2)
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
MARQUEE RAINE ACQUISITION CORP.Cayman Islands
incorporation or organization)
Identification No.)
| ||
3240 Hillview Ave Palo Alto, CA | 94304 | |
(Address of principal executive offices) | (Zip Code) |
(888)(212) 603-5500 Units, each consisting of one Class A ordinary and one-fourth of one redeemable warrant MRACU Class A ordinary shares, par value $0.0001 per share MRAC Redeemable warrants, each whole warrant exercisable for one Class A ordinary share at an exercise price of $11.50 per shareMRACWThe Nasdaq Stock Market LLC
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
Restatement Background
On April 12, 2021, the staffincome and losses of the SEC issued a Staff StatementCompany.
Based on management’s evaluation, the audit committee of ourthe Company’s Board of Directors in consultation with management,(the “Audit Committee”) concluded that the Company’s warrants are not indexed to the Company’s common stockpreviously issued (i) audited balance sheet as of December 17, 2020 (the “Post IPO Balance Sheet”), as previously revised in the manner contemplated by ASC Section 815-40. As a result, the Company is required to classify the warrants as derivative liabilities measured at their estimated fair values at the end of each reporting period, to recognize changes in the estimated fair value of the derivative instruments from the prior period in the Company’s operating results for the current period, and to restate its financial statements accordingly.
We evaluated the impact of the above and concluded that it was potentially material from a quantitative standpoint to theFirst Amended Filing, (ii) audited financial statements included in the OriginalFirst Amended Filing, (iii) unaudited interim financial statements included in the Company’s Quarterly Report on Form
Our audit committee, together with management, determined that theSEC on June 7, 2021; (iv) unaudited interim financial statements included in the Affected PeriodCompany’s Quarterly Report on Form
The Company has not amended its previously filed Current Reports on Form 8-K for the Affected Period. The financial information that has been previously filed or otherwise reported for these periods is superseded by the information in this Form 10-K/A.
Except as described above, this Form 10-K/A does not amend, update or change any other items or disclosuresheld in the Original Report and does not purport to reflect any information or events subsequent to the filing thereof. As such, this Form 10-K/A speaks only as of the date the Original Report was filed, and we have not undertaken herein to amend, supplement or update any information containedtrust account established in the Original Report to give effect to any subsequent events. Accordingly, this Form 10-K/A should be read in conjunction with our filings made with the SEC subsequent to the filing of the Original Report, including any amendment to those filings.
In connection with the restatement,Initial Public Offering.
Form 10-K/AThis Form 10-K/A presentsAmendment No. 2
Except as described above, no other information included in the Annual Report on Form
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ITEM 1. | BUSINESS |
duties under Cayman Islands law. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our Business Combination. Our amended and restated memorandum and articles of association provide that we renounce our interest in any Business Combination opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the Company and it is an opportunity that we are able to complete on a reasonable basis.
and the ability to use its shares as currency for acquisitions. Being a public company can offer further benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting talented employees.
candidate for either of Marquee or The Raine Group unless Marquee and The Raine Group, in their sole discretion, decline such potential Business Combination or makes available to the Company a
Business Combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses and we will treat the target businesses together as the Business Combination for purposes of a tender offer or for seeking shareholder approval, as applicable. In addition, we have agreed not to enter into a definitive agreement regarding a Business Combination without the prior consent of our Sponsor. If our securities are not then listed on Nasdaq for whatever reason, we would no longer be required to meet the foregoing 80% of net asset test.
Such a purchase may include a contractual acknowledgement that such shareholder, although still the record holder of our shares is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. None of the funds in the Trust Account will be used to purchase shares in such transactions. We have adopted an insider trading policy which requires insiders to: (i) refrain from purchasing shares during certain blackout periods and when they are in possession of any material
Founder Shares, we would need 14,015,625, or approximately 37.5%, of the 37,375,000 public shares sold in the Initial Public Offering to be voted in favor of a Business Combination in order to have our Business Combination approved (assuming all issued and outstanding shares are voted). We intend to give not less than 10 days nor more than 60 days prior written notice of any such meeting, if required, at which a vote shall be taken to approve our Business Combination. These quorum and voting thresholds, and the voting agreements of our initial shareholders, may make it more likely that we will complete our Business Combination. Each public shareholder may elect to redeem its public shares irrespective of whether they vote for or against the proposed transaction. In addition, our Sponsor, directors and each member of our management team, have each entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to their Founder Shares and public shares in connection with (i) the completion of a Business combination and (ii) a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association that would affect the substance or timing of our obligation to allow redemption in connection with our Business Combination or to redeem 100% of our public shares if we have not completed a Business Combination within 24 months from the IPO Closing Date.
which he or she could monitor the price of our stock in the market. If the price rose above the redemption price, he or she could sell his or her shares in the open market before actually delivering his or her shares to us for cancellation. As a result, the redemption rights, to which shareholders were aware they needed to commit before the shareholder meeting, would become “option” rights surviving past the completion of the Business Combination until the redeeming holder delivered its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming holder’s election to redeem is irrevocable once the Business Combination is approved.
affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our Business Combination within 24 months from the IPO Closing Date, unless we provide our public shareholders with the opportunity to redeem their public shares upon approval of any such amendment at a
reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our taxes if the funds in the Trust Account are held in an interest-bearing account, provided that such liability will not apply to any claims by a third party or prospective target business that executed a waiver of any and all rights to seek access to the trust account nor will it apply to any claims under our indemnity of the underwriter of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, our Sponsor will not be responsible to the extent of any liability for such third party claims. However, we have not asked our Sponsor to reserve for such indemnification obligations, nor have we independently verified whether our Sponsor has sufficient funds to satisfy their indemnity obligations, and we believe that our Sponsor’s only assets are securities of the Company. Therefore, we cannot assure you that our Sponsor would be able to satisfy those obligations. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
Closing Date, (ii) in connection with a shareholder vote to amend our amended and restated memorandum association (A) to modify the substance or timing of our obligation to allow redemption in connection with our Business Combination or to redeem 100% of our public shares if we do not complete a Business Combination within 24 months from the IPO Closing Date or (B) with respect to any other provisions relating to the rights of holders of our Class A Ordinary Shares, or (iii) if they redeem their respective shares for cash upon the completion of the Business Combination. Public shareholders who redeem their Class A Ordinary Shares in connection with a shareholder vote described in clause (ii) in the preceding sentence shall not be entitled to funds from the Trust Account upon the subsequent completion of a Business Combination or liquidation if we have not completed a Business Combination within 24 months from the IPO Closing Date, with respect to such Class A Ordinary Shares so redeemed. In no other circumstances will a shareholder have any right or interest of any kind to or in the Trust Account. In the event we seek shareholder approval in connection with our Business Combination, a shareholder’s voting in connection with the Business Combination alone will not result in a shareholder’s redeeming its shares to us for an applicable pro rata share of the Trust Account. Such shareholder must have also exercised its redemption rights described above. These provisions of our amended and restated memorandum and articles of association, like all provisions of our amended and restated memorandum and articles of association, may be amended with a shareholder vote.
