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☒ | QUARTERLY 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 |
Delaware | 87-3427627 | |
(State or other jurisdiction of incorporation or organization) | I.R.S. Employer Identification Number) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
None | N/A | N/A |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☐ | |||
Emerging growth company | ☒ |
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PERSHING SQUARE SPARC HOLDINGS, LTD.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2023
TABLE OF CONTENTS
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2 | ||||
3 | ||||
4 | ||||
5 | ||||
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 17 | |||
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 20 | |||
20 | ||||
22 | ||||
22 | ||||
22 | ||||
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 22 | |||
22 | ||||
22 | ||||
23 | ||||
23 | ||||
25 |
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As of September 30, 2023 (Unaudited) | As of December 31, 2022 (Audited) | |||||||
Assets | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 30,344,662 | $ | 9,887 | ||||
Prepaid expenses | 18,860 | 13,364 | ||||||
Other receivables | — | 271 | ||||||
Total Current Assets | 30,363,522 | 23,522 | ||||||
Cash held in segregated account | 5,001,000 | — | ||||||
Total Assets | $ | 35,364,522 | $ | 23,522 | ||||
Liabilities And Stockholders’ Equity/(Deficit) | ||||||||
Current Liabilities: | ||||||||
Accrued expenses | $ | 5,365,670 | $ | 734,503 | ||||
Total Current Liabilities | 5,365,670 | 734,503 | ||||||
Advisor Warrants liability | 3,000,000 | — | ||||||
Sponsor Warrants liability | 38,163,431 | — | ||||||
Total Liabilities | 46,529,101 | 734,503 | ||||||
Stockholders’ Equity/(Deficit) | ||||||||
Common Stock, $0.0001 par value; 3,000,000,000 shares authorized and 422,533 issued and outstanding at September 30, 2023; 500,000 authorized and 399,965 issued and outstanding at December 31, 2022 | 42 | 40 | ||||||
Additional paid-in capital | 4,225,288 | 3,999,610 | ||||||
Accumulated deficit | (15,389,909 | ) | (4,710,631 | ) | ||||
Total Stockholders’ Equity/(Deficit) | (11,164,579 | ) | (710,981 | ) | ||||
Total Liabilities And Stockholders’ Equity/(Deficit) | $ | 35,364,522 | $ | 23,522 | ||||
For the three months ended | For the nine months ended | |||||||||||||||
September 30, 2023 (Unaudited) | September 30, 2022 (Unaudited) | September 30, 2023 (Unaudited) | September 30, 2022 (Unaudited) | |||||||||||||
Interest income | $ | — | $ | 1 | $ | 2 | $ | 1 | ||||||||
Compensation expense from Advisor Warrants | (3,000,000 | ) | — | (3,000,000 | ) | — | ||||||||||
Legal fees | (732,453 | ) | (756,221 | ) | (2,994,149 | ) | (1,347,800 | ) | ||||||||
Accounting and tax expense | (416,000 | ) | (19,500 | ) | (544,000 | ) | (64,500 | ) | ||||||||
Printing fees | (213,804 | ) | (126,866 | ) | (413,804 | ) | (133,861 | ) | ||||||||
Other expenses | (191,864 | ) | — | (375,697 | ) | — | ||||||||||
Consulting fees | (23,225 | ) | (7,909 | ) | (1,060,025 | ) | (7,909 | ) | ||||||||
Research expense | (5,482 | ) | (2,923 | ) | (16,279 | ) | (2,923 | ) | ||||||||
Franchise tax expense | (2,167 | ) | (1,104 | ) | (4,375 | ) | (1,778 | ) | ||||||||
Income/(Loss) from ope rations | (4,584,995 | ) | (914,522 | ) | (8,408,327 | ) | (1,558,770 | ) | ||||||||
Change in fair value of Sponsor Warrants liability | (2,270,951 | ) | — | (2,270,951 | ) | — | ||||||||||
Other income/(loss) | (2,270,951 | ) | — | (2,270,951 | ) | — | ||||||||||
Net loss | $ | (6,855,946 | ) | $ | (914,522 | ) | $ | (10,679,278 | ) | $ | (1,558,770 | ) | ||||
Weighted average common shares outstanding, basic and diluted | 422,533 | 201,630 | 413,688 | 108,011 | ||||||||||||
Basic and diluted net loss per common share | $ | (16.23 | ) | $ | (4.54 | ) | $ | (25.81 | ) | $ | (14.43 | ) | ||||
Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total Stockholders’ Equity/(Deficit) | |||||||||||||||||
Shares | Amount | |||||||||||||||||||
Balance – December 31, 2022 (Audited) | 399,965 | $ | 40 | $ | 3,999,610 | $ | (4,710,631 | ) | $ | (710,981 | ) | |||||||||
Issuance of Common Stock to Sponsor | 22,568 | 2 | 225,678 | — | 225,680 | |||||||||||||||
