||||||||||||||||||
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Commitments and contingencies | ||||||||||||||||||||||||||||||||
Class A common shares subject to possible redemption | 243,922,084 | — | (243,922,084 | ) | (b) | — | — | — | ||||||||||||||||||||||||
Stockholders’ equity (deficit) | ||||||||||||||||||||||||||||||||
Common stock | — | — | 2,415 | (b) | 3,046 | (2,233 | ) | (h) | 813 | |||||||||||||||||||||||
631 | (f) | |||||||||||||||||||||||||||||||
Common stock—Class A | — | — | �� | — | — | — | ||||||||||||||||||||||||||
Common stock—Class B | 604 | — | (604 | ) | (f) | — | — | — | ||||||||||||||||||||||||
Additional paid-in capital | — | 1,070,125 | 243,919,669 | (b) | 245,081,374 | (226,460,526 | ) | (h) | 18,620,848 | |||||||||||||||||||||||
(1,822,102 | ) | (e) | ||||||||||||||||||||||||||||||
1,913,682 | (f) | |||||||||||||||||||||||||||||||
Accumulated deficit | (4,807,209 | ) | (1,283,834 | ) | (111,110 | ) | (c) | (10,248,198 | ) | — | (10,248,198 | ) | ||||||||||||||||||||
(5,868,147 | ) | (d) | ||||||||||||||||||||||||||||||
1,822,102 | (e) | |||||||||||||||||||||||||||||||
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Total stockholders’ equity (deficit) | (4,806,605 | ) | (213,709 | ) | 239,856,536 | 234,836,222 | (226,462,759 | ) | 8,373,463 | |||||||||||||||||||||||
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Total liabilities and stockholders’ equity (deficit) | $ | 245,178,900 | $ | 320,802 | $ | (6,333,253 | ) | $ | 239,166,449 | $ | (226,462,759 | ) | $ | 12,703,690 | ||||||||||||||||||
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UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED DECEMBER 31, 2022
Year Ended December 31, 2022 | For the Period From November 10, 2022 (Inception) Through December 31, 2022 | Transaction Accounting Adjustments (Assuming No Redemptions) (Note 2) | Year Ended December 31, 2022 | Additional Transaction Accounting Adjustments (Assuming Maximum Redemptions) (Note 2) | Year Ended December 31, 2022 | |||||||||||||||||||||||
Pro Forma Combined (Assuming No Redemptions) | Pro Forma Combined (Assuming Maximum Redemptions) | |||||||||||||||||||||||||||
dMY VI (Historical) | Rainwater Tech (Historical) | |||||||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||||
General and administrative | $ | 3,702,578 | $ | 1,283,609 | $ | 5,558,147 | (aa) | $ | 10,544,334 | $ | — | $ | 10,544,334 | |||||||||||||||
Franchise tax expenses | 203,894 | 225 | — | 204,119 | — | 204,119 | ||||||||||||||||||||||
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Total expenses | 3,906,472 | 1,283,834 | 5,558,147 | 10,748,453 | — | 10,748,453 | ||||||||||||||||||||||
Operating loss | (3,906,472 | ) | (1,283,834 | ) | (5,558,147 | ) | (10,748,453 | ) | — | (10,748,453 | ) | |||||||||||||||||
Other income (expense) | ||||||||||||||||||||||||||||
Change in fair value of derivative warrant liabilities | 23,079,950 | — | — | 23,079,950 | — | 23,079,950 | ||||||||||||||||||||||
Change in fair value of derivative liabilities -working capital loan option | 2,503 | — | — | 2,503 | — | 2,503 | ||||||||||||||||||||||
Gain from extinguishment of deferred underwriting commissions | 257,801 | — | — | 257,801 | — | 257,801 | ||||||||||||||||||||||
Interest expense | (2,787 | ) | — | — | (2,787 | ) | — | (2,787 | ) | |||||||||||||||||||
Interest income on operating account | 33 | — | — | 33 | — | 33 | ||||||||||||||||||||||
Interest income from investments held in Trust Account | 3,446,418 | — | (3,446,418 | ) | (bb) | — | — | — | ||||||||||||||||||||
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Total other income (expense) | 26,783,918 | — | (3,446,418 | ) | 23,337,500 | — | 23,337,500 | |||||||||||||||||||||
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Net income before income taxes | 22,877,446 | (1,283,834 | ) | (9,004,565 | ) | 12,589,047 | — | 12,589,047 | ||||||||||||||||||||
Income tax expense | 680,665 | — | — | 680,665 | — | 680,665 | ||||||||||||||||||||||
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Net income | $ | 22,196,781 | $ | (1,283,834 | ) | $ | (9,004,565 | ) | $ | 11,908,382 | $ | — | $ | 11,908,382 | ||||||||||||||
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Weighted average Class A common shares outstanding, basic and diluted | 24,150,000 | |||||||||||||||||||||||||||
Basic and diluted net income per Class A common share | $ | 0.74 | ||||||||||||||||||||||||||
Weighted average Class B common shares outstanding, basic and diluted | 6,037,500 | |||||||||||||||||||||||||||
Basic and diluted net income per Class B common share | $ | 0.74 | ||||||||||||||||||||||||||
Basic and diluted net loss per common share | $ | (1,485.92 | ) | |||||||||||||||||||||||||
Basic and diluted weighted average common shares outstanding | 864 | |||||||||||||||||||||||||||
