As filed with the U.S. Securities and Exchange Commission on June 22,July 13, 2020.
Registration No.333-[●] 333-239342
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 2
to
FORMS-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Pershing Square Tontine Holdings, Ltd.
(Exact name of registrant as specified in its charter)
Delaware | 6770 | 85-0930174 | ||
(State or Other Jurisdiction of Incorporation or Organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
787 Eleventh Avenue, 9th Floor
New York, New York 10019
(212)813-3700
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)
Steve Milankov, Esq.
787 Eleventh Avenue, 9th Floor
New York, New York 10019
(212)813-3700
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)
Copies to:
Stephen Fraidin, Esq. Gregory P. Patti, Jr., Esq. | Paul D. Tropp, Esq. Christopher Capuzzi, Esq. Ropes & Gray LLP 1211 Avenue of the Americas New York, New York 10036 (212)596-9000 |
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this registration statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”), check the following box. ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule12b-2 of the Securities Exchange Act of 1934, as amended. (Check one):
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☐ | |||
(Do not check if a smaller reporting company) | Emerging growth company | ☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
CALCULATION OF REGISTRATION FEE
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Title of Each Class of Security Being Registered | Amount Registered | Proposed Maximum Offering Price per Security(1) | Proposed Aggregate Offering Price(1) | Amount of Registration Fee | ||||
Units, each consisting of one share of Class A common stock, $0.0001 par value, andone-ninth of one redeemable warrant(2) | 172,500,000 Units | $20.00 | $3,450,000,000 | $447,810.00 | ||||
Shares of Class A common stock included as part of the units | 172,500,000 Shares | — | — | —(3) | ||||
Redeemable warrants included as part of the units | 19,166,666 Warrants | — | — | —(3) | ||||
Redeemable warrants to be distributed on a pro-rata basis to the holders of record of Class A common stock issued in this offering that are outstanding immediately after any redemptions of Class A common stock in connection with the initial business combination(4) | 38,333,333 Warrants | — | — | —(3) | ||||
Contingent rights(5) | 172,500,000 Rights | — | — | —(3) | ||||
Total | $3,450,000,000 | $447,810.00 | ||||||
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Title of Each Class of Security Being Registered | Amount Registered | Proposed Maximum Offering Price per Security(1) | Proposed Aggregate Offering Price(1) | Amount of Registration Fee | ||||
Units, each consisting of one share of Class A common stock, $0.0001 par value, and one-ninth of one redeemable warrant | 200,000,000 Units | $20.00 | $4,000,000,000 | $519,200.00 | ||||
Shares of Class A common stock included as part of the units | 200,000,000 Shares | — | — | —(2) | ||||
Redeemable warrants included as part of the units | 22,222,222 Warrants | — | — | —(2) | ||||
Redeemable warrants to be distributed on a pro-rata basis to the holders of record of Class A common stock issued in this offering that are outstanding immediately after any redemptions of Class A common stock in connection with the initial business combination(3) | 44,444,444 Warrants | — | — | —(2) | ||||
Contingent rights(4) | 200,000,000 Rights | — | — | —(2) | ||||
Total | $4,000,000,000 | $519,200.00(5) | ||||||
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(1) | Estimated solely for the purpose of calculating the registration fee. |
(2) |
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No fee pursuant to Rule 457(g). |
|
The contingent rights refer to the right attached to each share of Class A common stock issued in this offering to receive a distribution, on a pro-rata basis, of |
(5) | $447,810.00 was previously paid. |
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED JUNE 22,JULY 13, 2020
PRELIMINARY PROSPECTUS
$3,000,000,0004,000,000,000
Pershing Square Tontine Holdings, Ltd.
150,000,000200,000,000 Units
Pershing Square Tontine Holdings, Ltd., a Delaware corporation, is a newly organized blank check company 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, which we refer to throughout this prospectus as our initial business combination. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, initiatedengaged in any substantive discussions, directly or indirectly, with any business combination target. Our sponsor, Pershing Square TH Sponsor, LLC, a Delaware limited liability company (“Sponsor”), is an affiliate of Pershing Square Capital Management, L.P. (“PSCM”), a registered investment advisor under the Investment Advisers Act of 1940, as amended, with approximately $10.7$10.3 billion of assets under management as of June 9,30, 2020. Our sponsorSponsor is wholly owned by Pershing Square Holdings, Ltd., a Guernsey company, Pershing Square, L.P., a Delaware limited partnership, and Pershing Square International, Ltd., threea Cayman Islands exempted company, each of which is an investment fundsfund managed by PSCM.PSCM (the “Pershing Square Funds”).
This is an initial public offering of our securities. Each unit has an offering price of $20.00 and consists of one share of our Class A common stock, par value $0.0001 per share (our “Class A Common Stock”), andone-ninth of one redeemable warrant (or 16,666,66622,222,222 redeemable warrants in the aggregate, assuming no exercise of the underwriters’ overallotment option), which we refer to as the “detachable redeemable warrants.”“Distributable Redeemable Warrants”). We expect the Class A common stockCommon Stock and detachable redeemable warrantsDistributable Redeemable Warrants comprising the units to begin separate trading on the NYSE on the 52nd day following the date of this prospectus, subject to the conditions described below. At such time, our public stockholders will hold Class A common stockCommon Stock and detachable redeemable warrantsDistributable Redeemable Warrants separately and will no longer hold units, and the units will no longer trade or be listed on the NYSE. In addition, our amended and restated certificate of incorporation will provideprovides that an aggregate of 33,333,33344,444,444 redeemable warrants (assuming no exercise of the underwriters’ overallotment option) will be distributed on a pro-rata basis only to holders of record of the Class A common stockCommon Stock issued in this offering (whether acquired in this offering or afterwards)afterward) that are outstanding after the time at which we redeem any shares of Class A common stockCommon Stock that the holders thereof have elected to redeem in connection with our initial business combination (which redemption time we refer to as the “initial business combination redemption time”“Initial Business Combination Redemption Time”). We refer to such warrants as the “distributable“Distributable Tontine redeemable warrants”Redeemable Warrants” and, collectively with the detachable redeemable warrants,Distributable Redeemable Warrants, as the “redeemable warrants.“Redeemable Warrants.” The distributableDistributable Tontine redeemable warrantsRedeemable Warrants will be distributed at the “Tontine distribution time,Distribution Time,” which will be immediately after the initial business combination redemption timeInitial Business Combination Redemption Time and immediately before the closing of our initial business combination.
The right of any public stockholder to receive distributableDistributable Tontine redeemable warrantsRedeemable Warrants with respect to each share of Class A common stockCommon Stock they hold is contingent upon such share of Class A common stockCommon Stock not being redeemed in connection with our initial business combination. The number of distributableDistributable Tontine redeemable warrantsRedeemable Warrants to be distributed in respect of each share of unredeemed Class A common stockCommon Stock is contingent upon the aggregate number of shares of Class A common stockCommon Stock that are redeemed in connection with our initial business combination. The right to receive distributableDistributable Tontine redeemable warrantsRedeemable Warrants will remain attached to our Class A common stockCommon Stock and will not be separately transferrable,transferable, assignable or salable. Holders of shares of Class A common stockCommon Stock issued in this offering (whether acquired by the holder thereof during or after this offering) will be entitled to receive the distributableDistributable Tontine redeemable warrantsRedeemable Warrants only in respect of shares of Class A common stockCommon Stock that they have not redeemed.
Each whole redeemable warrant entitles the holder thereof to purchase one share of our Class A common stockCommon Stock at a price of $23.00 per share, subject to adjustment as described in this prospectus, and only whole redeemable warrantsRedeemable Warrants are exercisable. The redeemable warrantsRedeemable Warrants will become exercisable on the later of 30 days after the completion of our initial business combination or 12 months from the closing of this offering, and will expire five years after the completion of our initial business combination or earlier upon redemption or liquidation, as described in this prospectus. No fractional redeemable warrantsRedeemable Warrants will be issued upon detachmentthe separation or distribution of the redeemable warrants,Redeemable Warrants, as applicable, no cash will be paid in lieu of issuing fractional redeemable warrantsRedeemable Warrants and only whole redeemable warrantsRedeemable Warrants will trade.
We have also granted the underwriters a45-day option to purchase up to an additional 22,500,000 units to cover over-allotments, if any. If the underwriters fully exercise such option, we will issue an additional 22,500,000 shares of Class A common stock and 2,500,000 detachable redeemable warrants as part of the units, and will distribute at the Tontine distribution time an additional 5,000,000 distributable Tontine redeemable warrants.
Prior to this offering, we entered into a forward purchase agreementForward Purchase Agreement with each of the Pershing Square L.P., a Delaware limited partnership, Pershing Square International, Ltd., a Cayman Islands exempted company, and Pershing Square Holdings, Ltd., a Guernsey companyFunds (which, in such capacity, we refer to collectively as the “forward purchasers”“Forward Purchasers”), each of which is a member of our sponsor and is managed by PSCM.. Pursuant to the forward purchase agreement,Forward Purchase Agreement, the forward purchasersForward Purchasers have agreed to purchase an aggregate of $1,000,000,000 of units (which we refer to as the “committed forward purchase units”“Committed Forward Purchase Units”), which will have a purchase price of $20.00 and consist of one share of Class A common stockCommon Stock andone-third of one warrant. The purchase of the 50,000,000 committed forward purchase unitsCommitted Forward Purchase Units will take place in one or more private placements in such amounts and at such time or times as the forward purchasersForward Purchasers determine, with the full amount to have been purchased no later than simultaneously with the closing of our initial business combination. The forward purchasers’Forward Purchasers’ obligation to purchase the committed forward purchase unitsCommitted Forward Purchase Units may not be transferred to any other parties.
The forward purchase agreementForward Purchase Agreement also provides that the forward purchasersForward Purchasers may elect to purchase up to an additional aggregate of $2,000,000,000 of units (which we refer to as the “additional forward purchase units”“Additional Forward Purchase Units”), which will also have a purchase price of $20.00 and consist of one share of Class A common stockCommon Stock andone-third of one warrant. Any elections to purchase the up to 100,000,000 additional forward purchase unitsAdditional Forward Purchase Units will also take place in one or more private placements, in such amounts and at such time or times as the forward purchasersForward Purchasers determine, but no later than simultaneously with the closing of our initial business combination. We and the forward purchasersForward Purchasers may determine, by mutual agreement, to increase the number of additional forward purchase unitsAdditional Forward Purchase Units at any time prior to our initial business combination. The forward purchasers’Forward Purchasers’ right to purchase the additional forward purchase unitsAdditional Forward Purchase Units may be transferred, in whole or in part, to any entity that is managed by PSCM, but not to third parties. The forward purchasers’Forward Purchasers’ obligation or right, as applicable, to purchase the forward purchase unitsForward Purchase Units will be allocated among the forward purchasersForward Purchasers from time to time as described herein. In addition, certain of our independent directors have committed to purchase an aggregate of $6,000,000 of such units, as further described herein, which, collectively with the Committed Forward Purchase Units and Additional Forward Purchase Units, we refer to as the “Forward Purchase Units.” The proceeds of all purchases made pursuant to the forward purchase agreementof Forward Purchase Units will be deposited into our operating account.
We refer to the committed forward purchase units and the additional forward purchase units collectively as the “forward purchase units.” We refer to the shares of Class A common stockCommon Stock and warrants constituting the forward purchase unitsForward Purchase Units as the “forward purchase shares”“Forward Purchase Shares” and “forward purchase warrants,“Forward Purchase Warrants,” respectively, and collectively with the shares of Class A common stockCommon Stock underlying the forward purchase warrants,Forward Purchase Warrants, the “forward purchase securities.“Forward Purchase Securities.” The forward purchase sharesForward Purchase Shares will have no right to receive any distributableDistributable Tontine redeemable warrants,Redeemable Warrants, no redemption rights in connection with our initial business combination or in connection with certain amendments to our amended and restated certificate of incorporation and will have no rights to liquidating distributions from our trust account in the event that we fail to complete our initial business combination within the prescribed time frame.timeframe. The forward purchase securities,Forward Purchase Warrants will have no right to vote on amendments to the warrant agreement prior to our initial business combination, except with respect to certain provisions relating solely to the transfer of the Forward Purchase Securities. The Forward Purchase Securities, as long as they are held by the forward purchasersForward Purchasers or their permitted transferees, will have certain transfer restrictions and registration rights. In all other respects, the terms of the forward purchase sharesForward Purchase Shares and forward purchase warrants,Forward Purchase Warrants, respectively, will be identical to the terms of the shares of Class A common stockCommon Stock and the redeemable warrantsRedeemable Warrants included in the units being issued in this offering.
Concurrently with this offering, our sponsorSponsor will purchase a warrantwarrants (which we refer to as the “sponsor warrant”“Sponsor Warrants”) for an aggregate purchase price of $[●].$65,000,000. The fair market value of the sponsor warrantSponsor Warrants as of the date of this offering was determined by us to be $[●]$65,000,000 in consultation with a third-party, nationally recognized valuation firm. The valuation firm reviewed and discussed with us our methodology, procedures and assumptions for valuing the sponsor warrant.Sponsor Warrants (see “Description of Securities—Valuation of Sponsor Warrants.”) Taking into account such consultation, we concluded that our methodology, procedures and assumptions are reasonable. The sponsor warrantSponsor Warrants will becomegenerally not be salable, transferable or exercisable [●]until three years after the date of our initial business combination, and will only then be exercisable in whole or in part, for that number of shares constituting
5.95% of the common shares of the post-combination entitybusiness on a fully diluted basis (including all common stock issuable upon the conversion or exercise of outstanding securities, whether or not convertible or exercisable at such time) at the time immediately following our initial business combination, at an exercise price equal to $24.00 per common share of the post-combination entity.business. The sponsor warrantSponsor Warrants will have a term of ten10 years from the consummation of our initial business combination. The sponsor warrantSponsor Warrants will not be redeemable by us and will be exercisable, in whole or in part, on a cashless basis (in addition to being exercisable for cash). The sponsor warrant and the shares underlying the sponsor warrantSponsor Warrants will be subject to certain transfer restrictions and, along with the shares of Class A Common Stock underlying the Sponsor Warrants, will have certain registration rights described herein.
Each of our directors, other than William A. Ackman, our Chairman and Chief Executive Officer, will behas been given the opportunity to purchase, in a private placement concurrently with this offering, a warrant (each of which we refer to as a “director warrant”“Director Warrant”) for a purchase price of up to $500,000.$812,500. Our directors have agreed to purchase an aggregate of $2,837,500 of Director Warrants. Each director warrantDirector Warrant will be exercisable for a percentage of the common shares of the post-combination entitybusiness (on a fully diluted basis) calculated as the purchase price of such director warrantDirector Warrant divided by the sponsor warrant purchase price of [●],the Sponsor Warrants, multiplied by 5.95%, reflecting fair market value as determined with respect to the sponsor warrant. AssumingSponsor Warrants. The Director Warrants will have terms identical to those of the maximum $2,000,000 amountSponsor Warrants (other than with respect to certain permitted transfers), and have an exercise price per common share of $24.00. The Sponsor Warrants and the Director Warrants that our directors warrants is purchased, the director warrants and sponsor warrant,have agreed to purchase will be exercisable, in the aggregate, will be exercisable for that number of shares constituting [●]%approximately 6.21% of the common shares of the post-combination entitybusiness on a fully diluted basis. The director warrants and the shares underlying the director warrantsDirector Warrants will be subject to certain transfer restrictions and, along with the shares of Class A Common Stock underlying the Director Warrants, will have certain registration rights and will otherwise have terms identical to thosedescribed herein.
Of the proceeds from the sale of the sponsor warrant. Of the purchase price of the sponsor warrantSponsor Warrants and any director warrants,Director Warrants, approximately $30,000,000$35,000,000 will be deposited in the trust account described below, and the remainder will be held by us outside of the trust account in(in our operating account,account) and used to pay expenses in connection with this offering and operating expenses, including search costs for identifying a potential initial business combination and other expenses related to executing a potential initial business combination.
Unlike other blank check companies, our sponsorSponsor is not being afforded the opportunity to purchase 20% of our stock at a nominal price; our sponsorSponsor will, instead, purchase the sponsor warrantSponsor Warrants at its fair market value as described above, with an exercise price of $24.00 per share.share, as will our independent directors for their Director Warrants. Our sponsor,Sponsor and any director that purchases a director warrant,our independent directors will only participate in the value of our company if our stock price is at least 20% higher than the initial offering price in this offering (if such warrants are then-exercisable). Our sponsorSponsor and directors are paying fair market value (at the date of this offering) for the opportunity to realize any such gain.
As a result of this offering and the committed forward purchase, we expect to have a minimum of up to approximately $4,000,000,000$5,000,000,000 in equity capital (subject to redemptions in the case of the Class A common stockCommon Stock offered hereby) for use in our initial business combination (assuming that the additional forward purchase is not consummated and the underwriters’ over-allotment is not exercised and assuming no redemptions of the Class A common stock)Common Stock), and as much as $6,450,000,000$7,000,000,000 (assuming the additional forward purchase is consummated in full and the underwriters’ over-allotment is exercised in full and assuming no redemptions of the Class A common stock)Common Stock), in each case before expenses.expenses and not including the $6,000,000 of Forward Purchase Units certain of our directors have agreed to purchase. We believe that this large amount of potential equity capital distinguishes us from other blank check companies and will be attractive to potential large acquisition candidates in our initial business combination.