Net loss | — | — | — | (3,823,332 | ) | (3,823,332 | ) | |||||||||||||
Balance – June 30, 2023 (Unaudited) | 422,533 | 42 | 4,225,288 | (8,533,963 | ) | (4,308,633 | ) | |||||||||||||
Net loss | — | — | — | (6,855,946 | ) | (6,855,946 | ) | |||||||||||||
Balance –September 30, 2023 (Unaudited) | 422,533 | $ | 42 | $ | 4,225,288 | $ | (15,389,909 | ) | $ | (11,164,579 | ) | |||||||||
Balance – December 31, 2021 (Audited) | 23,660 | $ | 2 | $ | 236,598 | $ | (1,987,283 | ) | $ | (1,750,683 | ) | |||||||||
Issuance of Common Stock to Sponsor | 173,528 | 18 | 1,735,262 | — | 1,735,280 | |||||||||||||||
Net loss | — | — | — | (644,248 | ) | (644,248 | ) | |||||||||||||
Balance – June 30, 2022 (Unaudited) | 197,188 | 20 | 1,971,860 | (2,631,531 | ) | (659,651 | ) | |||||||||||||
Issuance of Common Stock to Sponsor | 81,729 | 8 | 817,282 | — | 817,290 | |||||||||||||||
Net loss | — | — | — | (914,522 | ) | (914,522 | ) | |||||||||||||
Balance – September 30, 2022 (Unaudited) | 278,917 | $ | 28 | $ | 2,789,142 | $ | (3,546,053 | ) | $ | (756,883 | ) | |||||||||
For the nine months ended | ||||||||
September 30, 2023 (Unaudited) | September 30, 2022 (Unaudited) | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (10,679,278 | ) | $ | (1,558,770 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Compensation expense from Advisor Warrants | 3,000,000 | — | ||||||
Change in fair value of Sponsor Warrants liability | 2,270,951 | — | ||||||
(Increase)/decrease in operating assets: | ||||||||
Prepaid expenses | (5,496 | ) | (18,852 | ) | ||||
Other receivables | 271 | 175 | ||||||
Increase/(decrease) in operating liabilities: | ||||||||
Accrued expenses | 4,631,167 | (974,794 | ) | |||||
Net cash used in operating activities | (782,385 | ) | (2,552,241 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from sales of Common Stock to Sponsor | 225,680 | 2,552,570 | ||||||
Proceeds from sale of Sponsor Warrants to Sponsor | 35,892,480 | — | ||||||
Net cash provided by financing activities | 36,118,160 | 2,552,570 | ||||||
Net change in cash and cash equivalents and cash held in segregated account | 35,335,775 | 329 | ||||||
Cash and cash equivalents and cash held in segregated account—beginning of period | 9,887 | 9,825 | ||||||
Cash and cash equivalents and cash held in segregated account—end of period | $ | 35,345,662 | $ | 10,154 | ||||
Level 1: | Inputs are unadjusted quoted prices in active markets. | |||
Level 2: | Inputs (other than quoted prices included in Level 1) are obtained directly or indirectly from observable market data at the measurement date. | |||
Level 3: | Inputs, including significant unobservable inputs, reflect the Company’s best estimate of what market participants would use in pricing the assets and liabilities at the measurement date. |
Description | Level | Fair Value | ||||||
Liabilities: | ||||||||
Sponsor Warrants | 3 | $ | 38,163,431 | |||||
SPARs | 3 | — | ||||||
Forward Purchase Agreements | 3 | — |
Description | As of December 31, 2022 | Issuance Cost | Change in Fair Value | As of September 30, 2023 | ||||||||||||
Sponsor Warrants | $ | — | $ | 35,892,480 | $ | 2,270,951 | $ | 38,163,431 | ||||||||
SPARs | — | — | — | — | ||||||||||||
Forward Purchase Agreements | — | — | — | — | ||||||||||||
Total | $ | — | $ | 35,892,480 | $ | 2,270,951 | $ | 38,163,431 | ||||||||
Sponsor Warrants | Inputs | |||
Volatility | 25 | % | ||
Probability of Not Completing a Deal | 30 | % | ||
Expected Time to Complete a Deal (in years) | 5 | |||
Probability of Warrant Renegotiation | 30 | % | ||
Estimated Target Equity Value | $ | 4,524.3 million |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