affiliates, competing for the types of businesses we intend to acquire. Many of these entities are well established and have extensive experience identifying and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other resources than us. Our Sponsor or any of its affiliates (including Marquee, The Raine Group and their respective affiliates) may make additional investments in us, although our Sponsor and its affiliates have no obligation or other duty to do so. Our ability to acquire larger target businesses will be limited by our available financial resources. This inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore, our obligation to pay cash in connection with our public shareholders who exercise their redemption rights may reduce the resources available to us for our Business Combination and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating a Business Combination.
obligations or (ii) by way of the withholding in whole or in part of a payment of dividend or other distribution of income or capital by us to our shareholders or a payment of principal or interest or other sums due under a debenture or other obligation of us.
ITEM 1A. | RISK FACTORS |
greater portion of the cash in the Trust Account or arrange for additional third party financing. Raising additional third party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. The above considerations may limit our ability to complete the most desirable Business Combination available to us or optimize our capital structure. The amount of the deferred underwriting commissions payable to the underwriter will not be adjusted for any shares that are redeemed in connection with a Business Combination. The
a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our Board, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. Our amended and restated memorandum and articles of association provide that, if we wind up for any other reason prior to the completion of our Business Combination, we will follow the foregoing procedures with respect to the liquidation of the trust account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands law. In such case, our public shareholders may only receive $10.00 per share, and our warrants will expire worthless. In certain circumstances, our public shareholders may receive less than $10.00 per share on the redemption of their shares. See “—If third parties bring claims against us, the proceeds held in the trust account could be reduced and the
are under no obligation to do so. However, other than as expressly stated herein, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the Trust Account will be used to purchase shares or warrants in such transactions.
respective affiliates, competing for the types of businesses we intend to acquire. Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire with the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. Our Sponsor or any of its affiliates (including Marquee, The Raine Group and their respective affiliates) may make additional investments in us, although our Sponsor and its affiliates have no obligation or other duty to do so. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, we are obligated to offer holders of our public shares the right to redeem their shares for cash at the time of our Business Combination in conjunction with a shareholder vote or via a tender offer. Target companies will be aware that this may reduce the resources available to us for our Business Combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating a Business Combination. If we do not complete our Business Combination our public shareholders may receive only their pro rata portion of the funds in the Trust Account that are available for distribution to public shareholders, and our warrants will expire worthless.
convertible into warrants of the post-Business Combination entity at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants. Prior to the completion of our Business Combination, we do not expect to seek loans from parties other than our Sponsor or an affiliate of our Sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our Trust Account. If we are unable to obtain these loans, we may be unable to complete our Business Combination. If we do not complete our Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. Consequently, our public shareholders may only receive an estimated $10.00 per share, or possibly less, on our redemption of our public shares (or less than $10.00 per share on the redemption of their shares in certain circumstances where a third-party brings a claim against us that our Sponsor is unable to indemnify) and our warrants will expire worthless. See “—If third parties bring claims against us, the proceeds held in the trust account could be reduced and the
waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative.
less than $10.00 per share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our taxes if the funds in the Trust Account are held in an interest-bearing account, and our Sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our Sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our Sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available for distribution to our public shareholders may be reduced below $10.00 per share.
Compliance with, and monitoring of, applicable laws, regulations and rules may be difficult, time consuming and costly. Those laws, regulations or rules and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws, regulations or rules, as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our Business Combination, and results of operations.
shareholders will be relying on the judgment of our Board, who will determine fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed in our proxy solicitation or tender offer materials, as applicable, related to our Business Combination.
(i) the total number of our issued and outstanding Ordinary Shares upon completion of the Initial Public Offering, plus (ii) the sum of (a) the total number of Class A Ordinary Shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or deemed issued by the Company in connection with or in relation to the completion of the Business Combination, excluding (1) any Class A Ordinary Shares or equity-linked securities exercisable for or convertible into Class A Ordinary Shares issued, or to be issued, to any seller in the Business Combination and (2) any Private Placement Warrants issued to our Sponsor or any of its affiliates upon conversion of working capital loans, minus (b) the number of public shares redeemed by public shareholders in connection with our Business Combination. In no event will the Founder Shares convert into Class A Ordinary Shares at a rate of less than one to one. This is different than most other similarly structured blank check companies in which the initial shareholders will only be issued an aggregate of 20% of the total number of shares to be outstanding prior to the Business Combination.
the warrants. In addition, our amended and restated memorandum and articles of association require us to provide our public shareholders with the opportunity to redeem their public shares for cash if we propose an amendment to our amended and restated memorandum and articles of association that would affect the substance or timing of our obligation to allow redemption in connection with our Business Combination or to redeem 100% of our public shares if we do not complete a Business Combination within 24 months from the IPO Closing Date. To the extent any of such amendments would be deemed to fundamentally change the nature of any of the securities offered in the Initial Public Offering, we would register, or seek an exemption from registration for, the affected securities.
exemption from state registration is available. Notwithstanding the above, if our Class A Ordinary Shares are at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of warrants who exercise their warrants to do so on a “net share” (cashless) basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will be required to use our best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In no event will we be required to net cash settle any warrant, or issue securities or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under the Securities Act or applicable state securities laws and there is no exemption available. If the issuance of the shares upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of Units will have paid the full unit purchase price solely for the Class A Ordinary Shares included in the Units. There may be a circumstance where an exemption from registration exists for holders of our Private Placement Warrants to exercise their warrants while a corresponding exemption does not exist for holders of the warrants included as part of Units sold in the Initial Public Offering. In such an instance, our Sponsor and its transferees (which may include our directors and executive officers) would be able to sell the Ordinary Shares underlying their warrants while holders of our warrants would not be able to exercise their warrants and sell the underlying Ordinary Shares. There may be a circumstance where an exemption from registration exists for holders of our Private Placement Warrants to exercise their warrants while a corresponding exemption does not exist for holders of the warrants included as part of Units sold in the Initial Public Offering. In such an instance, our Sponsor and its transferees (which may include our directors and executive officers) would be able to sell the Ordinary Shares underlying their warrants while holders of our warrants would not be able to exercise their warrants and sell the underlying Ordinary Shares. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
will be required to use commercially reasonable efforts to register the issuance of the security underlying the warrants within twenty business days of the closing of a Business Combination.