We will provide the holders of the shares of Class A common stockCommon Stock issued in this offering (whom we refer to as our “public stockholders”) with the opportunity to have all or a portion of such shares of Class A common stockCommon Stock redeemed upon the completion of our initial business combination at aper-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account described below as of five business days prior to the consummation of our initial business combination, including any interest earned on the funds held in the trust account and not previously released to us to pay our taxes, divided by the number of then outstandingthen-outstanding shares of Class A common stockCommon Stock that were sold as part of the units in this offering, subject to the limitations described herein. If we are unable to complete our business combination within 24 months from the closing of this offering (or 30 months from the closing of this offering if we have executed a letter of intent, agreement in principle or definitive agreement for our initial business combination within 24 months from the closing of this offering but have not completed our initial business combination within such 24 month24-month period), we will redeem 100% of the shares of Class A common stockCommon Stock issued in this offering at aper-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any interest earned on the funds held in the trust account and not previously released to us to pay our taxes (less $100,000 of interest to pay dissolution expenses), divided by the then-outstanding number of such shares, subject to applicable law and as further described herein.
Per Unit | Total | Per Unit | Total | |||||||||||||
Public offering price | $ | 20.00 | $ | 3,000,000,000 | $ | 20.00 | $ | 4,000,000,000 | | |||||||
Underwriting discounts and commissions(1) | $ | 0.575 | $ | 86,250,000 | ||||||||||||
Up-front underwriting discount(1) | $ | 0.18 | $ | 35,000,000 | ||||||||||||
Deferred underwriting commissions(2) | $ | 0.28 | $ | 56,250,000 | ||||||||||||
Proceeds, before expenses, to us | $ | 19.425 | $ | 2,913,750,000 | $ | 19.54 | $ | 3,908,750,000 |
(1) | Includes |
(2) | Includes $0.28 per unit, or $56,250,000 |
We are an “emerging growth company” under applicable federal securities laws and will be subject to reduced public company reporting requirements. Investing in our securities involves a high degree of risk. See the section of this prospectus entitled “Risk Factors” beginning on page 4146 for a discussion of information that should be considered in connection with an investment in our securities. Investors will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings.
Neither the Securities and Exchange Commission (“SEC”) nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The underwriters are offering the units for sale on a firm commitment basis. The underwriters expect to deliver the units to the purchasers on or about , 2020.
Joint Book-Running Managers
Citigroup | Jefferies | UBS Investment Bank |
Co-lead Managers
CastleOak Securities, L.P. | Loop Capital Markets | Ramirez & Co., Inc. | Siebert Williams Shank |
Co-Managers
Academy Securities | C.L. King & Associates | Roberts and Ryan |
, 2020
Our sponsorSponsor owns 100 shares of our Class B common stock,Common Stock, par value $0.0001 per share (“Class B Common Stock”) each of which carries that number of votes such that, in the aggregate, the holders of Class B common stockCommon Stock will have 20.0% of the voting power of the issued and outstanding shares of common stock immediately following this offering, after which timeoffering. Because the number of votes carriedvoting power held by each share of Class B common stockCommon Stock will not be subject toadjusted following this offering, upon the issuance of any further adjustment.Forward Purchase Units, the Class B Common Stock will have, in the aggregate, less than 20.0% of the voting power of the then-issued and outstanding shares of our common stock. The 100 shares of Class B common stockCommon Stock will automatically convert into 100 shares of Class A common stockCommon Stock at a one-to-one ratio at the time of our initial business combination, subject to adjustment as provided herein.combination.
Currently, there is no public market for our units, Class A common stockCommon Stock or redeemable warrants.Redeemable Warrants. We have applied to list our units on the New York Stock Exchange, or the NYSE, under the symbol “PSTH.U.” We expect that our units will be listed on the NYSE on or promptly after the date of this prospectus. We cannot guarantee that our securities will be approved for listing on the NYSE. The Class A common stockCommon Stock and detachable redeemable warrantsDistributable Redeemable Warrants comprising the units will begin separate trading on the 52nd day following the date of this prospectus unless Citigroup Global Markets Inc., Jefferies LLC and UBS Securities LLC inform us of their decision to allow earlier separate trading, subject to our filing a Current Report on Form8-K with the Securities and Exchange Commission, or the SEC, containing an audited balance sheet reflecting our receipt of the gross proceeds of this offering and issuing a press release announcing when such separate trading will begin. At the time that the Class A common stockCommon Stock and detachable redeemable warrantsDistributable Redeemable Warrants comprising the units begin separate trading, holders will hold the separate securities and no longer hold units (without any action needing to be taken by the holders), and the units will no longer trade or be listed on the NYSE. We expect that the Class A common stockCommon Stock and detachable redeemable warrantsDistributable Redeemable Warrants will be listed on the NYSE under the symbols “PSTH” and “PSTH.WS,” respectively. The distributableDistributable Tontine redeemable warrantsRedeemable Warrants will trade on the first trading day following their issuance at the Tontine distribution time,Distribution Time, will be fully fungible with the detachable redeemable warrantsDistributable Redeemable Warrants, and will also trade under the symbol “PSTH.WS.”
Of the proceeds we receive from this offering and the sale of the sponsor warrantSponsor Warrants and any director warrantsDirector Warrants as described in this prospectus, $3.0 billion or $3.45 billion if the underwriters’ over-allotment option is exercised in full$4,000,000,000 ($20.00 per unit) will be deposited into a J.P. Morgan Chase & Co. trust account located in the United States, with Continental Stock Transfer & Trust Company acting as trustee, and approximately $[●] million$26,337,800 will be available to pay fees and expenses in connection with the closing of this offering and for working capital following the closing of this offering. Except with respect to any interest earned on the funds held in the trust account that may be released to us to pay our tax obligations, funds deposited in the trust account will not be released from the trust account until the earliest to occur of (a) the completion of our initial business combination, (b) the redemption of the shares of Class A common stockCommon Stock issued in this offering that are properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (i) to modify the substance or timing of our obligation to allow redemptions in connection with our initial business combination, (ii) to modify the substance or timing of our obligation to redeem 100% of the shares of Class A common stockCommon Stock issued in this offering if we do not complete our initial business combination within 24 months (or 30 months, as applicable) from the closing of this offering (or 30 months, as applicable) or (ii)(iii) with respect to any other provision relating to stockholders’ rights orpre-initial business combination activity, and (c) the redemption of the shares of ourthe Class A common stockCommon Stock issued in this offering if we are unable to complete our business combination within 24 months (or 30 months, as applicable) from the closing of this offering, subject to applicable law. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public stockholders.
We are responsible for the information contained in this prospectus. We have not, and the underwriters have not, authorized anyone to provide you with different information, and we take no responsibility for any other information others may give to you. We are not, and the underwriters are not, making an offer to sell securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | ||||
F-1 |
i
This summary only highlights the more detailed information appearing elsewhere in this prospectus. As this is a summary, it does not contain all of the information that you should consider in making an investment decision. You should read this entire prospectus carefully, including the information under the section of this prospectus entitled “Risk Factors” and our financial statements and the related notes included elsewhere in this prospectus, before investing.
Unless otherwise stated in this prospectus or the context otherwise requires, references to:
“additional forward purchase units”Additional Forward Purchase Units” are to the up to 100,000,000 units (or such greater amount as determined by mutual agreement of the company and the forward purchasers)Forward Purchasers), each consisting of one share of Class A common stockCommon Stock andone-third of one warrant, that the forward purchasersForward Purchasers may elect to purchase pursuant to the forward purchase agreement;Forward Purchase Agreement;
“affiliate transferees”amended and restated certificate of incorporation” are to our second amended and restated certificate of incorporation;
“Affiliate Transferees” are to any entity that is managed by PSCM;
“we,” “us,” “company” or “our company” are to Pershing Square Tontine Holdings, Ltd.;
“common stock” are to our Class A common stockCommon Stock and our Class B common stock,Common Stock, collectively;
“committed forward purchase units”common shares” are to the common stock, membership interests, units or other equity security of the continuing publicly traded corporation following our initial business combination, if such post-combination business is not the company, and to our Class A Common Stock if we are the continuing publicly traded corporation following our initial business combination;
“Committed Forward Purchase Units” are to the 50,000,000 units, each consisting of one share of Class A common stockCommon Stock andone-third of one warrant, that the forward purchasersForward Purchasers have committed to purchase pursuant to the forward purchase agreement;Forward Purchase Agreement;
“director warrants”Director Forward Purchase Agreement” are to an agreement providing for the sale of an aggregate amount of $6,000,000 of our Forward Purchase Units to certain of our independent directors, in one or more private placements in such amounts and at such time or times as the forward purchase directors determine, but no later than simultaneously with the closing of our initial business combination;
“Director Forward Purchase Units” are to the Forward Purchase Units to be purchased by certain of our independent directors pursuant to the Director Forward Purchase Agreement;
“Director Forward Purchasers” are to those of our independent directors who are party to the Director Forward Purchase Agreement and have agreed to purchase our Forward Purchase Units pursuant thereto;
“Director Warrants” are to the warrants that mayto be purchased by our directors, other than Mr. Ackman, in private placements simultaneously with the closing of this offering, at a purchase price of up to $500,000,$812,500 per director, which will be exercisable, in whole or in part, for a percentage of the common shares of the post-combination entitybusiness (on a fully diluted basis) proportionate to the purchase price of such warrant relative to the purchase price of the sponsor warrant,Sponsor Warrants, and which will be subject to certain transfer restrictions and have certain registration rights, and otherwise have terms identical to those of the sponsor warrant;Sponsor Warrants;
“forward purchase agreement”Forward Purchase Agreement” are to an agreement providing for the sale of our forward purchase unitsForward Purchase Units to the forward purchasers (or,Pershing Square Funds (in their capacity as the Forward Purchasers) or, in the case of the additional forward purchase units, the affiliate transferees) in one or more private placements in such amounts and at such time or times as the forward purchasers determine, but no later than simultaneously with the closing of our initial business combination;
Additional Forward Purchase Units, to the Affiliate Transferees, in one or more private placements in such amounts and at such time or times as the Forward Purchasers determine, but no later than simultaneously with the closing of our initial business combination; |
“forward purchase securities”Forward Purchase Securities” are to the forward purchase shares, forward purchase warrants,Forward Purchase Shares, Forward Purchase Warrants, and shares of Class A common stockCommon Stock underlying the forward purchase warrants;Forward Purchase Warrants;
“forward purchase shares”Forward Purchase Shares” are to the shares of our Class A common stockCommon Stock to be issued pursuant to the forward purchase agreement,Forward Purchase Agreement and to certain directors purchasing Forward Purchase Units, which will generally have identical terms to those of the shares of Class A common stockCommon Stock issued in this offering, except as described herein;
“forward purchase warrants”Forward Purchase Warrants” are to the warrants to be issued pursuant to the forward purchase agreement,Forward Purchase Agreement and to certain directors purchasing Forward Purchase Units, which will generally have identical terms to those of the redeemable warrantsRedeemable Warrants issued in this offering, except as described herein;
“forward purchase units”Forward Purchase Units” are to the committed forward purchase unitsCommitted Forward Purchase Units and the additional forward purchase unitsAdditional Forward Purchase Units issuable pursuant to the Forward Purchase Agreement, and the Forward Purchase Units issuable to the forward purchase agreement;directors;
“forward purchasers”Forward Purchasers” are to the Pershing Square Funds and, for the avoidance of doubt, such term does not include the Director Forward Purchasers;
“Initial Business Combination Redemption Time” are to the time at which we redeem the shares of Class A Common Stock that the holders thereof have elected to redeem in connection with our initial business combination, which will occur prior to the consummation our initial business combination;
“Management” or our “Management Team” are to our directors, director nominees and officers;
“Pershing Square Funds” are to Pershing Square, L.P., a Delaware limited partnership, Pershing Square International, Ltd., a Cayman Islands exempted company, and Pershing Square Holdings, Ltd., a Guernsey company, each of which is a memberfunds are managed by PSCM and are, collectively, the members of our sponsorSponsor and is managed by PSCM;
“initial business combination redemption time” are to the time at which we redeem the shares of Class A common stock that the holders thereof have elected to redeem in connection with our initial business combination, which will occur shortly before the consummation our initial business combination.
“management” or our “management team” are to our directors, director nominees and officers;Forward Purchasers;
“public stockholders” are to the holders of the shares of Class A common stockCommon Stock issued in this offering (whether acquired during or after this offering), including our sponsorSponsor and management team,its affiliates and our Management Team, to the extent that such persons or entities purchase shares of the Class A common stockCommon Stock issued in this offering (whether acquired during or after this offering), provided that such status as a “public stockholder” shall only exist with respect to such shares;
“redeemable warrants”Redeemable Warrants” are to our detachable redeemable warrantsDistributable Redeemable Warrants included in the units issued in this offering and to the distributableDistributable Tontine redeemable warrantsRedeemable Warrants issuable to the remaining holders of our outstanding shares of our Class A common stockCommon Stock issued in this offering (after we redeem any shares of Class A common stockCommon Stock that the holders thereof have elected to redeem in connection with our initial business combination), and, for the avoidance of doubt, the term “redeemable warrants”“Redeemable Warrants” does not include the forward purchase warrants;Forward Purchase Warrants;
“sponsor”Registration Rights Agreement” are to an agreement requiring the company, following our initial business combination, to register for resale certain securities held by our Sponsor, director nominees, the Forward Purchasers and their permitted transferees;
“Sponsor” are to Pershing Square TH Sponsor, LLC, a Delaware limited liability company;
“sponsor warrant”Sponsor Warrants” are to the warrant purchased by our sponsorSponsor in a private placement simultaneously with the closing of this offering that will becomegenerally not be salable, transferable or exercisable [●]until three years after the date of our initial business combination, and will only then be exercisable in whole or in part, for that number of shares constituting 5.95% of the common shares of the post-combination entity on a fully diluted basis as of the time immediately following the initial business combination; and
number of shares constituting 5.95% of the common shares of the post-combination business on a fully diluted basis as of the time immediately following the initial business combination; and |
“Tontine distribution time”Distribution Time” are to the time at which the distributableDistributable Tontine redeemable warrantsRedeemable Warrants will be distributed, which will occur immediately after the initial business combination redemption timeInitial Business Combination Redemption Time and immediately prior to the closing of our initial business combination.
Each unit has an offering price of $20.00 and consists of one share of our Class A common stockCommon Stock andone-ninth of one detachable redeemable warrantDistributable Redeemable Warrant (or 16,666,666 detachable redeemable warrants22,222,222 Distributable Redeemable Warrants in the aggregate, assuming no exercise of the underwriters’ overallotment option)aggregate). In addition, an aggregate of 33,333,333 distributable44,444,444 Distributable Tontine redeemable warrants (assuming no exercise of the underwriters’ overallotment option)Redeemable Warrants will be distributed on a pro-rata basis to holders of record of our outstanding Class A common stockCommon Stock at the Tontine distribution time.Distribution Time. Each whole redeemable warrant entitles the holder thereof to purchase one share of our Class A common stockCommon Stock at a price of $23.00 per share, subject to adjustment as described in this prospectus, and only whole redeemable warrantsRedeemable Warrants are exercisable. No fractional redeemable warrantsRedeemable Warrants will be issued upon detachmentthe separation or distribution of our redeemable warrants,Redeemable Warrants, no cash will be paid in lieu of fractional redeemable warrantsRedeemable Warrants, and only whole redeemable warrantsRedeemable Warrants will trade. Accordingly, unless you purchase at least nine units, you will not be able to receive or trade a whole detachable redeemable warrant.Distributable Redeemable Warrant. The number of shares of Class A common stockCommon Stock that a public stockholder must hold to receive a whole distributable redeemable warrantDistributable Tontine Redeemable Warrant after the Tontine distribution timeDistribution Time will depend on the size of the pro-rata allocation of the distributableDistributable Tontine redeemable warrants.Redeemable Warrants.
Registered trademarks referred to in this prospectus are the property of their respective owners. Unless we tell you otherwise, the information in this prospectus assumes that the underwriters will not exercise their over-allotment option.
Our Company
General
We are a newly organized, blank check company incorporated in Delaware 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, which we refer to throughout this prospectus as our initial business combination.
Our sponsorSponsor is advised by Pershing Square Capital Management, L.P. (“Pershing Square” or “PSCM”), a registered investment adviser under the Investment Act of 1940, as amended, whichand the members of our Sponsor are the Pershing Funds.
Pershing Square was established in 2003, and had approximately $10.7$10.3 billion of assets under management and $9.3$8.9 billion of net assets under management as of June 9,30, 2020. Pershing Square has demonstrated a strong track record of historical performance. The compound annual rate of return and cumulative total return (net of fees) of Pershing Square, L.P.,L.P, the investment fund managed by Pershing Square with the longest track record, from its inception on January 1, 2004 to June 9,30, 2020, havehas materially exceeded that of its benchmark, the S&P 500 Index, over the same period.
In addition to Pershing Square, L.P., Pershing Square has managed three other investment funds, each of which (like Pershing Square, L.P.) has invested in various public securities over its period of operation. The compound annual rate of return and cumulative total return (net of fees) of two of these other funds have also materially exceeded that of the S&P 500 Index, while one fund has not exceeded the S&P 500 Index (in each case from the inception of such fund until its closing or as of June 30, 2020, as applicable). Pershing Square has also managed six co-investment vehicles, each of which invested in a single, publicly traded company. The
compound annual rate of return and cumulative total return (net of fees) of five of the co-investment vehicles materially exceeded that of the S&P 500 Index over their respective periods of operation, while one co-investment fund substantially underperformed the S&P 500 Index over its period of operation.