Basic and diluted net income per share | $ | 0.39 | $ | 1.46 | ||||||||||||||||||||||||
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Basic and diluted weighted average shares outstanding | 30,457,500 | 8,131,247 |
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NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
1. | Basis of Presentation |
The unaudited pro forma combined financial statements are based on the dMY VI’s and Rainwater Tech’s historical financial statements, as adjusted to give effect to the business combination under the acquisition method of accounting in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”). The unaudited pro forma combined statement of operations for the year ended December 31, 2022 gives effect to the business combination as if it had occurred on January 1, 2022, the beginning of the earliest period presented. The unaudited pro forma combined balance sheet as of December 31, 2022 gives effect to the business combination as if it had been consummated on December 31, 2022. The business combination will be accounted for as an acquisition under ASC 805, pursuant to which dMY VI will be treated as the accounting acquirer and Rainwater Tech as the acquiree. This determination was primarily based on existing dMY VI shareholders maintaining voting control of the Combined Company.
The unaudited pro forma combined financial information and accompanying notes have been derived from and should be read in conjunction with:
• | the historical audited financial statements of dMY VI as of December 31, 2022 and for the year ended December 31, 2022 and the related notes, as restated, which are included in dMY VI’s Annual Report on Form 10-K/A filed with the SEC on March 24, 2023 (the “dMY VI 2022 10-K/A”), which are included elsewhere in this Tender Offer Statement; |
• | the historical audited financial statements of Rainwater Tech as of December 31, 2022 and for the period from November 10, 2022 (inception) through December 31, 2022 and the related notes, which are included elsewhere in this Tender Offer Statement; |
• | other information relating to dMY VI and Rainwater Tech contained in this Tender Offer Statement, including the Share Purchase Agreement and the description of certain terms thereof. |
The unaudited pro forma combined financial information should also be read together with the sections of the dMY VI audited annual financial statements as of December 31, 2022, the financial statements of Rainwater Tech as of December 31, 2022 and the section of this Tender Offer Statement entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as other financial information included elsewhere in this Tender Offer Statement.
dMY VI management has made significant estimates and assumptions in its determination of the pro forma adjustments. As the unaudited pro forma combined financial information has been prepared based on these preliminary estimates, the final amounts recorded may differ materially from the information presented.
The pro forma adjustments reflecting the consummation of the Business Combination are based on information available as of the date of this Offer to Purchase and certain assumptions and methodologies that management believes are reasonable under the circumstances. The unaudited pro forma adjustments, which are described in these notes, may be revised as additional information becomes available and is evaluated. Therefore, the actual adjustments may materially differ from the pro forma adjustments that appear in this Offer to Purchase. The unaudited pro forma combined financial information does not reflect the income tax effects of the pro forma adjustments as based on the statutory rate in effect for the historical periods presented, as management believes income tax adjustments to not be meaningful given the combined entity incurred significant losses during the historical periods presented. dMY VI management considers this basis of presentation to be reasonable under the circumstances.
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NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
2. | Transaction Accounting Adjustments to Unaudited Pro Forma Combined Financial Information |
Transaction Accounting Adjustments to Unaudited Pro Forma Combined Balance Sheet
The transaction accounting adjustments included in the unaudited pro forma combined balance sheet as of December 31, 2022, are as follows:
(a) Reflects the liquidation and reclassification of cash and investments held in the Trust Account (as defined in this Offer to Purchase) that became available for general corporate use following the Business Combination.
(b) Reflects the transfer of dMY VI’s shares of Class A Common Stock subject to possible redemptions as of December 31, 2022 to permanent equity.