jurisdiction. The transaction may require a shareholder or warrant holder to recognize taxable income in the jurisdiction in which the shareholder or warrant holder is a tax resident or in which its members are resident if it is a
round lot holders (with at least 50% of such round lot holders holding securities with a market value of at least $2,500) of our securities. We cannot assure you that we will be able to meet those initial listing requirements at that time.
against our Business Combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our Business Combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete our Business Combination. And as a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your shares in open market transactions, potentially at a loss.
considered in making such additional purchases would include consideration of the current trading price of our Class A Ordinary Shares. In addition, the Founder Shares, all of which are held by our initial shareholders, will entitle the holders to elect all of our directors prior to our Business Combination. Holders of our public shares will not be entitled to vote on the appointment of directors during such time. We may not hold an annual general meeting to appoint new directors prior to the completion of our Business Combination, in which case all of the current directors will continue in office until at least the completion of the Business Combination. Accordingly, our initial shareholders will continue to exert control at least until the completion of our Business Combination.
federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.
these warrants and conversion rights could make us a less attractive acquisition vehicle to a target business. Such warrants when exercised will increase the number of issued and outstanding Class A Ordinary Shares and reduce the value of the Class A Ordinary Shares issued to complete the Business Combination. Therefore, our warrants may make it more difficult to effectuate a Business Combination or increase the cost of acquiring the target business.
based upon a valuation report obtained from our independent third party valuation firm. The impact of changes in fair value on earnings may have an adverse effect on the market price of our Class A ordinary shares and/or our financial results. In addition, potential targets may seek a SPAC that does not have warrants that are accounted for as a derivative warrant liability, which may make it more difficult for us to consummate an initial business combination with a target business.
may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
not required to commit any specified amount of time to our affairs and, accordingly, may have conflicts of interest in allocating their time among various business activities, including identifying potential Business Combinations and monitoring the related due diligence. Moreover, certain of our directors and executive officers have time and attention requirements for private investments and private investment funds of which affiliates of Marquee and The Raine Group are the investment managers. We do not have an employment agreement with, or
we may target for our Business Combination. The Raine Group also which sponsors, manages and advises certain accounts that make, or may in the future make, investments in securities or other interests of or relating to companies in industries we may target for our Business Combination. Our directors also serve as officers and board members for other entities. If our executive officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete our Business Combination.
raised by the SEC, the Financial Accounting Standards Board and various other bodies formed to interpret and create appropriate accounting principles and guidance we face potential for litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the Restatement and material weaknesses in our internal control over financial reporting and the preparation of our financial statements. As of the date of this proxy statement/prospectus, we have no knowledge of any such litigation or dispute. However, we can provide no assurance that such litigation or dispute will not arise in the future. Any such litigation or dispute, whether successful or not, could have a material adverse effect on our business, results of operations and financial condition or our ability to complete the Business Combination.
different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
ITEM 2. | PROPERTIES |
ITEM 3. | LEGAL PROCEEDINGS |
ITEM 4. | MINE SAFETY DISCLOSURES |
ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
its permitted transferees. If the Private Placement Warrants are held by holders other than our Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by us and exercisable by the holders on the same basis as the warrants.
ITEM 6. | SELECTED FINANCIAL DATA |
ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
operations should be read in conjunction withapproval by MRAC’s stockholders on October 13, 2021, the financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
In thisBusiness Combination was consummated.
On April 12,ended September 30, 2021, the staff of the SEC issued a Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”) (the “SEC Staff Statement”). In the SEC Staff Statement, the SEC Staff expressedCompany concluded it should revise its view that certain terms and conditions commonprior-filed financial statements to SPAC warrants may require the warrants to be classified as liabilities on the SPAC’s balance sheet as opposed to equity. Since issuance on December 17, 2020, our warrants were accounted for as equity within our balance sheet, and after discussion and evaluation, including with our independent registered public accounting firm and our audit committee, and taking into consideration the SEC Staff Statement, we have concluded that our warrants should be presented as liabilities with subsequent fair value remeasurement.
As a result of the foregoing, the Audit Committee of the Company, following a review of the accounting guidance related to its public and private placement warrants to purchaseclassify all Class A ordinary shares subject to possible redemption in temporary equity. In accordance with ASC
Our accounting
Inposition and cash held in the trust account established in connection with the restatement, ourInitial Public Offering.
Amendment No. 2.
for forward-looking statements contained in the Private Securities Litigation Reform Act. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors, including but not limited to, those detailed in Part I, Item 1A. Risk Factors, of this Annual Report on Form 10-K/AAmendment No. 2 and our other filings with the SEC. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are qualified in their entirety by this paragraph.
For the period from October 16, 2020 (inception) through December 31, 2020, we had net loss of approximately $4.8 million, which consisted of approximately $3.8 million loss from changes in fair value of derivative warrant liabilities, transaction costs – derivative warrant liabilities of approximately $0.9 million and approximately $128,000 of general and administrative expenses.
Business Combination or (y) the date on which the Company completes a liquidation, merger, share exchange or other similar transaction after the Business Combination that results in all of the shareholders having the right to exchange their Class A Ordinary Shares for cash, securities or other property.
certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, 33,044,95837,375,000 Class A Ordinary Shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet.
The Company’s statement of operations includes As a presentation ofresult, diluted net income (loss) per share is the same as basic net income (loss) per share for the period from October 16, 2020 (inception) through December 31, 2020. The remeasurement of the Class A ordinary shares subject to possible redemption in a manner similar tois excluded from earnings per share as the two-class method of income per share. Net income per ordinary share, basic and diluted for Class A Ordinary Shares are calculated by dividing the interest income earned on cash, cash equivalents and investments held in the Trust Account, net of amounts available to be withdrawn from the Trust Account to pay the Company’s income taxes, for the period presented, by the weighted average number of Class A Ordinary Shares outstanding for the period. Net loss per ordinary share, basic and diluted for Class B Ordinary Shares is calculated by dividing the net loss, less income attributable to Class A Ordinary Shares, by the weighted average number of Class B Ordinary Shares outstanding for the period.
redemption value approximates fair value.
company” and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for
ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
7670 7771 7872 7973 8074 8175
certain misstatements.
since 2020.