Pershing Square also served as co-sponsor of Justice Holdings, Ltd., awhich is the only special purpose acquisition company that Pershing Square has previously sponsored or co-sponsored. Justice Holdings, Ltd. raised approximately $1.5 billion in its initial public offering (including a $458 million investment by Pershing Square), whichand subsequently merged with Burger King Worldwide Inc., and later, Tim Hortons, to form Restaurant Brands International Inc. Pershing Square, through certain of the funds it manages, remains the second largest-largest investor in Restaurant Brands International Inc. The stock of Restaurant Brands International, Inc. has generated a compound annual total return of 20%19% since its merger with Justice Holdings, Ltd. in 2012. The members2012 (as of our sponsor are Pershing Square, L.P., Pershing Square International, Ltd., and Pershing Square Holdings, Ltd.June 30, 2020).
Our management teamManagement Team is led by William A. Ackman, our Chairman and Chief Executive Officer, who will work closely with the PSCM investment team and the other employees of, and resources available to, PSCM to fulfill our corporate mission. Mr. Ackman has spent 28 years in the investment management industry, the last 1617 years as CEO of PSCM. PSCM’s investment strategy involves the purchase of large minority stakes in high-quality, large capitalization, growth companies during periods when they have underperformed their potential. By working with management teams and boards of directors, PSCM has assisted its portfolio companies in creating substantial long-term value.
The Pershing Square investment teamInvestment Team is comprised of seven investment professionals with tenures at Pershing Square of 3 to 16 years, who prior to Pershing Square, served in analyst and associate roles at Apollo, Blackstone, KKR, Goldman Sachs, and Hellman & Friedman,Friedman. PSCM has 30 other accounting, legal, finance, and technology professionals who will support our company on anas-needed basis.
We believe that we will have substantial competitive advantages when compared with other blank check companies and other sources of equity capital.capital, such as private equity, growth equity and hedge funds, among others. We have these competitive advantages because of the amount of committed capital we have, our willingness to acquire a minority stake, our ability to give a private company access to public equity markets and the lower cost of capital of our structure compared to other blank check companies.
We will have the largest amount of committed capital of any blank check company upon the completion of this offering. As a result of this offering and the committed forward purchase,Committed Forward Purchase Units, we expect to have a minimum of up to approximately $4,000,000,000$5,000,000,000 in equity capital (subject to redemptions in the case of the Class A common stock offered hereby) for use in our initial business combination (assuming that the additional forward purchaseAdditional Forward Purchase is not consummated and the underwriters’ over-allotment is not exercised and assuming no redemptions of the Class A common stock)Common Stock), and as much as $6,450,000,000$7,000,000,000 (assuming the additional forward purchaseAdditional Forward Purchase is consummated in full and the underwriters’ over-allotment is exercised in full and assuming no redemptions of the Class A common stock)Common Stock offered hereby), in each case, before expenses. expenses and not including the $6,000,000 of Forward Purchase Units certain of our directors have agreed to purchase.
We intend to merge with one company through a transaction in which our stockholders (just prior to the initial business combination) will own a minority interest in the company that is created as a result of the initial business combination. We believe that a substantial majority of other investors in private companies are not prepared to (or are not able to) deploy $5,000,000,000 or more of cash in the acquisition of a minority interest in a company. While comparably sized or larger investment funds generally seek to acquire controlling or 100% interests in a company, we are willing to execute a transaction in which our stockholders will own a minority stake in a large-capitalization private company. As a result, we believe we will be one of the largest sources of cash equity capital for a private, single-company, minority investment in the world.
As the largest blank check company currently pursuing a business combination, we can offer a larger-capitalization private company (with market capitalization of $10,000,000,000 or more) the opportunity to gain
access to the public equity markets, without such company having to conduct its own initial public offering (“IPO”). Through a merger, we will be, in effect, facilitating the IPO of a large private company, enabling a private business to avoid the inherent costs and risks associated with the traditional IPO process.
We intend to pursue merger opportunities with private, large capitalization, high-quality, growth companies where our ownership in the merged company would generally represent a minority of shares outstanding at the time of the merger.companies. We will use PSCM’s substantial experience in identifying, analyzing, and determining business quality and the sustainable competitive advantages of a target company, as well as itsPSCM’s due diligence and negotiation expertise in executing a transaction.
We believe that our unique structure and our willingness to acquire a minority interest in a company will help facilitate the completion of a transaction on attractive terms. We believe that this unique structure will result in greater alignment and substantially less dilution than other blank check companies offer to a potential merger partner or stockholders, as explained in further detail below.
We believe the price at which we can, through a merger, acquire a minority interest in a large, high-quality business is substantially lower than the price—which would generally include a substantial control premium—that would be required to acquire a controlling interest in the same company. Through a merger, we will be, in effect, facilitating the initial public offering (the “IPO”) of a large private company, where the private business will avoid the inherent costs and risks associated with the traditional IPO process. Because of PSCM’s large commitment of capital to us and the economic incentives created by our Tontine warrant structure, we can provide greater certainty to a merger partner of a large amount of committed funds and a successful deal.
We believe that our unique structure and our willingness to acquire a minority interest in a company will help facilitate the completion of a transaction on attractive terms. We believe that our unique structure will result in greater alignment and substantially less dilution than other blank check companies offer to a potential merger partner or stockholders, as explained in further detail below.
Affiliates of our sponsorSponsor and our directors are investing a minimum of $1,000,000,000$1,006,000,000 of capital at the same price as our public stockholders. Concurrently with this offering, our sponsorSponsor will purchase the sponsor warrantSponsor Warrants for an aggregate purchase price of $[●].$65,000,000. The fair market value of the sponsor warrantSponsor Warrants as of the date of this offering was determined by the company to be $[●]$65,000,000 in consultation with a third-party, nationally recognized valuation firm. The valuation firm reviewed and discussed with us our methodology, procedures and assumptions for valuing the sponsor warrant.Sponsor Warrants. Taking into account such consultation, we concluded that our methodology, procedures and assumptions are reasonable.reasonable (see “Description of Securities—Valuation of Sponsor Warrants”). Since the sponsor warrantSponsor Warrants and Director Warrant have an exercise price that is 20% above the price of the units being sold in this offering, itthese warrants will not be dilutive until the newly merged company’s stock price increases to 20% above the price of the units, and the aggregate dilution thereafter will be limited to 5.95%. Assuming each director (other than Mr. Ackman) purchases a director warrant in the maximum amount of $500,000, the aggregate dilution from the sponsor warrantSponsor Warrant and director warrantsthe Director Warrants, upon their exercise, will be limited to [●]%approximately 6.21%. As a result, the effective cost of our capital to a merged company will be much lower than that of the substantial majority of other blank check companies.
We also believe that the economic and market dislocation resulting from theCOVID-19 pandemic, hasand the potential uncertainties created by the upcoming U.S. presidential election, create market conditions and a resulting set of investment opportunities in four principal areas that we intend to pursue.
First, as a result of the currently high degree of stock market and debt capital market volatility, it has become increasingly difficult for even a high-quality, well-managed, large capitalization company to execute a public offering on favorable terms. Completion of an initial public offering (an “IPO”)IPO is difficult, even for a business which has not been disrupted by theCOVID-19 crisis. The inherent nature of the IPO process—whereby the pricing, the ultimate terms of the offering, and even whether or not the offering can be completed remain unknown until the day of pricing of the offering—makes the IPO process inherently uncertain and risky. We believe that this uncertainty, risk, the related upfront expenses, and the significant time required to pursue an IPO have discouraged many large private companies from attempting to execute public offerings in the current environment. As the blank check company with the largest amount of committed capital from the forward purchasersForward Purchasers (affiliates of our sponsor)Sponsor)—a minimum of $1,000,000,000 and as much as $3,000,000,000 (or such greater amount as mutually agreed upon)—we believe that our ability to finalize the principal terms of a transaction with a merger partner prior to their
public disclosure will make us a more attractive alternative to a traditional public offering for a substantial number of large capitalization, high-quality growth companies, particularly in the current highly volatile environment.
The primary drawback to a company that is considering going public through a business combination with our company is that, as a special purpose acquisition company, we are required to permit our stockholders to redeem their shares in connection with the initial business combination at the per-share value of the trust account, which creates uncertainty with respect to the ultimate amount of capital we will have available at the time of our initial business combination. We believe that the substantial capital from our Forward Purchasers (equal to 25%, and as much as 75%, of the amount raised in this offering) significantly ameliorates this risk, as it provides committed capital to replace redeeming stockholders. Further, we view the risk of redemption as comparable to the risks inherent in the IPO market, where market conditions at the time of a planned IPO can significantly reduce the proceeds of the offering below the amount expected, or even cause the offering to be abandoned. As a result, on balance, we believe that going public through a business combination with our company is likely to be attractive to potential business combination partners.
Second, over the past decade, numerous high-quality, venture-backed businesses have achieved significant scale, market share, competitive dominance and cash flow—we call these companies “Mature Unicorns.” Many of these companies have chosen to remain private, as there has been, until recently, limited pressure from their investors for liquidity, and large amounts of growth capital available from investors, mutual funds and hedge
funds. TheWe believe that the recent dislocations in both the stock market and private growth equity markets, combined with a number of high-profile private investment failures and disappointing IPO outcomes, have substantiallylikely reduced the amount of private funding available for these companies, while demands for liquidity from their investors are likely to have increased.
Furthermore, the short-term impact ofCOVID-19 on many of these Mature Unicorns has, even with respect to many of the highest quality companies in this sector, reduced their revenues and cash flows, thereby increasing their need for additional capital. In light of our large amount of committed capital and our willingness to effectuate a merger in which our stockholders will own a minority,non-controlling interest in a company, we believe that we are well positionedwell-positioned to facilitate the recapitalization and public offering of a Mature Unicorn on terms that will generate attractive returns for our stockholders.
Third, the economic disruption ofCOVID-19 has substantially negatively impacted the revenues and cash flows of many large private equity portfolio companies.companies, and caused certain companies to become distressed. In light of their typically highly leveraged balance sheets, these companies will likely require substantial equity infusions to withstand the impact of the crisis. Given our large amount of committed capital and our willingness to effectuate a merger in which our initial stockholders will be minority stockholders in a merger, we believe that we are well positionedwell-positioned to acquire an interest in such a target company on highly favorable terms while facilitating the company’s public offering.
Fourth, the economic disruption ofCOVID-19 has also negatively impacted the revenues and cash flows of many large, high-quality, private family-owned companies, which will require them to raise equity capital. We believe that our ability to recapitalize and facilitate a public offering of a family-owned business without the typical uncertainty, upfront costs and the time-consuming nature of the IPO process, will enable us to merge with a large, family-owned business on highly favorable terms.
We intend to source initial business combination opportunities through Mr. Ackman’s and PSCM’s extensive relationships network of private business owners, public and private company executives and board members, venture capital fund managers, private equity and debt fund managers, investment bankers, ultra-high net worth families and their advisors, commercial bankers, attorneys, management consultants, accountants and other transaction intermediaries. We believe that this approach, augmented by the relationships and experience of our directors, will generate a substantial number of potential transaction alternatives that will create significant value for our stockholders.
Our independent director nominees have experience with public equity and debt markets, private equity, venture capital and growth company investments, as well as corporate strategy and operations, which will further assist us in identifying potential business combination candidates.
We believe our ability to complete our initial business combination will be enhanced by how we have structured this offering.
First, our distributableDistributable Tontine redeemable warrantsRedeemable Warrants provide our public stockholders with an incentiveincentives not to redeem their shares of Class A common stockCommon Stock in connection with our initial business combination. We will issue a fixed pool of 33,333,333 distributable44,444,444 Distributable Tontine redeemable warrants (assuming no exercise of the underwriters’ over-allotment option);Redeemable Warrants; holders who choose to redeem their shares will lose the right to receive any such warrants. Public stockholders who choose not to redeem their shares of Class A common stockCommon Stock will share in this fixed pool with othernon-redeeming holders (on a pro-rata basis), and will receive the additional warrants that were effectively surrendered by redeeming holders. As a result, public stockholders who do not redeem their shares will receive at leasttwo-ninths of a distributableDistributable Tontine redeemable warrantRedeemable Warrant per share they hold, and a proportionally greater amount as other holders elect to redeem. We believe this structure will likely lead to a lower level of redemptions, and therefore, we will likely have more funds available for our initial business combination.
Second, we have entered into a forward purchase agreementForward Purchase Agreement pursuant to which the forward purchasersForward Purchasers have agreed to purchase a minimum of $1,000,000,000 of forward purchase units,Forward Purchase Units, and up to $3,000,000,000 of such units,Forward Purchase Units, or such greater amount as may be mutually agreed upon. Each forward purchase unitForward Purchase Unit will be comprised of a share of our Class A common stockCommon Stock andone-third of one warrant, at a purchase price of $20.00 per unit, and will be sold in one or more private placements no later than simultaneously with the closing of our initial business combination. We believe that this large amount of committed capital and potential incremental capital represent a competitive advantage as we seek to attract potential business combination targets.
Third, our stockholders are subject to far less potential dilution than is the case with many other blank check companies. Unlike other blank check companies, our sponsorSponsor is not being afforded the opportunity to purchase 20% of our stock at a nominal price; our sponsorSponsor will instead purchase the sponsor warrantSponsor Warrants at itstheir fair market value, and the sponsor warrantSponsor Warrants will generally not be salable, transferable or exercisable until [●]three years after the date of our initial business combination. Thus, unlike other situations in which the sponsorSponsor is entitled to a portion of the value of the company regardless as to whether the company increases or decreases in value, our sponsorSponsor will only participate in the value of our company if our stock price is at least 20% higher than the initial offering price in this offering (and only then if the sponsor warrant isSponsor Warrants are salable, transferable or exercisable at that time). Furthermore, our sponsorSponsor is paying fair market value (as of the date of such purchase) for the opportunity to realize any such gain, and any such gains will accrue to the Pershing Square funds,Funds, rather than to the individual members of a sponsorSponsor entity. We believe that this incentive structure is better aligned with our shareholdersstockholders and potential merger partners, substantially less dilutive than typical incentive arrangements in other blank check companies, and therefore will be more attractive to potential investors in this offering.
We have not selected any specific business combination target and we have not, nor has anyone on our behalf, initiatedengaged in any substantive discussions, directly or indirectly, with any business combination target.
Our Management Team
Our management teamManagement Team will consist of William Ackman, our Chairman and Chief Executive Officer, and Ben Hakim, our Chief Financial Officer, who will both be supported by the PSCM investment team, the broader PSCM organization and our independent directors, as further described below.
Mr. Ackman, Mr. Hakim and each other member of the PSCM investment team (the “investment team”“Investment Team”) bring significant investment expertise as well as broad industry networks that encompass a wide array of sectors, industry participants, and intermediaries. We believe that each member of the investment teamInvestment Team has complementary skills and experience relevant to our business strategy, as well as a track record of working together and providing creative solutions for complex transactions, which we believe represent an important competitive advantage.
The investment teamInvestment Team has experience in:
sourcing, structuring, and executing on a wide range of investment opportunities;
providing constructive strategic and operational guidance to management teams and boards of directors, to drive long-term stockholder value creation;
leveraging insights from their substantial investment, financial, operational oversight and governance experience to help optimize the financial condition, operating performance and strategy of a company; and
leveraging their extensive network of relationships to augment or complement the senior management team or board of directors of a company.
William Ackman serves as our Chairman and Chief Executive Officer. Mr. Ackman founded Pershing Square in 2003, and is principally responsible for its investment policies and implementation. Mr. Ackman has spent 28 years in the investment management industry. Prior to forming Pershing Square, heco-founded Gotham Partners Management Co., LLC, an investment adviser that managed public and private equity portfolios. Mr. Ackman is currently Chairman of the Board of the Howard Hughes Corporation, and a member of the Investment Advisory Committee of the Federal Reserve Bank of NY. Mr. Ackman received his Bachelor of Arts degree from Harvard College, where he graduated magna cum laude, and received his Masters in Business Administration from Harvard Business School.
Ben Hakim serves as our Chief Financial Officer. Mr. Hakim is a Partner at Pershing Square and joined the investment teamInvestment Team in 2012. Mr. Hakim was previously a Senior Managing Director at The Blackstone Group, where he worked in the Mergers & Acquisitions group for 13 years. Mr. Hakim received his Bachelor of Science from Cornell University in 1997.
Our Investment Team
In addition to Mr. Ackman and Mr. Hakim, our investment teamInvestment Team includes the following individuals:
Ryan Israel is a Partner at Pershing Square and joined the investment teamInvestment Team in 2009. Mr. Israel was previously an analyst at Goldman Sachs in the Technology, Media and Telecom group. Mr. Israel served as a director of Element Solutions Inc. from October 2013 through January of 2019. Mr. Israel received his Bachelor of Science from the Wharton School at the University of Pennsylvania, where he graduated summa cum laude and beta gamma sigma in 2007.
Anthony Massaro is a Partner at Pershing Square and joined the investment teamInvestment Team in 2013. Mr. Massaro was previously a private equity associate at Apollo Global Management, where he focused on leveraged buyout and distressed debt investments across a wide range of industries. Prior to Apollo, he was an analyst at Goldman Sachs in the Natural Resources group. Mr. Massaro received his Bachelor of Science from the Wharton School at the University of Pennsylvania, where he graduated summa cum laude and beta gamma sigma in 2009.
Charles Korn is a Partner at Pershing Square and joined the investment teamInvestment Team in 2014. Mr. Korn was previously a private equity associate at KKR, where he focused on media, communications and industrials. Prior to KKR, he was an analyst at Goldman Sachs in the Technology, Media and Telecom group. Mr. Korn received a degree in Honors Business Administration from The Richard Ivey School of Business at The University of Western Ontario, where he graduated with highest distinction as an Ivey Scholar in 2010.