(c) As of December 31, 2022, Rainwater Tech had a total of 1,700 shares of common stock outstanding. Represents fully vested warrants granted on 100,000 shares of common stock with an exercise price of $0.01 per share valued at approximately $111,000 as of December 31, 2022.
(d) Represents preliminary estimated transaction costs to be incurred by dMY VI and Rainwater Tech of approximately $7.9 million and $0.4 million, respectively, (together for an aggregate amount of approximately $8.3 million) for legal, financial advisory and other professional fees. The dMY VI estimated transaction costs include approximately $2.1 million in accrued expenses and approximately $0.3 million in items already paid for and recorded as of December 31, 2022.
For the Rainwater Tech transaction costs:
• | $0.4 million was reflected as a reduction of cash and an increase to accumulated deficit. |
For the dMY VI transaction costs:
• | Approximately $7.5 million was reflected as a reduction of cash, approximately $2.1 million as a reduction in accrued expenses and approximately $5.4 million increase in accumulated deficit. |
• | The amount of total estimated dMY VI transaction costs recognized by dMY VI prior to January 1, 2022 was not material and the amount recognized in 2022 was approximately $2.7 million (approximately $0.3 million was paid for in 2022). The costs expensed through accumulated deficit are included in the unaudited pro forma combined statement of operations for the period ended December 31, 2022. |
(e) Reflects the elimination of Rainwater Tech’s accumulated deficit of approximately $1.8 million to additional paid-in capital.
(f) Reflects the recapitalization of equity as a result of the Business Combination, in which 1,700 Rainwater Tech Shares and 6,037,500 shares of dMY VI’s Class B common stock will be exchange into 170,000 and 6,037,500 shares of dMY VI’s Class A common stock, respectively, and the consideration of 1)170,000 (1,700 Rainwater Tech shares * 100) dMY VI shares of Common Stock, which for purposes of the Share Purchase Agreement was valued at $10.00 per share, or $1.7 million, and $1.3 million (1,700 Rainwater Tech shares * $790) in cash.
(g) Reflects the repayment of working capital loans of approximately $295,000 as of December 31, 2022 upon closing of the Transaction. In January 2023, dMY VI received additional loan proceeds in the amount of $86,000 under the working capital loans. dMY VI also plans to repay the additional working capital loan proceeds in full upon closing of the Transaction. As a result, the additional loan proceeds and additional repayment does not have a net effect on the pro forma financial statements.
Certain of Rainwater Tech’s and dMY VI’s officers also paid an aggregate of approximately $17,000 and approximately $153,000, respectively, to cover for certain expenses and purchases on Rainwater Tech’s behalf. As of December 31, 2022, Rainwater Tech recorded the full outstanding amount of approximately $170,000 owed to such officers in due to related parties in the accompanying historical balance sheet. On February 2, 2023, Rainwater Tech issued a promissory note (the “Note”) to its CEO and certain officers of dMY VI for an aggregate amount of $600,000, of which approximately $153,000 was already lent by one of the officers of dMY VI as of December 31, 2022 as mentioned above. Rainwater Tech received the remaining cash proceeds of $447,000 under the Note in February 2023. The Note has an annual interest rate of 5% and shall be due and payable on August 1, 2023 (“Maturity Date”). Rainwater Tech plans to repay the Note in full upon its maturity date (“Maturity Date”) out of the combined entity’s operating cash account. The Company plans to consummate the Transaction prior to the Maturity Date. As a result, the unaudited pro forma combined financial statements reflect the full amount of the $170,000 due to related parties as fully outstanding.
(h) Reflects the maximum redemption of 22,326,253 dMY VI shares of Class A Common Stock at a redemption price of approximately $10.14 per share, totaling approximately $226.5 million (includes market appreciation and interest on the marketable securities and/or balances held in the Trust). The maximum redemption amount is derived on the basis that the Combined Company has a minimum net tangible asset of $5,000,001, after giving effect to payments to redeeming stockholders.