Assets | ||||
Current assets: | ||||
Cash | $ | 2,266,049 | ||
Prepaid expenses | 831,645 | |||
|
| |||
Total current assets | 3,097,694 | |||
Cash held in Trust Account | 373,750,000 | |||
|
| |||
Total Assets | $ | 376,847,694 | ||
|
| |||
Liabilities and Shareholders’ Equity | ||||
Current liabilities: | ||||
Accounts payable | $ | 578,902 | ||
Accrued expenses | 488,824 | |||
|
| |||
Total current liabilities | 1,067,726 | |||
Deferred underwriting commissions | 13,081,250 | |||
Derivative warrant liabilities | 27,249,130 | |||
|
| |||
Total liabilities | 41,398,106 | |||
Commitments and Contingencies | ||||
Class A ordinary shares, $0.0001 par value; 33,044,958 shares subject to possible redemption at $10.00 per share | 330,449,580 | |||
Shareholders’ Equity | ||||
Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding | — | |||
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; 4,330,042 shares issued and outstanding (excluding 33,044,958 shares subject to possible redemption) | 433 | |||
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 9,343,750 shares issued and outstanding | 934 | |||
Additional paid-in capital | 9,830,842 | |||
Accumulated deficit | (4,832,201 | ) | ||
|
| |||
Total shareholders’ equity | 5,000,008 | |||
|
| |||
Total Liabilities and Shareholders’ Equity | $ | 376,847,694 | ||
|
|
Assets | ||||
Current assets: | ||||
Cash | $ | 2,266,049 | ||
Prepaid expenses | 831,645 | |||
Total current assets | 3,097,694 | |||
Cash held in Trust Account | 373,750,000 | |||
Total Assets | $ | 376,847,694 | ||
Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit | ||||
Current liabilities: | ||||
Accounts payable | $ | 578,902 | ||
Accrued expenses | 488,824 | |||
Total current liabilities | 1,067,726 | |||
Deferred underwriting commissions | 13,081,250 | |||
Derivative warrant liabilities | 27,249,130 | |||
Total liabilities | 41,398,106 | |||
Commitments and Contingencies | 0 | |||
Class A ordinary shares, $0.0001 par value; 37,375,000 shares subject to possible redemption at $10.00 per share | 373,750,000 | |||
Shareholders’ Deficit | ||||
Preference shares, $0.0001 par value; 5,000,000 shares authorized; NaN issued and outstanding | 0 | |||
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; 0 nonredeemable shares issued and outstanding | 0 | |||
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 9,343,750 shares issued and outstanding | 934 | |||
Additional paid-in capital | 0 | |||
Accumulated deficit | (38,301,346 | ) | ||
Total shareholders’ deficit | (38,300,412 | ) | ||
Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit | $ | 376,847,694 | ||
General and administrative expenses | $ | 127,691 | ||
|
| |||
Loss from operations | (127,691 | ) | ||
Other income (expenses) | ||||
Change in fair value of derivative warrant liabilities | (3,758,500 | ) | ||
Transaction costs—derivative warrant liabilities | (946,010 | ) | ||
|
| |||
Net loss | $ | (4,832,201 | ) | |
|
| |||
Weighted average Class A ordinary shares outstanding, basic and diluted | 37,375,000 | |||
|
| |||
Basic and diluted net income per ordinary share, Class A | $ | — | ||
|
| |||
Weighted average Class B ordinary shares outstanding, basic and diluted | 8,429,688 | |||
|
| |||
Basic and diluted net loss per ordinary share, Class B | $ | (0.57 | ) | |
|
|
General and administrative expenses | $ | 127,691 | ||
Loss from operations | (127,691 | ) | ||
Other income (expenses) | ||||
Change in fair value of derivative warrant liabilities | (3,758,500 | ) | ||
Transaction costs—derivative warrant liabilities | (946,010 | ) | ||
Net loss | $ | (4,832,201 | ) | |
Weighted average Class A ordinary shares outstanding, basic and diluted | 8,625,000 | |||
Basic and diluted net loss per ordinary share, Class A | $ | (0.28 | ) | |
Weighted average Class B ordinary shares outstanding, basic and diluted | 8,406,250 | |||
Basic and diluted net loss per ordinary share, Class B | $ | (0.28 | ) | |
DEFICIT
Ordinary Shares | Additional Paid-in Capital | Accumulated Deficit | Total Shareholders’ Deficit | |||||||||||||||||||||||||
Class A | Class B | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance—October 16, 2020 (inception) | — | $ | — | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||
Issuance of Class B ordinary shares to Sponsor | — | — | 9,343,750 | 934 | 24,066 | — | 25,000 | |||||||||||||||||||||
Accretion of Class A ordinary shares subject to possible redemption | — | — | — | — | (24,066 | ) | (33,469,145 | ) | (33,493,211 | ) | ||||||||||||||||||
Net loss | — | — | — | — | — | (4,832,201 | ) | (4,832,201 | ) | |||||||||||||||||||
Balance—December 31, 2020 | — | $ | — | 9,343,750 | $ | 934 | $ | 0 | $ | (38,301,346 | ) | $ | (38,300,412 | ) | ||||||||||||||
Ordinary Shares | Additional Paid-in Capital | Accumulated Deficit | Total Shareholders’ Equity | |||||||||||||||||||||||||
Class A | Class B | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance—October 16, 2020 (inception) | — | $ | — | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Issuance of Class B ordinary shares to Sponsor | — | — | 9,343,750 | 934 | 24,066 | — | 25,000 | |||||||||||||||||||||
Sale of units in initial public offering, less fair value of public warrants | 37,375,000 | 3,738 | — | — | 359,730,632 | — | 359,734,370 | |||||||||||||||||||||
Offering costs, net of reimbursement from underwriters | — | — | — | — | (19,477,581 | ) | — | (19,477,581 | ) | |||||||||||||||||||
Class A ordinary shares subject to possible redemption | (33,044,958 | ) | (3,305 | ) | — | — | (330,446,275 | ) | — | (330,449,580 | ) | |||||||||||||||||
Net loss | — | — | — | — | — | (4,832,201 | ) | (4,832,201 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Balance—December 31, 2020 | 4,330,042 | $ | 433 | 9,343,750 | $ | 934 | $ | 9,830,842 | $ | (4,832,201 | ) | $ | 5,000,008 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Operating Activities: | ||||
Net loss | $ | (4,832,201 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
General and administrative expenses paid by Sponsor in exchange for issuance of Class B ordinary shares | 25,000 | |||
Change in fair value of derivative warrant liabilities | 3,758,500 | |||
Transaction costs—derivative warrant liabilities | 946,010 | |||
Changes in operating assets and liabilities: | ||||
Prepaid expenses | (831,645 | ) | ||
Accounts payable | 578,902 | |||
Accrued expenses | 53,590 | |||
Net cash used in operating activities | (301,844 | ) | ||
Cash Flows from Investing Activities: | ||||
Cash deposited in Trust Account | (373,750,000 | ) | ||
Net cash used in investing activities | (373,750,000 | ) | ||
Cash Flows from Financing Activities: | ||||
Proceeds received from note payable to related party | 127,850 | |||
Repayment of note payable to related party | (127,850 | ) | ||
Proceeds received from initial public offering, gross | 373,750,000 | |||
Proceeds received from private placement | 9,475,000 | |||
Reimbursement from underwriters | 2,990,000 | |||
Offering costs paid | (9,897,107 | ) | ||
Net cash provided by financing activities | 376,317,893 | |||
Net change in cash | 2,266,049 | |||
Cash—beginning of the period | 0 | |||
Cash—end of the period | $ | 2,266,049 | ||
Supplemental disclosure of noncash financing activities: | ||||
Offering costs included in accrued expenses | $ | 435,234 | ||
Deferred underwriting commissions | $ | 13,081,250 | �� |
Marquee Raine Acquisition Corp.