Bharath Alamanda joined the Pershing Square investment teamInvestment Team in 2017. Mr. Alamanda was previously a private equity associate at KKR, where he focused on financial services. Prior to KKR, he was an analyst at Goldman Sachs in the Technology, Media and Telecom Group. Mr. Alamanda received his Bachelor of Science in Engineering from Princeton University, where he graduated summa cum laude and phi beta kappa in 2013.
Feroz Qayyum joined the Pershing Square investment teamInvestment Team in 2017. Mr. Qayyum was previously a private equity associate at Hellman & Friedman, where he evaluated and oversaw investments across a wide range of industries. Prior to Hellman & Friedman, he was an analyst in the Mergers & Acquisitions group at Evercore. Mr. Qayyum received a degree in Honors Business Administration from The Richard Ivey School of Business at The University of Western Ontario, where he graduated with highest distinction as an Ivey Scholar in 2013.
Our Independent Director Nominees
Our investment team’sInvestment Team’s efforts to seek a suitable business combination target will be complemented and augmented by the expertise and network of relationships of our directors, who will provide extensive experience in business and financial matters.
Lisa Gersh co-founded Oxygen Media (“Oxygen”) in 1999 and remained its President and Chief Operating Officer until the company’s sale to NBC in 2007 for $925 million. Oxygen was the first everfirst-ever multi-platform brand and created content for women, by women, and reached 74 million homes at the time of its sale. Following the sale of Oxygen, Ms. Gersh joined NBC and spearheaded NBC’s acquisition of the Weather Channel, serving briefly as its interim Chief Executive Officer. Also at NBC, Ms. Gersh launched Education Nation, a transformative education initiative that established NBC as the media authority on education. In 2011, Ms. Gersh took over the operations of Martha Stewart Living Omnimedia, Inc. (“Martha Stewart”), first as President and later as its Chief Executive Officer. During her tenure, Ms. Gersh rebranded Martha Stewart, materially reduced its operating expenses, and returned the company to profitability. In 2014, Ms. Gersh transformed Gwyneth Paltrow’s blog, Goop, Inc. (“Goop”), into the first contextual commerce brand. In the process of taking Goop from a collection of recommendations to a freestanding brand, Ms. Gersh oversaw, among other things, the launch of Goop’s e-commerce store, skincare and fashion lines, and created Goop’s pop-up retail strategy. In 2017, Ms. Gersh was named Chief Executive Officer of Alexander Wang, a global fashion brand based in New York City. A graduate of Rutgers Law School, Ms. Gersh began her career as a lawyer, first as a litigation associate at Debevoise & Plimpton LLP, and then as a Partner at Friedman, Kaplan, Seiler & Adelman LLP, a boutique law firm specializing in complex litigation and commercial transactions, which Ms. Gersh co-founded, and which today has more than 50 lawyers. Currently, Ms. Gersh sits on the board of directors of Hasbro, Inc., where she chairs the Compensation Committee, and Establishment Labs Holdings Inc., where she chairs the Nomination and Governance Committee. She also serves on the board of directors of the Bail Project, Inc. and the Samsung Retail Advisory Board. Ms. Gersh previously served on the board of directors of comScore, Inc.
Michael Ovitzco-founded Creative Artists Agency (CAA) in 1974 and served as its Chairman until 1995. Over that20-year period, he grew the agency from astart-up organization to the world’s leading talent agency, representing more than 1,000 of the most notable actors, directors, musicians, screenwriters and other personalities in the entertainment industry, including Martin Scorsese, Sean Connery, Robert Redford, Paul Newman, Robert DeNiro, Al Pacino, Bill Murray, Dustin Hoffman, Steven Spielberg, David Letterman, Meryl Streep, Barbara Streisand, Michael Crichton and Michael Jackson. In his journey from the mailroom to media mogul, Mr. Ovitz launched the most powerful agency in the world (to date), sold three major Hollywood studios, executed all marketing and advertising for The Coca-Cola Company (including creating the Polar Bear Campaign) and was at the forefront of the digital revolution, making alliances with Intel Corporation and other early Silicon Valley companies. Mr. Ovitz also served as President of the Walt Disney Company, from October 1995 to January 1997. In 2010, Mr. Ovitz founded the venture capital fund Broad Beach Ventures LLC, a portfolio of over thirty companies. He has been a senior advisor to Palantir Technologies for over 10 years and has invested in and advised companies from startups to black swans. He was instrumental in the creation of venture capital firm Andreessen Horowitz and frequently consults for Founders Fund, 8VC and many other firms. In 2018, Mr. Ovitz wrote and published his memoirWho Is Michael Ovitz?, which was on the long list for The Financial Times and McKinsey Business Book of the Year Award. Mr. Ovitz is a graduate of University of California, Los Angeles and helped rebuild the UCLA Medical Center in 1997 while serving as its Chairman for over a decade. Mr. Ovitz is also a notable art collector and serves on The Board of Trustees at The Museum of Modern Art in New York City.
Jacqueline D. Reses serves as the Head of Square Capital, LLC, a wholly owned subsidiary of Square, Inc. (“Square”), which focuses on facilitating small business credit to businesses which have been locked-outlocked out of traditional sources of capital. Ms. Reses expects to serve as the Executive Chairman of Square Financial
Services, a conditionally approved FDIC-insured bank owned by Square. Prior to Square, Ms. Reses was the Chief Development Officer of Yahoo! Inc. and the head of the U.S. media group at Apax Partners Worldwide LLP, one of the largest global private equity firms. Ms. Reses also spent seven years at Goldman Sachs in mergers and acquisitions and the principal investment area. She previously served on the board of directors of Alibaba Group Holdings Limited, China’s largest mobile commerce company and Social Capital Hedosophia Holdings Corp. Ms. Reses sits on the boards of directors of Social Capital Hedosophia Holdings Corp. III and a number of privately held companies, as well as the Economic Advisory Council of the Federal Reserve Bank of San Francisco, the Board of Directors of the Wharton School of the University of Pennsylvania and National Public Radio (NPR). Ms. Reses is also currently serving on California Governor Newsom’s Task Force for Business and Jobs Recovery. Ms. Reses received a bachelor’s degree in economics with honors from the Wharton School of the University of Pennsylvania.
Joseph S. Steinberg is Chairman of the Board of Directors of Jefferies Financial Group Inc., and, from January 1979 until March 1, 2013, served as President of Leucadia National Corporation (now Jefferies Financial Group Inc.). He has also been a director of Jefferies Group since 2008, Crimson Wine Group since 2013 and served as a director of HomeFed Corporation from August 1998 and Chairman of the Board from December 1999 until its acquisition by Leucadia National CorporationJefferies Financial Group Inc. in 2019. Mr. Steinberg has previously served as a director of Spectrum Brands Holdings, Inc., Mueller Industries, Inc., Fidelity & Guaranty Life and Fortescue Metals Group Ltd. Mr. Steinberg has managerial and investing experience in a broad range of businesses through his more than 40 years as President and a director of Leucadia National Corporation and now as Chairman and a director of Jefferies Financial Group Inc.
Each of our directors, director nominees and officers has agreed not to become a director or officer of any other special purpose acquisition company (other than, in the case of Ms. Reses, with respect to the special purpose acquisition company at which she currently serves as a director) with a class of securities registered under the Exchange Act until we have entered into a definitive agreement regarding our initial business combination or we have failed to complete our initial business combination within 24 months from the closing of this offering (or 30 months from the closing of this offering if we have executed a letter of intent, agreement in principle or definitive agreement for our initial business combination within 24 months from the closing of this offering but have not completed our initial business combination within such 24 month period).
Notwithstanding our founders’ and management team’sManagement Team’s past experiences, past performance is not a guarantee (i) that we will be able to identify a suitable candidate for our initial business combination or (ii) that we will provide an attractive return to our stockholders from any business combination we may consummate. You should not rely on the historical record of our founders’ and management’s performance as indicative of our future performance. See “Risk Factors—Past performance of our founders and the other members of our management team,
Management Team, including investments and transactions in which they have participated and businesses with which they have been associated, may not be indicative of future performance of an investment in us, and we may be unable to provide positive returns to stockholders.” For more information, see the section of this prospectus entitled “Management—Conflicts of Interest.”
Our Forward Purchase Agreement, Sponsor WarrantWarrants and Director Warrants
We believe our ability to complete our initial business combination will be enhanced by our having entered into the forward purchase agreementForward Purchase Agreement and the sale of the sponsor warrant.Sponsor Warrants. These purchases are intended to provide us with appropriate funding for our initial business combination.
Under the forward purchase agreement,Forward Purchase Agreement, the forward purchasersForward Purchasers have agreed to purchase an aggregate of $1,000,000,000 of committed forward purchase units,Committed Forward Purchase Units, which will have a purchase price of $20.00 and consist of
one share of Class A common stockCommon Stock andone-third of one warrant. The purchase of the 50,000,000 committed forward purchase unitsCommitted Forward Purchase Units will take place in one or more private placements in such amounts and at such time or times as the forward purchasersForward Purchasers determine, with the full amount to have been purchased no later than simultaneously with the closing of our initial business combination. The forward purchasers’Forward Purchasers’ obligation to purchase the committed forward purchase unitsCommitted Forward Purchase Units may not be transferred to any other parties.
The forward purchase agreementForward Purchase Agreement also provides that the forward purchasersForward Purchasers may elect to purchase up to an aggregate of $2,000,000,000 additional forward purchase units,Additional Forward Purchase Units, which will also have a purchase price of $20.00 and consist of one share of Class A common stockCommon Stock andone-third of one warrant. Any purchases of the up to 100,000,000 additional forward purchase unitsAdditional Forward Purchase Units will also take place in one or more private placements in such amounts and at such time or times as the forward purchasersForward Purchasers determine, but no later than simultaneously with the closing of our initial business combination. The forward purchasers’Forward Purchasers’ right to purchase the additional forward purchase unitsAdditional Forward Purchase Units may be transferred, in whole or in part, to any entity that is managed by PSCM, but not to third parties. The forward purchasers’Forward Purchasers’ obligation or right, as applicable, to purchase the forward purchase unitsForward Purchase Units will be allocated among the forward purchasersForward Purchasers from time to time as described herein. In addition, certain of our directors have committed to purchase Forward Purchase Units in an aggregate amount of $6,000,000, with such purchases to occur no later than simultaneously with the closing of our initial business combination. The proceeds of all purchases made pursuant to the forward purchase agreementof Forward Purchase Units will be deposited into our operating account.
The terms of the forward purchase sharesForward Purchase Shares and forward purchase warrants,Forward Purchase Warrants, respectively, will generally be identical to the terms of the shares of Class A common stockCommon Stock and the redeemable warrantsRedeemable Warrants included in the units being issued in this offering, except that the forward purchase sharesForward Purchase Shares will have no right to receive the distributableDistributable Tontine redeemable warrants,Redeemable Warrants, no redemption rights and no right to liquidating distributions from our trust account, the Forward Purchase Warrants will have no right to vote on amendments to the warrant agreement prior to our initial business combination (with limited exceptions) and, as long as the forward purchase securitiesForward Purchase Securities are held by the Forward Purchasers, forward purchaserspurchase directors or their permitted transferees, they will be subject to certain transfer restrictions and have certain registration rights.
Concurrently with this offering, our sponsorSponsor will purchase the sponsor warrantSponsor Warrants for an aggregate purchase price of $[●].$65,000,000. The fair market value of the sponsor warrantSponsor Warrants as of the date of this offering was determined by the company to be $[●]$65,000,000 in consultation with a third-party, nationally recognized valuation firm. The valuation firm reviewed and discussed with us our methodology, procedures and assumptions for valuing the sponsor warrant.Sponsor Warrants. The value of the Sponsor Warrants was determined using the Black-Scholes option pricing model, subject to additional valuation adjustments reflecting certain volatility assumptions, the risk of a transaction not being consummated, the Sponsor Warrants’ three-year restriction on sale, transfer and exercise, and other factors as described in “Description of Securities—Valuation of Sponsor Warrants.” Taking into account such consultation, we concluded that our methodology, procedures and assumptions are reasonable.
The sponsor warrantSponsor Warrants will becomegenerally not be salable, transferable or exercisable [●]until three years after the date of our initial business combination, and will only then be exercisable in whole or in part, for that number of shares constituting 5.95% of the common shares of the post-combination entitybusiness on a fully diluted basis (as defined herein) as of the time immediately following the initial business combination, at an exercise price equal to $24.00 per common share of the post-combination entity.business. The sponsor warrantSponsor Warrants will have a term of ten10 years from the consummation of our initial business combination. The sponsor warrantSponsor Warrants will not be redeemable by us and will be exercisable, in whole or in part, on a cashless basis (in addition to being exercisable for cash). The sponsor warrant and the shares underlying the sponsor warrantSponsor Warrants will be subject to certain transfer restrictions and, along with the shares underlying the Sponsor Warrants, will have certain registration rights described herein.
Each of our directors, other than Mr. Ackman, will behas been given the opportunity to purchase, in a private placement concurrently with this offering, a director warrantDirector Warrant in an amount of up to $500,000.$812,500. Our directors have agreed to purchase, in the aggregate, $2,837,500 of Director Warrants. Each director warrantDirector Warrant will be exercisable for a percentage of the common shares of the post-combination entitybusiness (on a fully diluted basis) calculated as the purchase price of such director warrantDirector Warrant divided by the sponsor warrant purchase price of [●],the Sponsor Warrants, multiplied by 5.95%, reflecting fair market value as determined with respect to the sponsor warrant.Sponsor Warrants. The sponsor warrantexercise price per common share of the post-combination business will be $24.00. The Sponsor Warrants and the maximum $2,000,000 amount of director warrants,Director Warrants that our independent directors have agreed to purchase will be exercisable, in the aggregate, will be exercisable for that number of shares equal to [●]%approximately 6.21% of the common shares of the post-combination entitybusiness (on a fully diluted basis). The director warrants and the shares underlying the director warrantsDirector Warrants will be subject to certain transfer restrictions and, along with the shares underlying the Director Warrants, will have certain registration rights, andrights. The Director Warrants will otherwise have terms identical to those of the sponsor warrant. Sponsor Warrants.
Of the purchase priceproceeds from the sale of the sponsor warrantSponsor Warrants and any director warrants,Director Warrants, approximately $30,000,000$35,000,000 will be deposited in the trust account and the remainder will be held by us outside of the trust account and used to pay expenses in connection with this offering and a potential initial business combination.
Our Business Strategy
Our business strategy is to identify and complete a business combination that creates substantial long-term value for our stockholders. We will seek target companies that demonstrate the characteristics set out under “Our Acquisition Criteria” below. We believe our investment team’sInvestment Team’s operational, financial and transaction experience across economic cycles and broad networks of relationships, along with our deep understanding of the equity and debt capital markets, will allow us to effectively and efficiently identify and evaluate potential opportunities for our initial business combination.
We will consider companies in a wide range of industries, but generally will seek to acquire a simple, high-quality, high-return on capital business that generates predictable growing cash flows that can be estimated within a reasonable range over the long term. We will prefer targets that have low sensitivity to macroeconomic factors, with minimal commodity exposure and/or cyclical risk. We are willing to accept a high degree of situational, legal, and/or capital structure complexity in a business combination if we believe that the potential for reward justifies this additional complexity, particularly if these issues can be resolved in connection with and as a result of a combination with us.
To achieve a successful initial business combination, our investment teamInvestment Team will leverage its experience to identify a company with a strong competitive position that can benefit from being a public company in the execution of its growth and value-creation strategy. We believe our scale and structure, coupled with our investment team’sInvestment Team’s background and experience, will make us an attractive partner for high-quality management teams and owners.
Following the completion of this offering, we intend to begin the process of communicating with the network of relationships of our investment teamInvestment Team, our board of directors and their affiliates to articulate the parameters for our search for a potential target initial business combination and begin the process of pursuing and reviewing potential opportunities.
Our Acquisition Criteria
Consistent with our core investment principles and business strategy, we expect to identify high-quality companies that have a number of the characteristics enumerated below. We will use these criteria and guidelines in evaluating acquisition opportunities, but we may decide to complete our initial business combination with a target business that does not meet all of these criteria. We will seek to acquire companies that have the following characteristics:
Simple, predictable, and free-cash-flow-generative.We will generally seek companies with a proven track record of growth and profitabilityfree cash flow generation, and predictable future financial performance that we expect will generate strong, sustainable growth in cash flows over the long term;term—however, we are open to considering a company that may, at the time of the initial business combination, be cash-flow negative, if we believe that the business’s cash flow will become positive within a reasonable amount of time;
Formidable barriers to entry.We will seek companies that have long-term sustainable competitive advantages, significant barriers to entry, or “wide moats,” around their business, and low risks of disruption due to competition, innovation or new entrants;
Limited exposure to extrinsic factors that we cannot control. We will seek companies that are not materially affected by macroeconomic factors, commodity prices, regulatory risks, interest rate volatility and/or cyclical risk;
Strong balance sheet. We will seek companies that are conservatively financed relative to their free-cash-flow generation, after taking into consideration the de-leveraging effects of the initial business combination;
Minimal capital markets dependency. We will seek companies that can benefit from being a public company with broader access to the capital markets and greater governance, but will seek to avoidprefer companies that relyare not highly reliant on the capital markets to operate and grow their businesses;
Large capitalization. We will seek companies with large enterprise values and significant long-term growth potential that will be likely candidates for inclusion in the S&P 500 index;
Attractive valuation. We will seek companies at an attractive valuation relative to their long-term intrinsic value; and
Exceptional management and governance. We will seek companies that have trustworthy, talented, experienced, and highly competent management teams. These companies may be led by entrepreneurs who are looking for a partner with our expertise to execute on the next stage of their growth. For target companies that require new management, we will leverage PSCM’s experience in identifying and recruiting new management.