References in this report (the “Quarterly Report”) to “we,” “us”, “our” or the “Company” refer to Pershing Square SPARC Holdings, Ltd., and references to our “management” or our “management team” refer to our officers and directors. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements, other than statements of historical facts, and including but not limited to statements regarding the Company or the Company’s management team’s expectations, hopes, beliefs, intentions or strategies regarding the future, included in this Quarterly Report that address activities, events or developments that the Company expects or anticipates will or may occur in the future are forward-looking statements. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond the Company’s control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Information concerning these and other factors can be found in the Company’s filings with the SEC, including those set forth in the Risk Factors section of the Company’s final Prospectus. Copies are available on the SEC’s website, www.sec.gov. In light of the significant uncertainties in forward-looking statements, you should not regard such statements as a representation or warranty that the Company will achieve its objectives and plans in any specified timeframe, or at all, and you should not place undue reliance on any forward-looking statements. The Company disclaims any intention or obligation to update or revise any forward-looking statements, except as may be required by law.
Overview
We were incorporated as a Delaware corporation on November 3, 2021 and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We intend to effectuate our Business Combination using cash from the proceeds of the exercise of our SPARs and the private placements of the Sponsor Shares, Sponsor Warrants, Forward Purchase Shares, or a combination of cash, stock and debt.
The issuance of additional shares in a Business Combination, including the Forward Purchase Shares:
• | may significantly dilute the equity interest that exercising SPAR holders would have otherwise obtained; |
• | may subordinate the rights of holders of our Common Stock if preferred shares are issued with rights senior to those afforded our Common Stock; |
• | could cause a change in control if a substantial number of ordinary or preferred 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 directors and officers; |
• | 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 SPARs and, following our Business Combination, our Common Stock. |
Similarly, if we issue debt instruments or otherwise incur significant debt to banks or other lenders or owners of a target, it could result in:
• | default and foreclosure on our assets if our operating revenues after our Business Combination are insufficient to repay our debt obligations; |
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• | 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 Common Stock; |
• | using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Common Stock if declared, our ability to pay expenses, make capital expenditures and acquisitions, and fund 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; |
• | limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, and 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 raise capital, including through the exercise of our SPARs and the sale of Forward Purchase Shares, or to complete our Business Combination will be successful.
Results of Operations
All activities through September 30, 2023 were related to the Company’s organizational activities, preparation for, and the distribution of, SPARs, and searching for a Business Combination. We will not generate any operating revenues until after the completion of our Business Combination. We may generate non-operating income in the form of interest income on cash and cash equivalents held. There has been no significant change in our financial or trading position and no material adverse change has occurred since the date of our audited financial statements. We will incur substantially increased expenses in future periods as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.
For the three months ended September 30, 2023, we had a net loss of $6,855,946, which consisted of (i) non-cash loss related to change in the fair value of the Sponsor Warrants liability of $2,270,951, (ii) non-cash loss related to compensation expense from the Advisor Warrants liability of $3,000,000 and (iii) accounting, franchise tax, legal, printing, research, and other expenses totaling $1,584,995. For the three months ended September 30, 2022, we had a net loss of $914,522 offset by interest income, which consisted solely of accounting, consulting, franchise tax, legal, printing, research, and other expenses totaling $914,523.