As Restated—See Note 2
For The Period From October 16, 2020 (inception) through December 31, 2020
Cash Flows from Operating Activities: | ||||
Net loss | $ | (4,832,201 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
General and administrative expenses paid by Sponsor in exchange for issuance of Class B ordinary shares | 25,000 | |||
Change in fair value of derivative warrant liabilities | 3,758,500 | |||
Transaction costs—derivative warrant liabilities | 946,010 | |||
Changes in operating assets and liabilities: | ||||
Prepaid expenses | (831,645 | ) | ||
Accounts payable | 578,902 | |||
Accrued expenses | 53,590 | |||
|
| |||
Net cash used in operating activities | (301,844 | ) | ||
|
| |||
Cash Flows from Investing Activities: | ||||
Cash deposited in Trust Account | (373,750,000 | ) | ||
|
| |||
Net cash used in investing activities | (373,750,000 | ) | ||
|
| |||
Cash Flows from Financing Activities: | ||||
Proceeds received from note payable to related party | 127,850 | |||
Repayment of note payable to related party | (127,850 | ) | ||
Proceeds received from initial public offering, gross | 373,750,000 | |||
Proceeds received from private placement | 9,475,000 | |||
Reimbursement from underwriters | 2,990,000 | |||
Offering costs paid | (9,897,107 | ) | ||
|
| |||
Net cash provided by financing activities | 376,317,893 | |||
|
| |||
Net change in cash | 2,266,049 | |||
Cash—beginning of the period | — | |||
|
| |||
Cash—end of the period | $ | 2,266,049 | ||
|
| |||
Supplemental disclosure of noncash financing activities: | ||||
Offering costs included in accrued expenses | $ | 435,234 | ||
Deferred underwriting commissions | $ | 13,081,250 | ||
Initial value of Class A ordinary shares subject to possible redemption | $ | 333,685,710 | ||
Change in initial value of Class A ordinary shares subject to possible redemption | $ | (3,236,130 | ) |
The accompanying notes are an integral partTable of these financial statements.
to enter into the Business Combination. However, the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act).
If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a
On April 12,
registered public accounting firm and the audit committee, management concluded that the warrants should be presented as liabilities with subsequent fair value re-measurement.
Impact of the Restatement
The impact of the restatement on the balance sheets, statement of operations and statement of cash flowschange in presentation for the Affected Period is presented below. The restatement had no impact on net cash flows from operating, investing or financing activities.
As of December 31, 2020 | ||||||||||||
As Previously Reported | Restatement Adjustment | As Restated | ||||||||||
Balance Sheet | ||||||||||||
Total assets | $ | 376,847,694 | $ | — | $ | 376,847,694 | ||||||
|
|
|
|
|
| |||||||
Liabilities and shareholders’ equity | ||||||||||||
Total current liabilities | $ | 1,067,726 | $ | — | $ | 1,067,726 | ||||||
Deferred legal fees | — | — | ||||||||||
Deferred underwriting commissions | 13,081,250 | — | 13,081,250 | |||||||||
Derivative warrant liabilities | — | 27,249,130 | 27,249,130 | |||||||||
|
|
|
|
|
| |||||||
Total liabilities | 14,148,976 | 27,249,130 | 41,398,106 | |||||||||
Class A ordinary shares, $0.0001 par value; shares subject to possible redemption | 357,698,710 | (27,249,130 | ) | 330,449,580 | ||||||||
Shareholders’ equity | ||||||||||||
Preference shares—$0.0001 par value | — | — | — | |||||||||
Class A ordinary shares—$0.0001 par value | 161 | 272 | 433 | |||||||||
Class B ordinary shares—$0.0001 par value | 934 | — | 934 | |||||||||
Additional paid-in-capital | 5,126,604 | 4,704,238 | 9,830,842 | |||||||||
Accumulated deficit | (127,691 | ) | (4,704,510 | ) | (4,832,201 | ) | ||||||
|
|
|
|
|
| |||||||
Total shareholders’ equity | 5,000,008 | — | 5,000,008 | |||||||||
|
|
|
|
|
| |||||||
Total liabilities and shareholders’ equity | $ | 376,847,694 | $ | — | $ | 376,847,694 | ||||||
|
|
|
|
|
|
Period From October 16, 2020 (Inception) Through December 31, 2020 | ||||||||||||
As Previously Reported | Restatement Adjustment | As Restated | ||||||||||
Statement of Operations | ||||||||||||
Loss from operations | $ | (127,691 | ) | $ | — | $ | (127,691 | ) | ||||
Other (expense) income: | ||||||||||||
Change in fair value of derivative warrant liabilities | — | (3,758,500 | ) | (3,758,500 | ) | |||||||
Transaction costs—derivative warrant liabilities | — | (946,010 | ) | (946,010 | ) | |||||||
Net gain from investments held in Trust Account | — | — | — | |||||||||
|
|
|
|
|
| |||||||
Total other (expense) income | — | (4,704,510 | ) | (4,704,510 | ) | |||||||
|
|
|
|
|
| |||||||
Net loss | $ | (127,691 | ) | $ | (4,704,510 | ) | $ | (4,832,201 | ) | |||
|
|
|
|
|
| |||||||
Basic and Diluted weighted-average Class A ordinary shares outstanding | 37,375,000 | — | 37,375,000 | |||||||||
Basic and Diluted net loss per Class A share | $ | — | — | $ | — | |||||||
Basic and Diluted weighted-average Class B ordinary shares outstanding | 8,429,688 | — | 8,429,688 | |||||||||
Basic and Diluted net loss per Class B share | $ | (0.02 | ) | $ | (0.55 | ) | $ | (0.57 | ) |
Period From October 16, 2020 (Inception) Through December 31, 2020 | ||||||||||||
As Previously Reported | Restatement Adjustment | As Restated | ||||||||||
Statement of Cash Flows | ||||||||||||
Net loss | $ | (127,691 | ) | $ | (4,704,510 | ) | $ | (4,832,201 | ) | |||
Change in fair value of derivative warrant liabilities | — | 3,758,500 | 3,758,500 | |||||||||
Transaction costs - derivative warrant liabilities | — | 946,010 | 946,010 |
In addition, the impact to the balance sheet dated December 17, 2020, filed on Form 8-K on December 23, 2020 related to the impact of accounting for the public and private warrants as liabilities at fair value resulted in an $23.5 million increase to the derivative warrant liabilities line item at December 17, 2020 and offsetting decrease to the Class A ordinary shares subject to possible redemption, mezzaninethe Company determined it should restate its earnings per share calculation to allocate income and losses shared pro rata between the two classes of shares. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of shares share pro rata in the income and losses of the Company.