These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines, as well as other considerations, factors and criteria that our management and our investment teamInvestment Team may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not substantially meet the above criteria and guidelines, we will disclose that the target business does not substantially meet the above criteria in our stockholder communications related to our initial business combination, which, as discussed in this prospectus, would be in the form of tender offer documents or proxy solicitation materials that we would file with the SEC.
Our Acquisition Process
In evaluating a prospective target business, we expect to conduct a detailed due diligence review of the issues that we deem important in order to determine a company’s business quality and estimate its intrinsic value. That due diligence review will include, among other things, financial statement analysis, detailed document reviews, meetings with incumbent management and employees, consultations with relevant industry experts, competitors, customers and suppliers, as well as a review of additional financial, legal and other information that we will seek to obtain as part of our analysis of a target company.
We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers or directors. In the event we seek to complete our initial business combination with a company that is affiliated with our sponsor, officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm which is a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”), or an independent accounting firm that our initial business combination is fair to our company from a financial point of view.
Members of our management team will directly or indirectly own our securities following this offering and, accordingly, may have a conflict of interest in determining whether a particular target company is an appropriate business with which to effectuate our initial business combination. Each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.
We have not selected any specific business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target with respect to an initial business combination with us.
Each of our directors, director nominees and officers presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present aWe are not prohibited from pursuing an initial business combination opportunity. Accordingly, if any ofwith a company that is affiliated with our Sponsor, officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to such entity. We do not believe, however, thatdirectors. In the fiduciary duties or contractual obligations of our officers or directors will materially affect our abilityevent we seek to complete our initial business combination with a company that is affiliated with our Sponsor, officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm which is a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) or an independent accounting firm that our initial business combination is fair to our company from a financial point of view.
Each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors is included by a target business as a condition to any agreement with respect to our initial business combination.
Members of our Management Team are not obligated to devote any specific number of hours to our matters, but they intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination. In addition, we have an Investment Team comprised of seven members, who are employed by PSCM. We believe our Investment Team members will be able to allocate their duties to us and to PSCM amongst themselves in a manner that allows them to provide us with the resources and support we require while fulfilling their responsibilities to PSCM. The amount of time that any such person will devote in any time period will vary based on whether a target business has been selected for our initial business combination and the current stage of the business combination process.
Our amendedSponsor and restated certificateits affiliates manage or advise several funds. We do not believe that PSCM and its affiliates’ activities present significant conflicts of incorporationinterest with respect to our pursuit of an acquisition target, because we intend that our acquisition target will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity asbe a director or officer of ourprivately owned company, and such opportunity is one wethe Pershing Square Funds are legally and contractuallynot permitted by their constituent documents to undertake and would otherwise be reasonable for us to pursue, and tomake investments in the extent the director or officer is permitted to referequities of companies whose securities are not publicly traded (except that opportunity to us without violating another legal obligation.they may make investments in public companies that issue private securities).
PSCM and its affiliates (including our sponsorSponsor and the forward purchasers)Forward Purchasers) will not sponsor or form other public blank check companies similar to ours, or sponsor or form any private equity fund targeting private company acquisitions, during the period in which we are seeking our initial business combination. PSCM and its affiliates may form and manage other investment vehicles investing in public companies at any time prior to the announcement of our initial business combination, including, but not limited to, investment vehicles that may invest side-by-side with our company. We do not believe
Our amended and restated certificate of incorporation provides that PSCMwe renounce our interest in any corporate 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 our company and such opportunity is one we are
legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue. Neither the affiliates of our Sponsor nor members of our Management Team who are employed by our Sponsor or its affiliates’ activitiesaffiliates have any obligation to present us with any opportunity for a potential business combination of which they become aware. However, absent a significant conflictsconflict of interest with respect to our pursuit of an acquisition target, because we intend thatwould expect such opportunity to be provided to us, as such potential target company would be a private company.
Each of our acquisition targetdirectors, director nominees and officers currently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present business combination opportunities to such entity. Our officers, in their capacities as officers, partners or managing directors of our Sponsor or its affiliates, may be required to present potential business combinations to the related entities described above, current or future investment vehicles of our Sponsor before they present such opportunities to us. Accordingly, in the future, if any of our directors or officers becomes aware of a privately owned company,business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to such entity. Any presentation of such opportunities to entities other than us, or affiliates of our Sponsor, may present additional conflicts.
Although the current and future fiduciary duties or contractual obligations of our directors or officers could materially undermine our ability to complete our business combination, we believe this risk is partly mitigated for the forward purchasersfollowing reasons. As stated above, our Sponsor and its affiliates currently do not make, or are not permitted by their constituent documents to make, investments in private companies. Further, each of our directors, director nominees and officers has agreed not to become a director or officer of any other special purpose acquisition company (other than, in the equitiescase of companies whoseMs. Reses, with respect to the special purpose acquisition company at which she currently serves as a director) with a class of securities areregistered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), until we have entered into a definitive agreement regarding our initial business combination or we have failed to complete our initial business combination within 24 months (or 30 months, as applicable) of the closing of this offering. With respect to a potential business combination as to which a director may be “interested” or have a potential conflict of interest, we may take steps including, but not publicly traded (exceptlimited to, requiring the review of our audit committee pursuant to our related party policy, the recusal of such director with respect to such transaction, the appointment of a committee of independent and disinterested directors, or, as described above, the use of an independent accounting firm to ensure that they may make investments in public companies that issue private securities).a potential business combination is fair to our stockholders.
Initial Business Combination
So long as we obtain and maintain a listing for our securities on the NYSE, our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in the trust account (excluding the amount of any deferred underwriting discount held in trust) at the time of our signing a definitive agreement in connection with our initial business combination. If our securities are no longer listed on the NYSE, we will not be obligated to satisfy such 80% test. If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm which is a member of FINRA or a valuation or appraisal firm with respect to the satisfaction of such criteria. While we consider it unlikely that our board will not be able to make an independent determination of the fair market value of a target business or businesses, it may be unable to do so if the board is less familiar or experienced with the target company’s business, there is a significant amount of uncertainty as to the value of the company’s assets or prospects, including if such company is at an early stage of development, operations or growth, or if the anticipated transaction involves a complex financial analysis or other specialized skills and the board determines that outside expertise would be helpful or necessary in conducting such analysis. Since any opinion, if obtained, would merely state that the fair market
value of the target business meets the 80% of assets threshold, unless such opinion includes material information regarding the valuation of a target business or the consideration to be provided, it is not anticipated that copies of such opinion would be distributed to our stockholders. However, if required under applicable law, any proxy statement that we deliver to stockholders and file with the SEC in connection with a proposed transaction will include such opinion.
We anticipate structuring our initial business combination so that our stockholders (including our Sponsor, the post-transaction company in whichForward Purchasers, and our public stockholdersstockholders) will own sharesa minority stake in the post-combination business, which post-combination business we anticipate will own or acquire 100% of the equity interests or assets of the target business
or businesses. We may, however, structure our initial business combination such that the post-transaction companypost-combination business owns or acquires less than 100% of such interests or assets of the target business for the post-acquisition companypost-combination business to meet certain objectives of the target management team or stockholders or for other reasons, but we will only complete such business combination if the post-transaction companypost-combination business owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires an interest in the target or assets sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended, or the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to the business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company,post-combination business, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test. If the 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 initial business combination for the purposes of a tender offer or for seeking stockholder approval, as applicable.
The size of the minority interest we expect our pre-combination stockholders to hold in the post-combination business could be impacted by a number of factors, including the structure of our initial business combination and the form of consideration we pay to acquire the target business, the size of the target company and the relative valuations ascribed to the target and us in the business combination and the potential dilutive effect of our warrants, including our Sponsor Warrants and Director Warrants.
If we consummate our initial business combination with a target business that has a value that is greater than ours, the ownership of our stockholders in the pro forma post-combination business will be proportionately diluted. Further, the dilutive nature of our Redeemable Warrants, the Forward Purchase Warrants, the Sponsor Warrants and the Director Warrants could make it more difficult to effectuate our initial business combination, increase the cost of acquiring the target business, or otherwise result in terms for our initial business combination that are less advantageous to our public stockholders.
The unique structure of our Sponsor Warrants and Director Warrants, which provide our Sponsor and directors with a fixed percentage of the pro forma post-combination business, will have different effects on the ownership interest of our public stockholders in the post-combination business as compared to the typical structure of blank check companies, in which the Sponsor maintains a fixed 20% interest. The Sponsor Warrants will be exercisable for 5.95% of the common shares of the post-combination business, and the $2,837,500 of Director Warrants that our directors have agreed to purchase will be exercisable for approximately 0.26% of the common shares of the post-combination business. However, because of the $24.00 exercise price of the Sponsor Warrants and Director Warrants, such warrants will have no dilutive effect if the per-share value of the post-combination business is lower than $24.00, and will only be dilutive if and to the extent that the per-share value rises above $24.00, up to a limit of approximately 6.21% of the common shares of the post-combination business. For further description of how the Sponsor Warrants and Director Warrants affect the relative interests of our stockholders, see “Proposed Business—Effect of Sponsor Warrants and Director Warrants on Ownership.”
Corporate Information
Our offices are located at 787 Eleventh Avenue, 9th Floor, New York, NY 10019, and our telephone number is (212)813-3700. Upon the closing of this offering, our website address will be [●].http://www.PSTontine.com. Our website and the information contained on, or that can be accessed through, the website is not deemed to be incorporated by reference in, and is not considered to be part of, this prospectus or the registration statement of which this prospectus is a part. You should not rely on any such information in making your decision whether to invest in our securities.
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding anon-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A common stockCommon Stock that is held bynon-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion innon-convertible debt securities during the prior three-year period. References herein to “emerging growth company” shall have the meaning associated with it in the JOBS Act.
The Offering
In making your decision on whether to invest in our securities, you should take into account not only the backgrounds of the members of our management team,Management Team, but also the special risks we face as a blank check company and the fact that this offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. You will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. You should carefully consider these and the other risks set forth in the section of this prospectus entitled “Risk Factors.”
Securities offered |
one share of Class A common stock;Common Stock;
one-ninth of one detachable redeemable warrant;Distributable Redeemable Warrant; and
a contingent right to receive distributableDistributable Tontine redeemable warrants.Redeemable Warrants.
Distribution of additional “Tontine” | Our amended and restated certificate of incorporation |
The distribution of the |
The |
Tontine | The distribution of the |
|
Proposed NYSE symbols | Units: “PSTH.U” |
Class A Common Stock: “PSTH” |
Redeemable Warrants (whether the |
Trading commencement and separation of Class A | The units will begin trading on or promptly after the date of this prospectus. We expect the Class A |
Separate trading of the Class A | In no event will the Class A |
Trading commencement of distributable Tontine | We expect that the |
Units:
Number outstanding before this offering | 0 |
Number outstanding after this offering |
Common Stock:
Number outstanding before this offering | 100 shares of Class B |
|
1 |
|
Does not give effect to the issuance of any |
The shares of common stock included in the units are Class A |
Number outstanding after this offering | 200,000,000 shares of Class A Common Stock and 100 shares of Class B Common Stock(1)(2) |
Redeemable Warrants:
Redeemable Warrants | Consists of |
Except with regard to the manner of their issuance, the |
The |
Number of | 0 |
Number of |
Number of |
|
Exercisability of | Each whole redeemable warrant is exercisable to purchase one share of our Class A |
The |
Exercise price of | $23.00 per share, subject to adjustment as described herein. |
In addition to the other adjustments described herein, if (x) we issue additional shares of Class A |
The |
Exercise period of | The |
30 days after the completion of our initial business combination; and
12 months from the closing of this offering;
provided in each case that we have an effective registration statement under the Securities Act covering the shares of Class A |
to exercise their |
We are not registering the shares of Class A |
The |
The |
Redemption of | Once the |
in whole and not in part;
upon a minimum of 30 days’ prior written notice of redemption, which we refer to as the30-day redemption period, provided that holders will be able to exercise their warrants prior to redemption and, at our election, any such exercise may be required to be on a cashless basis as described below; and
if, and only if, the closingdaily volume-weighted average price per share of our Class A common stockCommon Stock equals or exceeds $36.00 per share (subject to adjustment as described under the heading “Description of Securities—Redeemable Warrants—Anti-Dilution Adjustments”) for any 20 trading days within a30-trading-day period ending on the third businesstrading day prior to the date on which we send the notice of redemption to the warrant holders.
We will not redeem the |
No fractional shares of our Class A Common Stock will be issued upon redemption. If, upon redemption, a holder would be entitled to receive a fractional interest in a share, we will round down to the nearest whole number of shares to be issued to the holder. Please see the section of this prospectus entitled “Description of Securities—Redeemable Warrants” for additional information. |
The |
Redemption of | Once the |
in whole and not in part;
upon a minimum of 30 days’ prior written notice of redemption, which we refer to as the30-day redemption period, at a price of $0.10 per warrant, provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the table set forth under “Description of Securities—Redeemable Warrants” based on the redemption date and the “fair market value” (as defined above) except as otherwise described below; and
if, and only if, the closingdaily volume-weighted average price per share of our Class A common stockCommon Stock equals or exceeds $20.00 per public share (subject to adjustment as described under the heading “Description of Securities—Redeemable Warrants—Anti-Dilution Adjustments”) for any 20 trading days within the 30-trading-day period ending threeon the third trading days before we sendday prior to the date on which a notice of redemption is sent to the warrant holders.registered holders of the warrants.
This redemption feature provides us with the ability to manage our capital structure with more flexibility, and allows holders the option to either (i) exercise the |
No fractional shares of our Class A |
the section of this prospectus entitled “Description of Securities—Redeemable Warrants” for additional information. |
The |
Forward | We have entered into a |
determine, with the full amount to have been purchased no later than simultaneously with the closing of our initial business combination. The forward purchasers’ obligation to purchase the committed forward purchase units may not be transferred to any other parties.
The |
The proceeds of any |
to restrictions on the transfer of the Forward Purchase Securities. The Forward Purchase Securities will be subject to certain transfer restrictions and have certain registration rights, as long as such |
Except as described above, the terms of the |
Director Forward Purchase Agreement | Prior to or concurrently with this offering, we will enter into a Director Forward Purchase Agreement with certain of our independent directors, who we refer to as the Director Forward Purchasers. The Director Forward Purchasers have agreed to purchase, in one or more private placements in such amounts and at such time or times as each Director Forward Purchaser determines, but no later than simultaneously with the closing of our initial business combination, an aggregate of $6,000,000 of Forward Purchase Units. The Director Forward Purchasers may not transfer their obligation to purchase such Forward Purchase Units, other than to our Sponsor, |
Sponsor Warrants | Concurrently with this offering, our |
nationally recognized valuation firm. The |
of, shares of common stock (including any equity or equity-based award), in each case without regard to whether such warrant, option or |
The |
Of the |
The |
Determination of purchase price of | Concurrently with this offering, our |
The value of the Sponsor Warrants was determined using the Black-Scholes option pricing model, subject to additional valuation adjustments reflecting certain volatility assumptions, the risk of a transaction not being consummated, the Sponsor Warrants’ three-year restriction on sale, transfer and exercise, and other factors as described in “Description of Securities—Valuation of Sponsor Warrants.” |
Transfer restrictions on | The |
under the section of this prospectus entitled “Principal Stockholders—Restrictions on Transfers of Sponsor |
Cashless exercise of the | If the holder of the |
Director | Each of our directors, other than Mr. Ackman, |
The |
Class B | On May 7, 2020, our |
Class B |
Class B |
The shares of Class B |
each share of Class B common stockCommon Stock will carry a number of votes such that, in the aggregate, the 100 shares of Class B common stockCommon Stock will have the voting power of 20.0% of our issued and outstanding common stock immediately following this offering, while the shares of Class A common stockCommon Stock will have, in the aggregate, 80.0% of the voting power of our issued and outstanding common stock immediately following this offering;
the 100 shares of Class B common stockCommon Stock automatically convert into 100 shares of Class A common stockCommon Stock at the time of our initial business combination, and may not be converted earlier;
the shares of Class B common stockCommon Stock will not be transferable, and the shares of Class A common stockCommon Stock issued upon the automatic conversion of our Class B common stockCommon Stock in connection with our initial business combination will not be transferable until 180 days after our initial business combination, subject to limited exceptions; and
the holders of the Class B common stockCommon Stock have the right to elect all of our directors prior to our initial business combination.
Letter agreement with | Our |
30 months from the closing of this offering if we have executed a letter of intent, agreement in principle or |
from the trust account with respect to any shares of Class A |
The Forward Purchasers are also party to the Letter Agreement, solely for the purposes of setting forth certain transfer restrictions with respect to the Forward Purchase Securities. |
Registration Rights Agreement | Concurrently with this offering, we will enter into a Registration Rights Agreement with our Sponsor, the Forward Purchasers and our independent directors, pursuant to which we will be required to use commercially reasonable efforts to file a registration statement within 120 days of our initial business combination, and use our best efforts to cause such registration statement to be declared effective as soon as practicable (but in no event later than 60 days) thereafter, providing for the resale, under Rule 415 of the Securities Act, of (i) the Sponsor Warrants, (ii) the Director Warrants, (iii) the shares issuable upon the exercise of the Sponsor Warrants or Director Warrants, (iv) the Forward Purchase Securities, (v) the shares of Class A Common Stock issuable upon conversion of our Class B Common Stock and (vi) any other shares or warrants of the company that the parties to the |
Registration Rights Agreement have purchased on the open market, subject to certain conditions as provided in the Registration Rights Agreement. The parties to the Registration Rights Agreement, and their permitted transferees, will be entitled to make up to 10 demands that we register the foregoing securities, and will have certain “piggyback rights” with respect to other registration statements filed by the company. The post-combination business will bear the cost of registering these securities. |
In addition, the Redeemable Warrants will have certain registration rights as described herein.