For the nine months ended September 30, 2023, we had a net loss of $10,679,278 offset by interest income, which consisted of (i) non-cash loss related to change in the fair value of the Sponsor Warrants liability of $2,270,951, (ii) non-cash loss related to compensation expense from the Advisor Warrants liability of $3,000,000 and (iii) accounting, franchise tax, legal, printing, research, and other expenses totaling $5,408,329. For the nine months ended September 30, 2022, we had a net loss of $1,558,770 offset by interest income, which consisted solely of accounting, consulting, franchise tax, legal, printing, research, and other expenses totaling $1,558,771.
Liquidity and Capital Resources
Our liquidity needs have been satisfied by the sale of $4,225,330 of Sponsor Shares and the sale of $35,892,480 Sponsor Warrants to the Sponsor in private placements. As of September 30, 2023, we had a cash balance of $30,344,662 in the operating account, after funding $5,001,000 to the Segregated Account. We will hold these funds in cash.
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We will use these funds primarily to pay ongoing expenses and director compensation and to identify and evaluate target businesses, perform 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, and structure, negotiate and complete a Business Combination.
We intend to use substantially all of the funds provided by the exercise of our SPARs to complete our Business Combination. To the extent that our capital stock or debt financing is used, in whole or in part, as consideration to complete our Business Combination, the remaining proceeds from the exercise of SPARs, and any remaining proceeds from the sale of Forward Purchase Shares, will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
In order to fund working capital deficiencies or finance transaction costs in connection with an intended Business Combination, our Sponsor may, but is not obligated to, purchase additional Sponsor Shares.
If our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating our Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our Business Combination. Moreover, we may need to obtain additional financing to complete our Business Combination if the cash consideration to be paid exceeds our capital available, including because a lower-than-expected number of SPAR holders choose to exercise their SPARs or because an insufficient amount of Additional Forward Purchase Shares are purchased. In such case, we may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our Business Combination. If we are unable to complete our Business Combination because we do not have sufficient funds available to us, we may be forced to cease operations. In addition, following our Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
Contractual Obligations
We do not have any long-term debt, capital lease obligations or operating lease obligations as of September 30, 2023.
Critical Accounting Policies
The preparation of the unaudited financial statements and related disclosures in conformity with GAAP requires management to make estimates 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:
Advisor Warrants Liability
The Advisor Warrants were issued at no cost to our advisory board members. Accordingly, we account for the Advisor Warrants under ASC 718 as the instruments were issued in connection with services provided towards our operations and potential Business Combination by the advisory board. The Advisor Warrants have a settlement feature whereby we or our Sponsor have the option to purchase the warrant from the holder upon the termination of their services for $1,000,000. The settlement feature results in liability classification at the Advisor Warrants repurchase price on grant date. Upon the consummation of our Business Combination (or vesting date), the outstanding liability will be measured at fair value.
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Sponsor Warrants Liability
We account for the Sponsor Warrants pursuant to applicable guidance in ASC 480 and ASC 815-40, under which the Sponsor Warrants do not meet the criteria for equity treatment because the number of underlying Public Shares for which the Sponsor Warrants are exercisable is dependent upon the number of Public Shares outstanding immediately following the consummation of our Business Combination along with the amount of funds raised in connection therewith. Accordingly, the Sponsor Warrants’ fair value at initial measurement was recorded as a derivative liability, and subsequent changes in fair value will be reflected on the statement of operations at each reporting period. The fair value of the Sponsor Warrants is measured using a Black-Scholes option pricing model and the Sponsor Warrants’ classification will be re-assessed at the end of each reporting period.
SPARs and Forward Purchase Agreement Liabilities
We account for the SPARs and the Forward Purchase Agreements in accordance with the guidance contained in ASC 480 and ASC 815-40. Under this guidance, we have determined that the SPARs and the Forward Purchase Agreements do not meet the criteria for equity treatment and will be recorded as derivative liabilities. Upon issuance, we recorded the initial fair value of the SPARs and Forward Purchase Agreements as expenses because such instruments were distributed to parties other than shareholders and accordingly may not be recognized as dividends under ASC 505, Equity. These liabilities will subsequently be measured at fair value with changes in fair value reflected on the statement of operations at each reporting period. The classification of these instruments, including whether such instruments should be recorded as liabilities or as equity, will be re-assessed at the end of each reporting period.
Off-Balance Sheet Arrangements
As of September 30, 2023, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.