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NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
Upon the consummation of the Offer, we plan to use the cash available from the funds held in the Trust Account to purchase the shares of Common Stock validly tendered and not properly withdrawn pursuant to the Offer, and the balance will be released to us to fund our working capital and the growth of Rainwater Tech. The trust fund balance at Closing is estimated to be approximately $247,100,000, assuming no redemptions and excluding payment of transaction expenses and Seller Cash Consideration. Assuming all of the 24,150,000 shares are tendered for redemption, the remaining balance will be further reduced to $0. dMY VI intends to enter into Subscription Agreements (as defined in the Share Purchase Agreement) with PIPE Investors, pursuant to which, among other things, the PIPE Investors will agree to purchase from dMY VI, and not in the open market, certain shares of dMY VI’s Class A Common Stock immediately prior to the consummation of the Business Combination at a cash purchase price of $10.00 per share. As of the date of this filing, the PIPE Investment process is ongoing, and dMY VI has entered into two Subscription Agreements for a total PIPE Investment of $200,000 to purchase a total of 20,000 shares of dMY VI’s Class A Common Stock, par value $0.0001 per share, at a purchase price of $10.00 per share. dMY VI intends to enter into additional PIPE Subscription Agreements with PIPE Investors in the future. There is no guarantee that additional financing will be provided and if the conditions to the Offer are not satisfied and if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001, we will not be able to access the funds held in the Trust Account and thus will need to terminate or extend the Offer. The transactions with the PIPE investors might trigger the anti-dilution provision for the conversion rights to the holder for dMY VI’s Class B Common Stock. On December 22, 2022, dMY VI entered into an agreement (the “Sponsor Support Agreement”) with the holders for dMY VI’s Class B Common Stock (the “initial shareholders”), pursuant to which the initial shareholders agreed to waive their rights to the anti-dilution adjustment for conversion ratio in connection with the Business Combination with Rainwater Tech. As a result, the Class B Common Stock will be convert into Class A Common Stock upon consummation of the transaction with Rainwater Tech on a one-for-one basis. The pro forma financial statements do not include the effect of the ongoing PIPE Investments.
Transaction Accounting Adjustments to Unaudited Pro Forma Combined Statement of Operations
The transaction accounting adjustments included in the unaudited pro forma combined statement of operations for the period ended December 31, 2022 are as follows:
(aa) Reflects an adjustment for the transaction costs as if the Business Combination had been consummated on January 1, 2022. The total transaction costs of approximately $8.3 million were reduced by the following already expensed items; 1) approximately $2.1 million in accrued expenses, and 2) approximately $0.3 million in other items already paid for in 2022. The $5.6 million pro forma adjustment represents the unexpensed transaction costs of approximately $5.1 million for dMY VI and $0.4 million for Rainwater Tech. The following table shows the total unexpensed transaction costs for both dMY VI and Rainwater Tech:
Consulting | $ | 1,558,500 | ||
Legal | 1,205,127 | |||
D&O insurance | 1,200,000 | |||
Financial advisory(*) | 1,000,000 | |||
Accounting | 514,554 | |||
Regulatory fees | 79,966 | |||
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$ | 5,558,147 | |||
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* | Represent fees potentially owed to Needham & Company, LLC (“Needham”), dMY VI’s exclusive financial advisor to the Company and as its exclusive placement agent in connection with the possible Merger with Rainwater Tech. The Company agreed to pay Needham a fee to be mutually agreed upon at a later date. The unaudited combined pro forma financials reflects an estimate of $1.0 million for Needham fees. |
(bb) Reflects an adjustment to eliminate interest and other investment income related to the dMY VI Trust Account.
3. | Loss per Share |
Represents the net loss per share calculated using the historical weighted average shares of dMY VI Common Stock outstanding, and the issuance of additional shares in connection with the Business Combination and other related events, assuming the shares were outstanding since January 1, 2022. As the Business Combination and other related events are being reflected as if they had occurred at the beginning of the period presented, the calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that the shares issuable in connection with the Business Combination have been outstanding for the entire period
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NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
presented. No unexercised warrants (other than penny warrants on 100,000 shares of Common Stock) were included in the earnings per share calculation as they would be anti-dilutive.
Assuming No Redemptions | Assuming Maximum Redemptions | |||||||
Year Ended December 31, 2022 | ||||||||
Pro forma net income | $ | 11,908,382 | $ | 11,908,382 | ||||
Pro forma weighted average shares outstanding—basic and diluted | 30,457,500 | 8,131,247 | ||||||
Net income per share—basic and diluted | $ | 0.39 | $ | 1.46 | ||||
Pro Forma Weighted Average Shares | ||||||||
dMY VI Public shareholders | 24,150,000 | 1,823,747 | ||||||
dMY VI Founders | 6,037,500 | 6,037,500 | ||||||
Penny warrants | 100,000 | 100,000 | ||||||
Rainwater Tech equityholders | 170,000 | 170,000 | ||||||
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Pro forma weighted average shares outstanding, basic and diluted | 30,457,500 | 8,131,247 |
dMY VI had an aggregate of 18,905,000 warrants outstanding which had no intrinsic value and were anti- dilutive. Additionally, dMY VI had a working capital loan option value at approximately $3,000 as of December 31, 2022.
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