As of December 31, 2020 | As Reported | Adjustment | As Restated | |||||||||
Total assets | $ | 376,847,694 | $ | 376,847,694 | ||||||||
Total liabilities | $ | 41,398,106 | $ | 41,398,106 | ||||||||
Class A ordinary shares subject to redemption at $10.00 per share | $ | 330,449,580 | $ | 43,300,420 | $ | 373,750,000 | ||||||
Preference shares | 0 | 0 | 0 | |||||||||
Class A ordinary shares | 433 | (433 | ) | 0 | ||||||||
Class B ordinary shares | 934 | 0 | 934 | |||||||||
Additional paid-in capital | 9,830,842 | (9,830,842 | ) | 0 | ||||||||
Accumulated deficit | (4,832,201 | ) | (33,469,145 | ) | (38,301,346 | ) | ||||||
Total shareholders’ equity (deficit) | $ | 5,000,008 | $ | (43,300,420 | ) | $ | (38,300,412 | ) | ||||
Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Equity (Deficit) | $ | 376,847,694 | $ | 0 | $ | 376,847,694 | ||||||
Shares of Class A ordinary shares subject to redemption | 33,044,958 | 4,330,042 | 37,375,000 | |||||||||
Shares of Class A ordinary shares | 4,330,042 | (4,330,042 | ) | 0 |
Supplemental Disclosure of Noncash Financing Activities | ||||||||||||
Initial value of Class A ordinary shares subject to possible redemption | $ | 333,685,710 | $ | (333,685,710 | ) | $ | 0 | |||||
Change in value of Class A ordinary shares subject to possible redemption | $ | (3,236,130 | ) | $ | 3,236,130 | $ | 0 |
Earnings Per Share | ||||||||||||
As Reported | Adjustment | As Restated | ||||||||||
For the Period from October 16, 2020 (Inception) through December 31, 2020 | ||||||||||||
Net loss | $ | (4,832,201 | ) | $ | 0 | $ | (4,832,201 | ) | ||||
Weighted average shares outstanding - Class A ordinary shares | 37,375,000 | (28,750,000 | ) | 8,625,000 | ||||||||
Basic and diluted loss per share - Class A ordinary shares | $ | 0 | $ | (0.28 | ) | $ | (0.28 | ) | ||||
Weighted average shares outstanding - Class B ordinary shares | 8,429,688 | (23,438 | ) | 8,406,250 | ||||||||
Basic and diluted loss per share - Class B ordinary shares | $ | (0.57 | ) | $ | 0.29 | $ | (0.28 | ) |
As of December 17, 2020 | As Reported, As Revised | Adjustment | As Restated | |||||||||
Total assets | $ | 375,776,800 | $ | 375,776,800 | ||||||||
Total liabilities | $ | 37,091,089 | $ | 37,091,089 | ||||||||
Class A ordinary shares subject to redemption at $10.00 per share | $ | 333,685,710 | $ | 40,064,290 | $ | 373,750,000 | ||||||
Preference shares | 0 | 0 | 0 | |||||||||
Class A ordinary shares | 401 | (401 | ) | 0 | ||||||||
Class B ordinary shares | 934 | 0 | 934 | |||||||||
Additional paid-in capital | 5,995,328 | (5,995,328 | ) | 0 | ||||||||
Accumulated deficit | (996,662 | ) | (34,068,561 | ) | (35,065,223 | ) | ||||||
Total shareholders’ equity (deficit) | $ | 5,000,001 | $ | (40,064,290 | ) | $ | (35,064,289 | ) | ||||
Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Equity (Deficit) | $ | 375,776,800 | $ | 0 | $ | 375,776,800 | ||||||
Shares of Class A ordinary shares subject to redemption | 33,368,571 | 4,006,429 | 37,375,000 | |||||||||
Shares of Class A ordinary shares | 4,006,429 | (4,006,429 | ) | 0 |
Gross Proceeds for initial public offering and over-allotment | $ | 375,750,000 | ||
Less: | — | |||
Offering costs allocated to Class A shares subject to possible redemption | (19,477,581 | ) | ||
Proceeds allocated to Public Warrants at issuance | (14,015,630 | ) | ||
Plus: | ||||
Accretion of Class A ordinary shares subject to possible redemption amount | 33,493,211 | |||
Class A ordinary shares subject to possible redemption | $ | 375,750,000 |
As of December 31, 2020, the carrying values of cash, accounts payable, and accrued expenses approximate their fair values primarily due to the short-term nature of the instruments.