Recent Accounting Pronouncements
In June 2022, the FASB issued ASU 2022-03, Fair Value Measurements (Topic 820); Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, which clarifies the guidance on fair value measurements in Topic 820 of an equity security that is subject to contractual sale restrictions and which requires specific disclosures related to that security. This standard is effective for public entities for interim and annual periods beginning after December 15, 2023 and non-public entities beginning after December 15, 2024. We adopted ASU 2022-03 on July 1, 2023 as part of the valuation methodology of the Sponsor Warrants.
Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material impact on our financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As of September 30, 2023, we were not subject to any market or interest rate risk. The funds received in connection with the submission of Elections will be held in a Custodial Account until the consummation of our Business Combination, or will be returned to electing SPAR holders in connection with certain events. The funds that are held in the Custodial Account will be held in cash or, at our election, will be invested in U.S. Treasury bills with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. Treasury obligations. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in reports filed under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosures.
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Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of September 30, 2023, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial and accounting officer have concluded that during the period covered by this Quarterly Report, our disclosure controls and procedures were effective at a reasonable assurance level and, accordingly, provided reasonable assurance that the information required to be disclosed by us in reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
Changes in Internal Control over Financial Reporting
Due to a transition period established by SEC rules applicable to newly public companies, our management is not required to evaluate the effectiveness of our internal control over financial reporting until the filing of our Annual Report on Form 10-K for the year ended December 31, 2024. As a result, this Quarterly Report on Form 10-Q does not address whether there have been any changes in our internal control over financial reporting.
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Part II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 1A. Risk Factors
Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in our Prospectus for our distribution of SPARs filed with the SEC. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this Quarterly Report on Form 10-Q, there have been no material changes to the risk factors disclosed in our Prospectus filed with the SEC on September 29, 2023.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales
Prior to the distribution, our Sponsor purchased 422,533 shares of common stock for an aggregate price of $4,225,330, or $10.00 per share. Additionally, on July 28, 2023, our Sponsor purchased Sponsor Warrants for an aggregate purchase price of $35,892,480. Concurrently with the distribution, we issued Advisor Warrants at no cost to our advisory board members. Such securities were issued in connection with our organization pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. Our Sponsor and each advisory board member is an accredited investor for purposes of Rule 501 of Regulation D under the Securities Act.
On September 29, 2023, we entered into a Forward Purchase Agreement with the Forward Purchasers (affiliates of Pershing Square Capital Management, L.P.) for an aggregate of $3.5 billion, a portion of which the Committed Forward Purchasers will be required to purchase, and the remainder of which the Additional Forward Purchaser may elect to purchase. The Committed Forward Purchasers will be obligated to purchase a minimum of $250 million of Public Shares if the Final Exercise Price is $10.00 per share, and a proportionately greater amount up to $1.0 billion at a Final Exercise Price of $40.00 per share or greater. The Additional Forward Purchaser will have the right, but not the obligation, to purchase, at the Final Exercise Price, the remainder of the $3.5 billion of Forward Purchase Shares that is not allocated to the Committed Forward Purchasers. These issuances will be made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. The Forward Purchasers are accredited investors for purposes of Rule 501 of Regulation D under the Securities Act.
No underwriting discounts or commissions were paid with respect to such unregistered sales.
For a description of the use of the proceeds generated from our distribution, see Part I, Item 2 of this Form 10-Q.
Item 3. Defaults Upon Senior Securities
(a) None.
(b) None.
Item 4. Mine Safety Disclosures
Not Applicable.
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Item 5. Other Information
(a) None.
(b) None.
(c) None.
Item 6. Exhibits
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* | Filed herewith. |
** | Furnished herewith. |
(1) | Incorporated by reference to the Company’s Current Report on Form 8-K filed on September 29, 2023. |
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Part III - SIGNATURES
Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: November 8, 2023 | Pershing Square SPARC Holdings, Ltd. | |||||
/s/ William A. Ackman | ||||||
Name: | William A. Ackman | |||||
Title: | Chief Executive Officer, Chairman of the Board of Directors | |||||
Date: November 8, 2023 | /s/ Michael Gonnella | |||||
Name: | Michael Gonnella | |||||
Title: | Chief Financial Officer |
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