The Company’s statement of operations includes As a presentation ofresult, diluted net income (loss) per share for ordinary shares subject to redemption in a manner similar tois the two-class method ofsame as basic net income (loss) per share. Net income per ordinary share basic and diluted for Class A Ordinary Shares are calculated by dividing the interest income earned on cash held in the Trust Account of $0, net of amounts available to be withdrawn from the Trust Account to pay the Company’s income taxes, for the period from October 16, 2020 (inception) through December 31, 2020, by2020. The remeasurement of the weighted average number of Class A Ordinary Shares outstanding forordinary shares subject to possible redemption is excluded from earnings per share as the period. Net loss per ordinary share, basic and diluted for Founder Shares is calculated by dividing the net loss of approximately $4.8 million, less income attributable to Class A Ordinary Shares of approximately $0, resulting in a net loss of approximately $4.8 million, by the weighted average number of Founder Shares outstanding for the period.
redemption value approximates fair value.
taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
Account. In the event that a Business Combination does not close, the Company may use a portion of the proceeds held outside the Trust Account to repay the working capital loans but no proceeds held in the Trust Account would be used to repay the working capital loans. Except for the foregoing, the terms of such working capital loans, if any, have not been determined and no written agreements exist with respect to such loans. The working capital loans would either be repaid upon completion of a Business Combination, without interest, or, at the lenders’ discretion, up to $1.5 million of such working capital loans may be convertible into warrants of the post Business Combination entity at a price of $1.50 per warrant. The warrants would be identical to the Private Placement Warrants. As of the December 31, 2020, the Company had no0 borrowings under the working capital loans.
completes its Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $10.00 and $18.00 per share redemption trigger prices described under “Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00” and “Redemption of warrants when the price per Class A Ordinary Share equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to 100% and 180% of the higher of the Market Value and the Newly Issued Price, respectively.
|
If the Company has not completed the Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
redemption and classified in temporary equity.
Description | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||
Liabilities: | ||||||||||||
Derivative warrant liabilities | $ | — | $ | — | $ | 27,249,130 |
Description | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||
Liabilities: | ||||||||||||
Derivative warrant liabilities | $ | 0 | $ | 0 | $ | 27,249,130 |
As of December 17, 2020 | As of December 31, 2020 | |||||||
Volatility | 22.4 | % | 21.7 | % | ||||
Stock price | $ | 10.45 | $ | 10.40 | ||||
Expected life of the options to convert | 5.5 | 5.5 | ||||||
Risk-free rate | 0.45 | % | 0.43 | % | ||||
Dividend yield | 0.0 | % | 0.0 | % |
Derivative warrant liabilities at October 16, 2020 (inception) | $ | — | ||
Issuance of Public and Private Warrants | 23,490,630 | |||
Change in fair value of derivative warrant liabilities | 3,758,500 | |||
|
| |||
Derivative warrant liabilities at December 31, 2020 | $ | 27,249,130 | ||
|
|
Derivative warrant liabilities at October 16, 2020 (inception) | $ | 0 | ||
Issuance of Public and Private Warrants | 23,490,630 | |||
Change in fair value of derivative warrant liabilities | 3,758,500 | |||
Derivative warrant liabilities at December 31, 2020 | $ | 27,249,130 | ||
ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES |
ITEM 9A. | CONTROLS AND PROCEDURES |
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Principal Executive Officer and Principal Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2020. On March 26, 2021, we filed our original Annual
Internal Control over Financial Reporting
ITEM 9B. | OTHER INFORMATION |
ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
Name | Age | Title | ||||||
Crane H. Kenney | 57 | Co-Chief Executive Officer | ||||||
Brett Varsov | 45 | Co-Chief Executive Officer | ||||||
Alexander D. Sugarman | 40 | Executive Vice President | ||||||
Joseph Beyrouty | 41 | Chief Financial Officer | ||||||
Evan Ellsworth | 34 | Vice President | ||||||
Jason Sondag | 38 | Vice President | ||||||
Thomas Ricketts | 55 | Co-Chairman and Director | ||||||
Brandon Gardner | 46 | Co-Chairman and Director | ||||||
Thomas Freston | 75 | Director | ||||||
Matthew Maloney | 45 | Director | ||||||
Assia Grazioli-Venier | 40 | Director |
Mr. Sugarman served as an associate with GSP from 2006 to 2009. Prior to his time at GSP, Mr. Sugarman was a financial analyst for the National Hockey League.
Mr. Gardner’s extensive industry experience and experience serving on the boards of several companies make him well-qualified to serve as a member of our Board.
right to vote on the appointment of directors during such time. These provisions of our amended and restated memorandum and articles of association may only be amended by a special resolution passed by a majority of at least 90% of our ordinary shares voting in a general meeting. In accordance with the Nasdaq corporate governance requirements, we are not required to hold an annual general meeting until one year after our first fiscal year end following our listing on Nasdaq. The term of office of each of our directors will expire at our second annual general meeting. We may not hold an annual general meeting until after we complete our Business Combination. Subject to any other special rights applicable to the shareholders, any vacancies on our Board may be filled by the affirmative vote of a majority of the directors present and voting at the meeting of our Board or by a majority of the holders of our Founder Shares.
Marquee Raine Acquisition Sponsor LP will be provided to us free of charge. In addition, our Sponsor or any of our existing executive officers and directors, or any of their respective affiliates, including Ricketts SPAC Investment LLC and Raine Securities LLC, and other entities affiliated with Marquee and The Raine Group, will be paid a finder’s fee, consulting fee or other compensation and reimbursed for any
Individual | Entity | Entity’s Business | Affiliation | |||
Crane H. Kenney |
| Professional Sports | Principal Executive Officer | |||
Hickory Street | Investment | President | ||||
Marquee 360 | Sports | Executive Vice President | ||||
Marquee Sports Network | Entertainment | Board of Managers | ||||
Brett Varsov | The Raine Group | Investment | Partner | |||
Reigning Champs | Sports | Director | ||||
Alexander D. Sugarman |
| Professional Sports | Executive Vice President, Business Operations and Chief Strategy Officer | |||
Hickory Street | Investment | Vice President | ||||
Marquee 360 | Entertainment | Vice President | ||||
Marquee Sports Network | Sports | Board Observer | ||||
Joseph Beyrouty | The Raine Group | Investment | Chief Financial Officer—Management Company | |||
Evan Ellsworth | The Raine Group | Investment | Vice President | |||
The International Theological Seminary | Non-Profit | Director | ||||
Jason Sondag | Professional Sports | Vice President, Strategy and Development | ||||
Thomas Ricketts | Professional Sports | Executive Chairman | ||||
Choose Chicago | Tourism | Director | ||||
Hickory Street | Investment | Executive Vice President | ||||
Incapital | Investment | Chairman | ||||
Marquee 360 | Entertainment | President | ||||
Marquee Sports Network | Sports | Board of Managers | ||||
Meijer, Inc. | Supermarket | Director | ||||
The Field Museum | Non-Profit | Director | ||||
The Executive Club of Chicago | Non-Profit | Director | ||||
Wood Family Foundation | Non-Profit | Director |
Brandon Gardner | The Raine Group | Investment | Partner, Co-Founder, President and Chief Operating Officer | ||||||
Foursquare | Technology | Director | |||||||
Moonbug Entertainment | Media | Director | |||||||
Imagine Entertainment | Media | Director | |||||||
Thrill One | Sports | Director | |||||||
Reigning Champs | Sports | Director | |||||||
Olo | Mobile Application | Director |
Thomas Freston | Firefly3 | Investment | Principal | |||
ONE Campaign | Non-Profit | Board Chairman | ||||
DreamWorks Animation | Media | Director | ||||
Moby Media | Media | Director | ||||
Vice | Media | Director | ||||
The Asia Society | Non-Profit | Trustee | ||||
Matthew Maloney | Grubhub | Technology | Chief Executive Officer | |||
Chicago Booth School of Business Polsky Center for Entrepreneurship | Non-Profit | Director | ||||
Museum of Science and Industry, Chicago | Non-Profit | Director | ||||
Assia Grazioli-Venier | Muse Capital | Investment | Partner, Co-Founder | |||
Juventus Football Club | Sports | Director | ||||
AllRaise | Non-Profit | Co-Chair | ||||
Impact46 | Investment | Director |
(1) | Includes Cubs and certain of its subsidiaries and other affiliates. |
(2) | Includes Hickory Street Capital and certain of its subsidiaries and other affiliates. |
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ITEM 11. | EXECUTIVE COMPENSATION |
management. It is unlikely the amount of such compensation will be known at the time of the proposed Business Combination, because the directors of the post-combination business will be responsible for determining executive officer and director compensation. Any compensation to be paid to our executive officers will be determined, or recommended to the Board for determination, either by a compensation committee constituted solely by independent directors or by a majority of the independent directors on our Board.
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS |
Name and Address of Beneficial Owner(1) | Number of Shares Beneficially Owned(2) | Percentage of Shares of Outstanding Class A Ordinary Shares | ||||||
Marquee Raine Acquisition Sponsor LP(3) | 9,268,750 | 19.8 | % | |||||
Crane H. Kenney | — | * | ||||||
Brett Varsov | — | * | ||||||
Alexander D. Sugarman | — | * | ||||||
Joseph Beyrouty | — | * | ||||||
Evan Ellsworth | — | * | ||||||
Jason Sondag | — | * | ||||||
Thomas Ricketts | — | * | ||||||
Brandon Gardner | — | * | ||||||
Thomas Freston | 25,000 | * | ||||||
Matthew Maloney | 25,000 | * | ||||||
Assia Grazioli-Venier | 25,000 | * | ||||||
All officers and directors as a group (11 individuals) | 9,343,750 | 20.0 | % |
Name and Address of Beneficial Owner(1) | Number of Shares Beneficially Owned(2) | Percentage of Shares of Outstanding Class A Ordinary Shares | ||||||
Marquee Raine Acquisition Sponsor LP(3) | 9,268,750 | 19.8 | % | |||||
Crane H. Kenney | — | * | ||||||
Brett Varsov | — | * | ||||||
Alexander D. Sugarman | — | * | ||||||
Joseph Beyrouty | — | * | ||||||
Evan Ellsworth | — | * | ||||||
Jason Sondag | — | * | ||||||
Thomas Ricketts | — | * | ||||||
Brandon Gardner | — | * | ||||||
Thomas Freston | 25,000 | * | ||||||
Matthew Maloney | 25,000 | * | ||||||
Assia Grazioli-Venier | 25,000 | * | ||||||
All officers and directors as a group (11 individuals) | 9,343,750 | 20.0 | % |
* | Less than one percent. |
(1) | Unless otherwise noted, the business address of each of our shareholders is 65 East 55th Street, 24th Floor New York, NY 10022. |
(2) | Interests shown consist solely of Founder Shares, classified as Founder Shares. Such shares will automatically convert into Class A Ordinary Shares on the first business day following the completion of our Business Combination. |
(3) | Marquee Raine Acquisition Sponsor GP Ltd. is the general partner of Marquee Raine Acquisition Sponsor LP. Raine Holdings AIV LLC is the sole member of Raine SPAC Holdings LLC, which, in turn, is the sole member of Raine RR SPAC SPV I LLC, which owns a 50% interest in each of Marquee Raine Acquisition Sponsor GP Ltd. and Marquee Raine Acquisition Sponsor LP. Ricketts SPAC Investment LLC is the manager of Marquee Sports Holdings SPAC I, LLC, which owns a 50% interest in each of Marquee Raine Acquisition Sponsor GP Ltd. and Marquee Raine Acquisition Sponsor LP. Based upon the relationships among the entities described in this footnote, such entities may be deemed to beneficially own the securities reported herein. Each of the entities described in this footnote disclaims beneficial ownership of the securities held directly or indirectly by such entities, except to the extent of their respective pecuniary interests. |
ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
The initial shareholders agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (a) one year after the completion of the Business Combination and (b) upon completion of the Business Combination, (x) if the last reported sale price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any
proceeds held outside the Trust Account to repay the working capital loans but no proceeds held in the Trust Account would be used to repay the working capital loans. Except for the foregoing, the terms of such working capital loans, if any, have not been determined and no written agreements exist with respect to such loans. The working capital loans would either be repaid upon completion of a Business Combination, without interest, or, at the lenders’ discretion, up to $1.5 million of such working capital loans may be convertible into warrants of the post Business Combination entity at a price of $1.50 per warrant. The warrants would be identical to the Private Placement Warrants. To date, the Company had no borrowings under the working capital loans.
ITEM 15. | EXHIBITS, AND FINANCIAL STATEMENT SCHEDULES |
(a) | The following documents are filed as part of this Form 10-K/A: |
(b) | Exhibits: The exhibits listed in the accompanying index to exhibits are filed or incorporated by reference as part of this Form 10-K/A. |
32.1* | ||
32.2* | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101.INS* | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because iXBRL tags are embedded within the Inline XBRL document). | |
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.SCH* | Inline XBRL Taxonomy Extension Schema Document. | |
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB* | Inline XBRL Taxonomy Extension Labels Linkbase Document. | |
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
104* | Cover Page Interactive Data File, formatted in Inline XBRL (included within the Exhibit 101 attachments). |
* Filed herewith.
* | Filed herewith. |
** | Previously filed. |
† | Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request. |
+ | Indicates a management contract or compensatory plan, contract or arrangement. |
| ENJOY TECHNOLOGY, INC. | |||||
Date: |
| By: | /s/ | |||
| Fareed Khan | |||||
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