Voting | Holders of the Class A |
Proceeds to be held in trust account | The rules of the NYSE provide that at least 90% of the gross proceeds from this offering and the sale of the |
Except with respect to any interest earned on the funds held in the trust account that may be released to us to pay our tax obligations, the proceeds from this offering and certain proceeds from the sale of the |
offering if we do not complete our initial business combination within 24 months |
Anticipated expenses and funding sources | Except as described above with respect to the payment of taxes, unless and until we complete our initial business combination, no proceeds held in the trust account will be available for our use. The proceeds held in the trust account will be invested only in U.S. Treasury obligations with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule2a-7 under the Investment Company Act which invest only in U.S. Treasury obligations. We will disclose in each quarterly and annual report filed with the SEC prior to our initial business combination whether the proceeds deposited in the trust account are invested in U.S. Treasury obligations or money market funds or a combination thereof. Based upon current interest rates, we expect the trust account to generate approximately |
the net proceeds of this offering and the sale of the sponsor warrantSponsor Warrants and Director Warrants not held in the trust account, which will be approximately $[●]$26,337,800 in working capital after the payment of approximately $[●]$6,499,700 in expenses relating to this offering (assumingand $35,000,000 in underwriting commissions (including up to $5,000,000 for any retail selling concessions, any amount of which we do not sell any director warrants)pay will be held outside the trust account); and
any loans or additional investments from our sponsor,Sponsor, members of our management teamManagement Team or their affiliates or third parties, although they are under no obligation to advance funds or invest in us, and provided that any such loans will not have any claim on the proceeds held in the trust account unless such proceeds are released to us upon completion of our initial business combination.
Conditions to completing our initial business combination | There is no limitation on our ability to raise funds privately or through loans in connection with our initial business combination. Our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of our assets held in the trust account (excluding the |
amount of any deferred underwriting discount held in trust) at the time of the agreement to enter into our initial business combination. |
If our board is not able to independently determine the fair market value of the target business or businesses or we are considering our initial business combination with an affiliated entity, we will obtain an opinion from an independent investment banking firm that is a member of FINRA or an independent accounting firm. We anticipate structuring our initial business combination so that our stockholders (including our Sponsor, the |
Permitted purchases of Class A | If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our |
Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules. |
Redemption rights for holders of Class A common stock issued in this offering upon completion of | We will provide our public stockholders with the opportunity to have all or a portion of their shares of the Class A |
Manner of conducting redemptions | We will provide our public stockholders with the opportunity to have all or a portion of their shares of the Class A |
we choose to seek stockholder approval for business or other legal reasons. So long as we obtain and maintain a listing for our securities on the NYSE, we will be required to comply with such rules. |
If a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation: |
conduct the redemptions pursuant to Rule13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and
file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about our initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.
Upon the public announcement of our business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we or our |
In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number of their shares of Class A |
Common Stock, which number will be based on the requirement that we may not redeem such shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon consummation of our initial business combination (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete our initial business combination. |
If, however, stockholder approval of the transaction is required by law or stock exchange listing requirements, or we decide to obtain stockholder approval for business or other legal reasons, we will: |
conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and
file proxy materials with the SEC.
If we seek stockholder approval, we will complete our initial business combination only if a majority of the |
consummate our initial business combination. Each public stockholder may elect to redeem its shares of Class A |
We may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed to such holders, or up to two business days prior to the vote on the proposal to approve the business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically. We believe that this will allow our transfer agent to efficiently process any redemptions without the need for further communication or action from the redeeming public stockholders, which could delay redemptions and result in additional administrative cost. If the proposed business combination is not approved and we continue to search for a target company, we will promptly return any certificates delivered, or shares tendered electronically, by public stockholders who elected to redeem their shares. |
Our amended and restated certificate of incorporation |
Limitation on redemption rights of stockholders holding 15% or more of the shares issued in this offering if we hold stockholder vote | Notwithstanding the foregoing redemption rights, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our amended and restated certificate |
of incorporation |
ability of a small group of stockholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our public stockholders’ ability to vote all of their shares (including all shares held by those stockholders that hold more than 15% of the shares issued in this offering) for or against our initial business combination. |
Redemption rights for holders of shares of Class A | Our amended and restated certificate of incorporation |
amended and restated certificate of incorporation, we may not issue additional securities that can vote on amendments to our amended and restated certificate of incorporation or on our initial business combination (other than the |
any amendment to our amended and restated certificate of incorporation (i) to |
Release of funds in trust account on closing of our initial business combination
Repayment of up to $1,500,000 (plus accrued interest) in loans made to us by our
Reimbursement for anyout-of-pocket expenses related to identifying, investigating and completing our initial business combination; and
Repayment of any other loans which may be made by our
Risks We are a newly formed company that has conducted no operations and has generated no revenues. Until we complete our initial business combination, we will have no operations and will generate no operating revenues. In making your decision whether to invest in our securities, you should take into account not only the background of our Summary Financial Data The following table summarizes the relevant financial data for our business and should be read with our financial statements, which are included in this prospectus. We have not had any significant operations to date, so only balance sheet data is presented.
If no business combination is completed within 24 months (or 30 months, as applicable) from the closing of this offering, the proceeds then on deposit in the trust account including any interest earned on the funds held in the trust account and not previously released to us to pay our taxes (less $100,000 of interest to pay dissolution expenses), will be used to fund the redemption of our shares of Class A An investment in our securities involves a high degree of risk. You should consider carefully all of the risks described below, together with the other information contained in this prospectus, before making a decision to invest in our units. If any of the following events occur, our business, financial condition and operating results may be materially adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your investment. We are a newly formed company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective. We are a newly formed company with no operating results, and we will not commence operations until obtaining funding through this offering. Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective of completing our initial business combination with one or more target businesses. We have no plans, arrangements or understandings with any prospective target business concerning our initial business combination and may be unable to complete our business combination. If we fail to complete our initial business combination, we will never generate any operating revenues. Past performance by Pershing Square, Justice Holdings, Ltd. or our Information regarding performance by, or businesses associated with, Pershing Square, Justice Holdings, Ltd. or our Our public stockholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may complete our initial business combination even though a majority of our public stockholders do not support such a combination. We may choose not to hold a stockholder vote to approve our initial business combination unless our initial business combination would require stockholder approval under applicable law or stock exchange listing requirements or if we decide to hold a stockholder vote for business or other legal reasons. For instance, the NYSE rules currently allow us to engage in a tender offer in lieu of a stockholder meeting but would still require us to obtain stockholder approval if we were seeking to issue more than 20% of our outstanding shares of common stock to a target business as consideration in any business combination. Therefore, if we were structuring a business combination that required us to issue more than 20% of our outstanding shares of common stock, we would seek stockholder approval of such business combination. Except as required by law, the decision as to whether we will seek stockholder approval of a proposed initial business combination or will allow stockholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek stockholder approval. Accordingly, we may complete our initial business combination even if holders of a majority of the shares of Class A If we seek stockholder approval of our initial business combination, our Pursuant to the In evaluating a prospective target business for our initial business combination, our management will rely on the availability of the funds from the sale of the We have entered into a The funds from the sale of the for such shortfall on terms favorable to us or at all. Any such shortfall would also reduce the amount of funds that we have available for the completion of our initial business combination or working capital of the Your only opportunity to affect the investment decision regarding a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash, unless we seek stockholder approval of our initial business combination. At the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of our initial business combination. Since our board of directors may complete our initial business combination without seeking stockholder approval, public stockholders may not have the right or opportunity to vote on our initial business combination, unless we seek such stockholder vote. Accordingly, if we do not seek stockholder approval, your only opportunity to affect the investment decision regarding a potential business combination may be limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public stockholders in which we describe our initial business combination. If you elect to exercise your redemption rights with respect to your shares of Class A In connection with our initial business combination, and in connection with certain amendments to our amended and restated certificate of incorporation, public stockholders will have the opportunity to exercise their right to redeem their shares of Class A Our initial business combination will require approval of
The ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target. We may seek to enter into our initial business combination agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. If too many public stockholders exercise their redemption rights, and we do not obtain sufficient funds from the sale of our net tangible assets to be less than $5,000,001 upon consummation of our initial business combination and after payment of underwriters’ fees and commissions or such greater amount necessary to satisfy a closing condition as described above, we would not proceed with such redemption and the related business combination and may instead search for an alternate initial business combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into an initial business combination with us. The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure. At the time we enter into an agreement for our initial business combination, we will not know how many stockholders may exercise their redemption rights, and therefore will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account to meet such requirements, or arrange for third-party financing. In addition, if a larger number of shares are submitted for redemption than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for third-party financing. Raising additional third-party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. The above considerations may limit our ability to complete the most desirable business combination available to us or optimize our capital structure. Theper-share amount we will distribute to stockholders who properly exercise their redemption rights will not be reduced by the deferred underwriting commission and, after such redemptions, theper-share value of shares held bynon-redeeming stockholders will reflect our obligation to pay the deferred underwriting commissions (which amount may be reduced based upon the number of shares redeemed). The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your stock. If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful is increased. If our initial business combination is unsuccessful, you would not receive your pro-rata portion of the trust account until we liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your stock in the open market; however, at such time our stock may trade at a discount to the pro-rata amount per share in the trust account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your stock in the open market. The The full, we may not have the capital to satisfy certain conditions to our initial business combination. If the The If the The requirement that we complete our initial business combination within the prescribed Any potential target business with which we enter into negotiations concerning our initial business combination will be aware that we must complete our initial business combination within 24 months (or 30 months, as applicable) from the closing of this offering. Consequently, such target business may obtain leverage over us in negotiating an initial business combination, knowing that if we do not complete our initial business combination with that particular target business, we may be unable to complete our initial business combination with any target business. This risk will increase as we get closer to the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation. We may not be able to complete our initial business combination within the prescribed Our amended and restated certificate of incorporation If we have not completed our initial business combination within such time period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In such case, our public stockholders may only receive $20.00 per share, our If we seek stockholder approval of our initial business combination, our If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our Such a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of our shares, is no longer the beneficial owner thereof, and therefore agrees not to exercise its redemption rights. In the event that our In addition, if such purchases are made (other than with respect to the Forward Purchase Units), the public “float” of our Class A If a stockholder fails to receive notice of our offer to redeem the shares of our Class A We will comply with the tender offer rules or proxy rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance with these rules, if a stockholder fails to receive our tender offer or proxy materials, as applicable, such stockholder may not become aware of the opportunity to have its shares redeemed. In addition, the proxy materials or tender offer documents, as applicable, that we will furnish to our public stockholders in connection with our initial business combination will describe the various procedures that must be complied with in order to validly tender or redeem such shares. For example, we may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents mailed to such holders, or up to two business days prior to the vote on the proposal to approve our initial business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically. In the event that a stockholder fails to comply with these or any other procedures, its shares may not be redeemed. See the section of this prospectus entitled “Proposed Business—Redemption Rights for Public Stockholders upon Completion of our Initial Business Combination—Tendering Stock Certificates in Connection with a Tender Offer or Redemption Rights.” You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your shares of Class A Our public stockholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (i) the completion of our initial business combination, and then only in connection with those shares of Class A business combination within 24 months The NYSE may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions. We have applied to have our units listed on the NYSE. We expect that our units will be listed on the NYSE on the date of this prospectus. Following the date the shares of our Class A will be approved for listing on the NYSE. Although after giving effect to this offering we expect to meet, on a pro forma basis, the minimum initial listing standards set forth in the NYSE listing standards, we cannot assure you that our securities will be, or will continue to be, listed on the NYSE in the future or prior to our initial business combination. In order to continue listing our securities on the NYSE prior to our initial business combination, we must maintain certain financial, distribution and stock price levels. Generally, we must maintain a minimum amount in stockholders’ equity (generally $2,500,000) and a minimum number of holders of our securities (generally 300 public holders). Additionally, in connection with our initial business combination, we will be required to demonstrate compliance with the NYSE’s initial listing requirements, which are more rigorous than the NYSE’s continued listing requirements, in order to continue to maintain the listing of our securities on the NYSE. For instance, our stock price would generally be required to be at least $4.00 per share, our stockholders’ equity would generally be required to be at least $5,000,000 and we would be required to have a minimum of 300 round lot holders of our securities (or 400 round lot holders following our initial business combination). In addition, the offering price for the units included in this offering is higher than typical offerings of this type, and may result in participants in the offering purchasing a lower number of units, potentially reducing the number of round lot holders of our securities. We cannot assure you that we will be able to meet those initial listing requirements at that time. If the NYSE delists any of our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect such securities could be quoted on anover-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
a limited availability of market quotations for our securities;
reduced liquidity for our securities;
a determination that our Class A a limited amount of news and analyst coverage; and
a decreased ability to issue additional securities or obtain additional financing in the future. The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because we expect that our units and eventually our Class A You will not be entitled to protections normally afforded to investors of many other blank check companies. Since the net proceeds of this offering and the sale of the sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things, this means our units will be immediately tradable and we will have a longer period of time to complete our initial business combination than do companies subject to Rule 419. Moreover, if this offering were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection with the completion of our initial business combination. For a more detailed comparison of our offering to offerings that comply with Rule 419, please see the section of this prospectus entitled “Proposed Business—Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419.” If we seek stockholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of stockholders are deemed to hold in excess of 15% of our Class A If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. 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 stock in open market transactions, potentially at a loss. Because of the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $20.00 per share on our redemption of the shares of our Class A We expect to encounter intense competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, 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. Furthermore, because we are obligated to pay cash for the shares of Class A our public stockholders may receive less than $20.00 per share, upon our liquidation. See If the net proceeds of this offering and the sale of the The funds available to us outside of the trust account may not be sufficient to allow us to operate for at least the next 24 months (or 30 months, as applicable), assuming that our initial business combination is not completed during that time. We believe that, upon the closing of this offering, the funds available to us outside of the trust account will be sufficient to allow us to operate for at least the next 24 months (or 30 months, as applicable); however, we cannot assure you that our estimate is accurate. Of the funds available to us, we could use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the funds as a down payment or to fund a“no-shop” provision (a provision in letters of intent or merger agreements designed to keep target businesses from “shopping” around for transactions with other companies on terms more favorable to such target businesses) with respect to a particular proposed initial business combination, although we do not have any current intention to do so. If we entered into a letter of intent or merger agreement where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $20.00 per share, or less in certain circumstances, on the liquidation of our trust account, If the net proceeds of this offering and the sale of the Of the net proceeds of this offering and the sale of the loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account. The Forward Purchasers and Director Forward Purchasers may elect to purchase any or all of the number of Forward Purchase Units they have agreed to purchase at any time prior the initial business combination, which could provide a source of working capital. However, the Forward Purchasers and Director Forward Purchasers have no obligation to make such purchases until time of our initial business combination. If we are unable to obtain these loans, we may be unable to complete our initial business combination. If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. Consequently, our public stockholders may only receive approximately $20.00 per share on our redemption of their shares of Class A Subsequent to the completion of our initial business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and our stock price, which could cause you to lose some or all of your investment. Even if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will surface all material issues that may be present inside a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be forced to later If third parties bring claims against us, the proceeds held in the trust account could be reduced, and theper-share redemption amount received by stockholders may be less than $20.00 per share. Our placing of funds in the trust account may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers (other than our independent auditors), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative. Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of the shares of our Class A $20.00 per share) due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective business target who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. However, we have not asked our The securities in which we invest the proceeds held in the trust account could bear a negative rate of interest, which could reduce the interest income available for payment of taxes or reduce the value of the assets held in trust such that the per-share redemption amount received by stockholders may be less than $20.00 per share. The net proceeds of this offering and certain proceeds from the sale of the Sponsor Warrants and any sale of directors warrants, in the amount of $4,000,000,000, will be held in the trust account. The proceeds held in the trust account may only be invested in direct U.S. Treasury obligations having a maturity of 180 days or less, or in certain money market funds which invest only in direct U.S. Treasury obligations. While short-term U.S. Treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent years. Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States. In the event of very low or negative yields, the amount of interest income (which we are permitted to use for payment of our tax obligations and up to $100,000 of dissolution expenses) would be reduced. In the event that we are unable to complete our initial business combination, our public stockholders are entitled to receive their pro-rata share of the proceeds held in the trust account, plus any interest income. If the balance of the trust account is reduced below $4,000,000,000 as a result of negative interest rates, the amount of funds in the trust account available for distribution to our public stockholders may be reduced below $20.00 per share. Our directors may decide not to enforce the indemnification obligations of our In the event that the proceeds in the trust account are reduced below the lesser of (i) $20.00 per share of Class A While we currently expect that our independent directors would take legal action on our behalf against our We may not have sufficient funds to satisfy indemnification claims of our directors and officers. We have agreed to indemnify our directors and officers to the fullest extent permitted by law and we will purchase directors’ and officers’ liability insurance that insures our directors and officers against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our directors and officers. However, any such insurance may not be available or sufficient. Further, our directors and officers have agreed to waive any right, title, interest or claim of any kind in or to any monies in the trust account and to not seek recourse against the trust account for any reason whatsoever. Accordingly, any indemnification provided by us will be able to be satisfied by us only if (i) we have sufficient funds outside of the trust account, or (ii) we consummate our initial business combination. Our obligations to indemnify our directors and officers may discourage stockholders from bringing a lawsuit against our directors and officers for breach of their fiduciary duties. These provisions may also have the effect of reducing the likelihood of derivative litigation against our directors and officers even though, such an action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent that we may incur the costs of settlement and damage awards against our directors and officers pursuant to these indemnification provisions. If, after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and we and our board may be exposed to claims of punitive damages. If, after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by our stockholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. If, before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and theper-share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced. If, before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, theper-share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced. If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination. If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:
restrictions on the nature of our investments; and
restrictions on the issuance of securities, each of which may make it difficult for us to complete our business combination. In addition, we may have imposed upon us burdensome requirements, including:
registration as an investment company; adoption of a specific form of corporate structure; and
reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations. In order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other than investing, reinvesting or trading in securities and that our activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business will be to identify and complete our initial business combination and thereafter to operate the We do not believe that our anticipated principal activities will subject us to the Investment Company Act. To this end, the proceeds held in the trust account may only be invested in direct U.S. Treasury obligations (which are United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act) having a maturity of 180 days or less or in money market funds meeting certain conditions under Rule2a-7 promulgated under the Investment Company Act which invest only in direct U.S. Treasury obligations. Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting the investment of the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to avoid being deemed an “investment company” within the meaning of the Investment Company Act. This offering is not intended for persons who are seeking a return on investments in government securities or investment securities. The trust account is intended as a holding place for funds pending the earliest to occur of: (i) the completion of our initial business combination; (ii) the redemption of any of the shares of our Class A Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the recent coronavirus(COVID-19) outbreak and the status of debt and equity markets. In December 2019, a novel strain of coronavirus was reported to have surfaced, Concern.” On January 31, 2020, U.S. Health and Human Services Secretary Alex M. Azar II declared a public health emergency for the United States to aid the U.S. healthcare community in responding toCOVID-19, and on March 11, 2020 the World Health Organization characterized the outbreak as a “pandemic.” The outbreak ofCOVID-19 continues to grow both in the U.S. and globally and, while the extent of the impact of the outbreak on us will depend on future developments, it could limit our ability to complete our initial business combination, including as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable on terms acceptable to us or at all. Furthermore, we may be unable to complete a business combination if continued concerns relating toCOVID-19 restrict travel, limit the ability to have meetings with potential investors or the target company’s personnel, vendors and services providers, limit our ability to thoroughly conduct due diligence, or restrict our ability to negotiate and consummate a transaction in a timely manner. Additionally, the outbreak ofCOVID-19 may negatively impact businesses we may seek to acquire. If the disruptions posed byCOVID-19 or other matters of global concern continue for an extensive period of time, our ability to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected. Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial business combination, and results of operations. We are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our initial business combination, and results of operations. Our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares. Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro-rata portion of our trust account distributed to our public stockholders upon the redemption of their shares of Class A Because we will not be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the 10 years following our dissolution. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. If our plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro-rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be barred with respect to any claim commenced after the third anniversary of the dissolution. We cannot assure you that we will properly assess all claims that may be potentially brought against us. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend beyond the third anniversary of such date. Furthermore, if the pro-rata portion of our trust account distributed to our public stockholders upon the redemption of the shares of our Class A We may not hold an annual meeting of stockholders until after the consummation of our initial business combination, which could result in our stockholders attempting to cause us to hold an annual meeting, presenting us with an additional expense. In accordance with the NYSE corporate governance requirements, we are not required to hold an annual meeting until one year after our first fiscal year end following our listing on the NYSE. Under Section 211(b) of the DGCL, we are, however, required to hold an annual meeting of stockholders for the purposes of electing directors in accordance with our bylaws unless such election is made by written consent in lieu of such a meeting. We may not hold an annual meeting of stockholders to elect new directors prior to the consummation of our initial business combination, and thus we may not be in compliance with Section 211(b) of the DGCL, which requires an annual meeting. Therefore, if our stockholders want us to hold an annual meeting prior to the consummation of our initial business combination, they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of the DGCL. Our The holders of the Class B We are not registering the shares of Class A We are not registering the shares of Class A warrant agreement, we have agreed that as soon as practicable, but in no event later than 15 business days after the closing of our initial business combination, we will use our best efforts to file with the SEC a registration statement for the registration under the Securities Act of the shares of Class A If you exercise your There are circumstances in which the exercise of the described above, each holder would pay the exercise price by surrendering the warrants for that number of Class A of Class A The grant of registration rights may make it more difficult to complete our initial business combination, and the future exercise of such rights may adversely affect the market price of our Class A
Because we are neither limited to evaluating a target business in a particular industry, nor have we selected any specific target businesses with which to pursue our initial business combination, you will be unable to ascertain the merits or risks of any particular target business’s operations. We may seek to complete a business combination with an operating company in any industry or sector. However, we will not, under our amended and restated certificate of incorporation, be permitted to effectuate our initial business combination with another blank check company or similar company with nominal operations. Because we have not yet selected or approached any specific target business with respect to our initial business combination, there is no basis to evaluate the possible merits or risks of any particular target business’s operations, results of operations, cash flows, liquidity, financial condition or prospects. To the extent we complete our business combination, we may be affected by numerous risks inherent in the business operations with which we combine. Although our directors and officers will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business. We also cannot assure you that an investment in our units will ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available, in a business combination target. Accordingly, any the value of their securities. Such stockholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our directors or officers of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy solicitation or tender offer materials, as applicable, relating to our initial business combination, constituted an actionable material misstatement or omission. Although we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial business combination may not have attributes entirely consistent with our general criteria and guidelines. Although we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business combination will not have all of these positive attributes. If we complete our initial business combination with a target that does not meet some or all of these criteria and guidelines, such combination may not be as successful as a combination with a business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business combination with a target that does not meet our general criteria and guidelines, a greater number of stockholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if stockholder approval of the transaction is required by law, or we decide to obtain stockholder approval for business or other legal reasons, it may be more difficult for us to attain stockholder approval of our initial business combination if the target business does not meet our general criteria and guidelines. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $20.00 per share, or less in certain circumstances, on the liquidation of our trust account, our We may, but are not required to, obtain an opinion from an independent investment banking firm or from an independent accounting firm, and consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our company from a financial point of view. Unless we complete our initial business combination with an affiliated entity or our board cannot independently determine the fair market value of the target business or businesses, we are not required to obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm that the price we are paying is fair to our company from a financial point of view. If no opinion is obtained, our stockholders will be relying on the judgment of our board of directors, who will determine fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed in our proxy materials or tender offer documents, as applicable, related to our initial business combination. We may issue additional common stock or preferred stock to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. In addition, we may issue a substantial number of shares of Class A Our amended and restated certificate of incorporation share, and 20,000,000 shares of Class B stock, par value $0.0001 per share. Immediately after this offering, there will be We may issue a substantial number of additional shares of common or preferred stock to complete our initial business combination or under an employee incentive plan after completion of our initial business combination (although our amended and restated certificate of incorporation The provisions of our amended and restated certificate of incorporation that enable or limit our ability to issue securities, like all provisions of our amended and restated certificate of incorporation, may be amended with the approval of our stockholders. However, our Sponsor, directors, director nominees and officers have agreed, pursuant to the The issuance of additional shares of common or preferred stock:
may significantly dilute the equity interest of investors in this offering;
may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock;
could cause a change of control if a substantial number of shares of our common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present directors and officers; and
may adversely affect prevailing market prices for our units, Class A Resources could be wasted in researching business combinations that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $20.00 per share, or less in certain circumstances, on the liquidation of our trust account, our We anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention, and substantial costs for accountants, attorneys, consultants and others. If we decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial business combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $20.00 per share, or less in certain circumstances, on the liquidation of our trust account our Our ability to successfully effect our initial business combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some of whom may join us following our initial business combination. The loss of key personnel could negatively impact the operations and profitability of our post-combination business. Our ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management or advisory positions following our initial business combination, it is likely that some or all of the management of the target business will remain in place. While we intend to closely scrutinize any individuals we employ after our initial business combination, we cannot assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements. In addition, the directors and officers of an initial business combination candidate may resign upon completion of our initial business combination. The departure of our initial business combination target’s key personnel could negatively impact the operations and profitability of our post-combination business. The role of our initial business combination candidate’s key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that certain members of our initial business combination candidate’s management team will remain associated with our initial business combination candidate following our initial business combination, it is possible that members of the management of our initial business combination candidate will not wish to remain in place. The loss of key personnel could negatively impact the operations and profitability of our post-combination business. We are dependent upon our directors and officers and their departure could adversely affect our ability to operate. Our operations are dependent upon a relatively small group of individuals and, in particular, directors and officers. We believe that our success depends on the continued service of our directors and officers, at least until we have completed our initial business combination. We do not have an employment agreement with, orkey-man insurance on the life of, any of our directors or officers. The unexpected loss of the services of one or more of our directors or officers could have a detrimental effect on us. Our key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination. These agreements may provide for them to receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether a particular business combination is the most advantageous. Our key personnel may be able to remain with us after the completion of our initial business combination only if they are able to negotiate employment or consulting agreements in connection with our initial business combination. Such negotiations would take place simultaneously with the negotiation of our initial business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render to us after the completion of our initial business combination. The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business. However, we believe the ability of such individuals to remain with us after the completion of our initial business combination will not be the determining factor in our decision as to whether or not we will proceed with any potential initial business combination. There is no certainty, however, that any of our key personnel will remain with us after the completion of our initial business combination. We cannot assure you that any of our key personnel will remain in senior management or advisory positions with us. The determination as to whether any of our key personnel will remain with us will be made at the time of our initial business combination. We may have a limited ability to assess the management of a prospective target business and, as a result, may affect our initial business combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company, which could, in turn, negatively impact the value of our stockholders’ investment in us. When evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess the target business’s management may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly, any Members of our The members of our Certain of our directors and officers are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in allocating their time and determining to which entity a particular business opportunity should be presented. Following the completion of this offering and until we consummate our initial business combination, we intend to engage in the business of identifying and combining with one or more businesses. Our directors, director nominees and officers are, and may in the future become, affiliated with entities that are engaged in a similar business, although each of our directors, director nominees and officers has agreed not to become a director or officer of any other special purpose acquisition company (other than, in the case of Ms. Reses, with respect to the special purpose acquisition company at which she currently serves as a director) with a class of securities registered under the In addition, although PSCM and its affiliates (including our Though we do not believe that PSCM and its affiliates’ activities present significant conflicts of interest with respect to our pursuit of an acquisition target, because we intend that our acquisition target will be a privately owned company, and the Our directors, director nominees and officers currently have, and any of them in the future may have, additional, fiduciary or contractual obligations to another entity pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity, including, without limitation, funds managed or advised by our Our directors and officers also may become aware of business opportunities which may be necessary or appropriate for presentation to other entities to which they owe certain fiduciary or contractual duties. Any presentation of such opportunities to such other entities may present additional conflicts. Accordingly, our directors and officers may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation to us. Our amended and restated certificate of incorporation None of the members of our Management Team or Investment Team are required to commit his or her full time to our affairs. The members of our Investment Team are employed by PSCM. While the members of our Management Team intend to vote as much of their time as they deem necessary to our affairs, and while we believe the seven members of our Investment Team will be able to allocate their duties to us and to PSCM in a manner that allows them to provide us with the resources and support we require while also fulfilling their responsibilities to PSCM, such persons may have conflicts of interest in allocating his or her time among various business activities. For a complete discussion of our officers’ and directors’ business affiliations and the potential conflicts of interest that you should be aware of, please see the sections of this prospectus entitled “Management—Directors, Director Nominees and Officers,” “Management—Conflicts of Interest” and “Certain Relationships and Related Party Transactions.” Our officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests. We have not adopted a policy that expressly prohibits our directors, officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest.
We may engage in an initial business combination with one or more target businesses that have relationships with entities that may be affiliated with our In light of the involvement of our Since the We have entered into a price of $20.00 per Our In addition, each of our directors, other than Mr. Ackman, Our We may issue notes or other debt instruments, or otherwise incur substantial debt, to complete our initial business combination, which may adversely affect our leverage and financial condition and thus negatively impact the value of our stockholders’ investment in us. Although we have no commitments as of the date of this prospectus to issue any notes or other debt instruments, or to otherwise incur outstanding debt following this offering, we may choose to incur substantial debt to complete our initial business. We have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the trust account. As such, no issuance of debt will affect theper-share amount available for redemption from the trust account. Nevertheless, the incurrence of debt could have a variety of negative effects, including:
default and foreclosure on our assets if our operating revenues after our initial business combination are insufficient to repay our debt obligations;
acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
our immediate payment of all principal and accrued interest, if any, if the debt 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 disadvantages compared to our competitors who have less debt. We may only be able to complete one business combination with the proceeds of this offering, the sale of the Of the net proceeds from this offering and the sale of the We may effectuate our initial business combination with a single target business or multiple target businesses simultaneously or within a short period of time. However, we may not be able to effectuate our business combination with more than one target business because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By completing our initial business combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory developments. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different areas of a single industry. We may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise to increased costs and risks that could negatively impact our operations and profitability. If we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete our initial business combination. We do not, however, intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination. With multiple business combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations. We are likely to attempt to complete our initial business combination with a private company about which little information is publicly available, which may result in an initial business combination with a company that is not as profitable as we suspected, if at all. In pursuing our initial business combination strategy, we are likely to seek to effectuate our initial business combination with a privately held company. Very little public information generally exists about private companies, and we could be required to make our decision on whether to pursue a potential initial business combination on the basis of limited information, which may result in our initial business combination with a company that is not as profitable as we suspected, if at all. Our management may We anticipate structuring our initial business combination so that our stockholders (including our Sponsor, the Forward Purchasers, and our public stockholders) will own a minority stake in the post-combination business, which post-combination business we anticipate will own or acquire 100% of the equity interests or assets of the target business or businesses. However, we may structure our initial business combination so that the We do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete our initial business combination with which a substantial majority of our stockholders do not agree. Our amended and restated certificate of incorporation In order to effectuate our initial business combination, blank check companies have, in the recent past, amended various provisions of their charters and other governing instruments, including their warrant agreements. We cannot assure you that we will not seek to amend our amended and restated certificate of incorporation or other governing documents in a manner that will make it easier for us to complete our initial business combination but that our stockholders or In order to effectuate our initial business combination, blank check companies have, in the recent past, amended various provisions of their charters and other governing instruments, including their warrant agreements. For example, blank check companies have amended the definition of business combination, increased redemption thresholds, and extended the time to consummate their initial business combinations and, with respect to their warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities. Amending the provisions of our amended and restated certificate of incorporation relating to certain pre-business combination activity and will require the The provisions of our amended and restated certificate of incorporation that relate to ourpre-business combination activity (and corresponding provisions of the agreement governing the release of funds from our trust account) including an amendment to permit us to withdraw funds from the trust account such that the Our amended and restated certificate of incorporation exclusive right to elect or remove directors prior to our initial business combination must be approved by holders of a majority of at least 90% of the voting power of the outstanding shares of our common stock entitled to vote thereon. In all other instances, our amended and restated certificate of incorporation may be amended by holders of a majority of the voting power of our outstanding common stock entitled to vote thereon, subject to applicable provisions of the DGCL or applicable stock exchange rules. We may not issue additional securities (other than the Our While our Sponsor may not propose certain amendments, our Sponsor may vote on such amendments, as may the Forward Purchasers if any Forward Purchase Units have been issued as of the record date for such a vote. If no Forward Purchase Units have been issued as of such time, and our Sponsor votes its 100 shares of Class B Common Stock in favor of such a matter, we would need 112,500,001, or 56.3%, of the 200,000,000 shares of Class A Common Stock issued in this offering to be voted in favor of such amendment for it to be approved. If the Forward Purchasers were to vote as recommended by us on a matter submitted to our stockholders for their approval (although they are under no obligation to do so), this would substantially increase the likelihood that any such matter would receive the requisite stockholder approval. For example, if the Forward Purchasers acquired all 50,000,000 of the Committed Forward Purchase Units prior to the record date for a stockholder vote on such an amendment and were to vote their Forward Purchase Shares in favor of such transaction, in addition to the voting power of such Forward Purchase Shares and the 100 shares of Class B Common Stock held by our Sponsor, we would need 95,000,001, or 47.5%, of the 200,000,000 shares of Class A Common Stock issued in this offering to be voted in favor of such amendment for it to be approved. If, prior to such record date, the Forward Purchasers acquired the total 150,000,000 Forward Purchase Units represented by the committed forward purchase and the additional forward purchase, in addition to the voting power of such Forward Purchase Shares and the 100 shares of Class B Common Stock held by our Sponsor, we would need 60,000,001, or 30%, of the 200,000,000 shares of Class A Common Stock issued in this offering to be voted in favor of such amendment for it to be approved. Each of the foregoing examples assumes that our Sponsor, officers, directors and director nominees do not acquire any other shares of Class A Common Stock and that all outstanding shares are voted. The amount of the additional forward purchase may be increased by mutual agreement of us and the Forward Purchasers, which could further diminish the influence and/or control of our public stockholders. In addition, the Director Forward Purchasers may acquire and be able to vote up to 300,000 Forward Purchase Shares prior to the initial business combination, representing approximately 0.1% of the voting power of the outstanding common stock in the above scenarios. Certain agreements related to this offering may be amended without stockholder approval. Each of the agreements related to this offering to which we are a party, other than the warrant agreements and the investment management trust agreement, may be amended without stockholder approval. Such agreements are: the underwriting agreement; the We may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon a particular business combination. Although we believe that the net proceeds of this offering and the sale of the
our initial business combination, our public stockholders may receive only approximately $20.00 per share, or less in certain circumstances, plus any pro-rata interest earned on the funds held in the trust account and not previously released to us to pay our taxes on the liquidation of our trust account, our Our Upon the closing of this offering, our For example, if the Forward Purchasers acquired all 50,000,000 of the Committed Forward Purchase Units prior to the record date for a stockholder vote on our initial business combination and were to vote their Forward Purchase Shares in favor of such transaction, in addition to the voting power of such Forward Purchase Shares and the 100 shares of Class B Common Stock held by our Sponsor, we would need only 50,000,001, or 25.0%, of the 200,000,000 shares of Class A Common Stock issued in this offering to be voted in favor of a transaction for it to be approved. If, prior to such record date, the Forward Purchasers acquired the total 150,000,000 Forward Purchase Units represented by the committed forward purchase and the additional forward purchase, our Sponsor and the Forward Purchasers would together effectively control the outcome of such vote, needing only one of the 200,000,000 shares of Class A Common Stock issued in this offering to be voted in favor of a transaction. With respect to certain amendments to our amended and restated certificate of incorporation that require the approval of 65% of the voting power of the outstanding shares of our common stock, assuming the Forward Purchasers and our Sponsor vote in favor of such an amendment, the approval of such amendment would require (i) the vote of 95,000,001, or 47.5%, of the 200,000,000 shares of Class A Common Stock issued in this offering, if only the Committed Forward Purchase Units have been issued, and (ii) the vote of 60,000,001, or 30%, of the 200,000,000 shares of Class A Common Stock issued in this offering, if the Committed Forward Purchase Units and Additional Forward Purchase Units have been issued. Each of the foregoing examples assumes that our Sponsor, officers, directors and director nominees do not acquire any other shares of Class A Common Stock and that all outstanding shares are voted. The amount of the additional forward purchase may be increased by mutual agreement of us and the Forward Purchasers, which could further diminish the influence and/or control of our public stockholders. In addition, the Director Forward Purchasers may acquire and be able to vote up to 300,000 Forward Purchase Shares prior to the initial business combination, representing approximately 0.1% of the voting power of the outstanding common stock in the above scenarios. We may amend the terms of the Our
We may redeem your unexpired We have the ability to redeem outstanding Redeemable Warrants or (iii) to accept the nominal redemption price which, at the time the outstanding In addition, we have the ability to redeem the outstanding Our We have entered into a Forward Purchase Agreement with the Forward Purchasers pursuant to which they have agreed to purchase at least $1,000,000,000, and up to an additional $2,000,000,000, of Forward Purchase Units, for an aggregate investment of up to $3,000,000,000 (or such greater amount of Additional Forward Purchase Units as mutually agreed upon). In addition, certain of our independent directors have agreed to purchase an aggregate of $6,000,000 of Forward Purchase Units. Each Forward Purchase Unit is composed of one share of Class A Common Stock and one-third of one warrant, at a price of $20.00 per Forward Purchase Unit. In addition, certain of our directors have committed to purchase Forward Purchase Units. Purchases of the Forward Purchase Units will take place in one or more private placements at any time prior to, and no later than simultaneously with, the closing of our initial business combination. If we do not complete an initial business combination, the Forward Purchasers will lose the investment opportunity presented by the Forward Purchase Agreement. We will be issuing of the post-combination offering. Our directors have agreed to purchase an aggregate amount The potential for the issuance of a substantial number of additional shares of Class A
Because each unit containsone-ninth of one warrant and only a whole warrant may be exercised, the units may be worth less than units of other blank check companies. Each unit containsone-ninth of one A provision of our warrant agreement may make it more difficult for us to consummate an initial business combination.
cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, Redeemable Warrants—Redemption of warrants when the price per share of Class A Common Stock equals or exceeds $20.00” will be adjusted (to the nearest cent) to be equal to 100% of the higher of the Market Value and the Newly Issued Price. The determination of the offering price of our units and the size of this offering is more arbitrary than the pricing of securities and size of an offering of an operating company in a particular industry. You may have less assurance, therefore, that the offering price of our units properly reflects the value of such units than you would have in a typical offering of an operating company. Prior to this offering there has been no public market for any of our securities. The public offering price of the units and the terms of the warrants were negotiated between us and the underwriters. In determining the size of this offering, management held customary organizational meetings with the representatives of the underwriters, both prior to our inception and thereafter, with respect to the state of capital markets, generally, and the amount the underwriters believed they reasonably could raise on our behalf. Factors considered in determining the size of this offering, prices and terms of the units, including the Class A
the history and prospects of companies whose principal business is the acquisition of other companies;
prior offerings of those companies;
our prospects for acquiring an operating business;
a review of debt to equity ratios in leveraged transactions;
our capital structure;
an assessment of our management and their experience in identifying operating companies;
general conditions of the securities markets at the time of this offering; and
other factors as were deemed relevant. Although these factors were considered, the determination of our offering price is more arbitrary than the pricing of securities of an operating company in a particular industry since we have no historical operations or financial results. There is currently no market for our securities and a market for our securities may not develop, which would adversely affect the liquidity and price of our securities. There is currently no market for our securities. Stockholders therefore have no access to information about prior market history on which to base their investment decision. Following this offering, the price of our securities may vary significantly due to one or more potential business combinations and general market or economic conditions, including as a result of theCOVID-19 outbreak. Furthermore, an active trading market for our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless a market can be established and sustained. Because we must furnish our stockholders with target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective target businesses. The federal proxy rules require that a proxy statement with respect to a vote on our initial business combination meeting certain financial significance tests include historical and/or pro forma financial statement disclosure in periodic reports. We will include the same financial statement disclosure in connection with our tender offer documents, whether or not they are required under the tender offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America, or GAAP, or international financial reporting standards as issued by the International Accounting Standards Board, or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such financial statements in time for us to disclose such financial statements in accordance with federal proxy rules and complete our initial business combination within the prescribed We are an “emerging growth company” within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies. We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, our stockholders may not have access to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our Class A Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply tonon-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources, and increase the time and costs of completing our initial business combination. Section 404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form10-K for the year ending December 31, 2021. Only in the event we are deemed to be a large accelerated filer or an accelerated filer will we be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. Further, for as long as we remain an emerging growth company, we will not be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target company with which we seek to complete our initial business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such initial business combination. Provisions in our amended and restated certificate of incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A Our amended and restated certificate of incorporation Section 203 of the DGCL affects the ability of an “interested stockholder” to engage in certain business combinations, for a period of three years following the time that the stockholder becomes an “interested stockholder.” We will take all necessary corporate action to ensure that our Our amended and restated certificate of incorporation
In March 2020, the Delaware Supreme Court issued a decision inSalzburg et al. v. Sciabacucchi, which found that an exclusive forum provision providing for claims under the Securities Act to be brought in federal court is facially valid under Delaware law. It is unclear whether this decision will be appealed, or what the final outcome of this case will be. We intend to enforce this provision, but we do not know whether courts in other jurisdictions will agree with this decision or enforce it. This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims. Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition. Cyber incidents or attacks directed at us could result in information theft, data corruption, operational disruption and/or financial loss. We depend on digital technologies, including information systems, infrastructure and cloud applications and services, including those of third parties with which we may deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential data. As an early stage company without significant investments in data security protection, we may not be sufficiently protected against such occurrences. We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business and lead to financial loss. If we effect our initial business combination with a company with operations or opportunities outside of the United States, we would be subject to a variety of additional risks that may negatively impact our operations. If we effect our initial business combination with a company with operations or opportunities outside of the United States, we would be subject to any special considerations or risks associated with companies operating in an international setting, including any of the following:
higher costs and difficulties inherent in managing cross-border business operations and complying with different commercial and legal requirements of overseas markets;
rules and regulations regarding currency redemption;
complex corporate withholding taxes on individuals;
laws governing the manner in which future business combinations may be effected;
tariffs and trade barriers;
regulations related to customs and import/export matters;
longer payment cycles and challenges in collecting accounts receivable;
tax issues, such as tax law changes and variations in tax laws as compared to the United States;
currency fluctuations and exchange controls;
rates of inflation;
cultural and language differences;
employment regulations;
crime, strikes, riots, civil disturbances, terrorist attacks, natural disasters and wars;
deterioration of political relations with the United States; and
government appropriations of assets. We may not be able to adequately address these additional risks. If we were unable to do so, our operations might suffer, which may adversely impact our results of operations and financial condition. CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS Some of the statements contained in this prospectus may constitute “forward-looking statements” for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our
our ability to select an appropriate target business or businesses;
our ability to complete our initial business combination, particularly in light of disruption that may result from limitations imposed by theCOVID-19 outbreak;
our expectations around the performance of the prospective target business or businesses;
our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;
our
our potential ability to obtain additional financing to complete our initial business combination;
our pool of prospective target businesses;
the ability of our directors and officers to generate a number of potential acquisition opportunities;
our public securities’ potential liquidity and trading;
the lack of a market for our securities;
the use of proceeds not held in the trust account or available to us from any interest income on the trust account balance;
the trust account not being subject to claims of third parties; or
our financial performance following this offering. The forward-looking statements contained in this prospectus are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described in the section of this prospectus entitled “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. We are offering
The following table shows the use of the
The rules of the NYSE provide that at least 90% of the gross proceeds from this offering and the sale of the become negative. Except with respect to interest earned on the funds held in the trust account that may be released to us to pay our tax obligations, the proceeds from this offering and the sale of the closing of this offering (or 30 months from the closing of this offering if we have executed a letter of intent, agreement in principle or definitive agreement for our initial business combination within 24 months from the closing of this offering but have not completed our initial business combination within such The net proceeds held in the trust account may be used as consideration to pay the sellers of a target business with which we ultimately complete our business combination. If our initial business combination is paid for using equity or debt instruments, or not all of the funds released from the trust account are used for payment of the consideration in connection with our business combination, we may apply the balance of the cash released from the trust account for general corporate purposes, including for maintenance or expansion of operations of the We believe that amounts not held in trust will be sufficient to pay the costs and expenses to which such proceeds are allocated. This belief is based on the fact that while we may begin preliminary due diligence of a target business in connection with an indication of interest, we intend to undertakein-depth due diligence, depending on the circumstances of the relevant prospective acquisition, only after we have negotiated and signed a letter of intent or other preliminary agreement that addresses the terms of a business combination. However, if our estimate of the costs of undertakingin-depth due diligence and negotiating a business combination is less than the actual amount necessary to do so, we may be required to raise additional capital, the amount, availability and cost of which is currently unascertainable. If we are required to seek additional capital, we could seek such additional capital through loans or additional investments from our Our This loan In addition, in order to finance transaction costs in connection with an intended initial business combination, our amounts out of the proceeds of the trust account released to us. Otherwise, such loans would be repaid only out of funds held outside the trust account. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. The terms of such loans by our directors and officers, if any, have not been determined and no written agreements exist with respect to such loans. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our We have entered into a The Prior to or concurrently with this offering, we will enter into a Director Forward Purchase Agreement with certain of our independent directors. The Director Forward Purchaser have agreed to purchase, in one or more private placements in such amounts and at such time or times as each Director Forward Purchaser determines, but no later than simultaneously with the closing of our initial business combination, an aggregate of $6,000,000 of Forward Purchase Units. The proceeds from purchases of If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our completion of our initial business combination. However, they have no current commitments, plans or intentions to engage in such transactions, and have not formulated any terms or conditions for any such transactions. If they engage in such transactions, they will not make any such purchases when they are in possession of any materialnon-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules. We may not redeem the shares of Class A A public stockholder will be entitled to receive funds from the trust account only upon the earliest to occur of: (i) our completion of our initial business Our We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our initial business combination. The payment of any cash dividends subsequent to our initial business combination will be within the discretion of our board of directors at such time. Further, if we incur any indebtedness in connection with our business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith. Our amended and restated certificate of incorporation The difference between the public offering price per share of Class A At
For purposes of presentation, we have reduced our pro forma net tangible book value after this offering The following table sets forth information with respect to our
The pro forma net tangible book value per share after the offering is calculated as follows:
The following table sets forth our capitalization at
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview We are a blank check company incorporated as a Delaware corporation 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 have not selected any specific business combination target and we have not, nor has anyone on our behalf, The issuance of additional shares of our stock in a business combination, including the
may significantly dilute the equity interest of investors in this offering;
may subordinate the rights of holders of our common stock if preferred stock is issued with rights senior to those afforded our common stock;
could cause a change in control if a substantial number of shares of our common stock is 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 stock ownership or voting rights of a person seeking to obtain control of us; and
may adversely affect prevailing market prices for our Class A Similarly, if we issue debt instruments or otherwise incur significant debt to bank or other lenders or owners of a target, it could result in:
default and foreclosure on our assets if our operating revenues after our initial business combination are insufficient to repay our debt obligations;
acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
our immediate payment of all principal and accrued interest, if any, if the debt 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. As indicated in the accompanying financial statements, at Results of Operations and Known Trends or Future Events We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for this offering. Following this offering, we will not generate any operating revenues until after completion of our initial business combination. We may generatenon-operating income in the form of interest income on cash and cash equivalents after this offering. 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. After this offering, we expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. We expect our expenses to increase substantially after the closing of this offering. Liquidity and Capital Resources Our liquidity needs have been satisfied prior to the completion of this offering through a capital contribution of our We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (less taxes payable and deferred underwriting commissions), and the proceeds from the sale of the Prior to the completion of our initial business combination, we will have available to us the approximately In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our We expect our primary liquidity requirements during that period to include approximately These amounts are estimates and may differ materially from our actual expenses. In addition, we could use a portion of the funds not being placed in trust to pay commitment fees for financing, fees to consultants to assist us with our search for a target business or as a down payment or to fund a“no-shop” provision (a provision designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into an agreement where we paid for the right to receive exclusivity from a target business, the amount that would be used as a down payment or to fund a“no-shop” provision would be determined based on the terms of the specific business combination and the amount of our available funds at the time. Our forfeiture of such funds (whether as a result of our breach or otherwise) could result in our not having sufficient funds to continue searching for, or conducting due diligence with respect to, prospective target businesses. We do not believe we will need to raise additional funds following this offering in order to meet the expenditures required for operating our business. However, if our estimates of the costs of identifying a target business, undertakingin-depth due diligence and negotiating our initial 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 either to complete our business combination or because we become obligated to redeem a significant number of the shares of our Class A Controls and Procedures We are not currently required to maintain an effective system of internal controls as defined by Section 404 of the Sarbanes-Oxley Act. We will be required to comply with the internal control requirements of the Sarbanes-Oxley Act for the fiscal year ending December 31, 2021. Only in the event that we are deemed to be a large accelerated filer or an accelerated filer would we be required to comply with the independent registered public accounting firm attestation requirement. Further, for as long as we remain an emerging growth company as defined in the JOBS Act, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirement. Prior to the closing of this offering, we have not completed an assessment, nor have our auditors tested our systems, of internal controls. We expect to assess the internal controls of our target business or businesses prior to the completion of our initial business combination and, if necessary, to implement and test additional controls as we may determine are necessary in order to state that we maintain an effective system of internal controls. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding the adequacy of internal controls. Many small andmid-sized target businesses that we may consider for our business combination may have internal controls that need improvement in areas such as:
staffing for financial, accounting and external reporting areas, including segregation of duties;
reconciliation of accounts;
proper recording of expenses and liabilities in the period to which they relate;
evidence of internal review and approval of accounting transactions;
documentation of processes, assumptions and conclusions underlying significant estimates; and
documentation of accounting policies and procedures. Because it will take time, management involvement and perhaps outside resources to determine what internal control improvements are necessary for us to meet regulatory requirements and market expectations for our operation of a target business, we may incur significant expense in meeting our public reporting responsibilities, particularly in the areas of designing, enhancing, or remediating internal and disclosure controls. Doing so effectively may also take longer than we expect, thus increasing our exposure to financial fraud or erroneous financing reporting. Once our management’s report on internal controls is complete, we will retain our independent auditors to audit and render an opinion on such report when required by Section 404 of the Sarbanes-Oxley Act. The independent auditors may identify additional issues concerning a target business’s internal controls while performing their audit of internal control over financial reporting. Quantitative and Qualitative Disclosures about Market Risk The net proceeds of this offering and the sale of the Related Party Transactions On May 7, 2020, our
Our Our In addition, in order to finance transaction costs in connection with an intended initial business combination, our We have entered into a The The obligation of each
Prior to or concurrently with this offering, we will enter into a Director Forward Purchase Agreement with certain of our independent directors. The Director Forward Purchasers have agreed to purchase, in one or more private placements in such amounts and at such time or times as each Director Forward Purchaser determines, but no later than simultaneously with the closing of our initial business combination, an aggregate of $6,000,000 of Forward Purchase Units. The Director Forward Purchasers have agreed to purchase the following amounts of Forward Purchase Units: Mr. Ovitz, $5,000,000 and Ms. Reses, $1,000,000. The Director Forward Purchasers may not transfer their obligation to purchase such Forward Purchase Units, other than to our Sponsor, other directors and Affiliate Transferees. Such Forward Purchase Securities will be subject to certain transfer restrictions and have certain registration rights, as described herein. The proceeds of purchases Concurrently with this offering, our The term “fully diluted basis” means exercisable into or exchangeable for, or that tracks the performance of, shares of common stock (including any equity or equity-based award), in each case without regard to whether such warrant, option or Each of our directors, other than Mr. Ackman, Of the The purchases of the Our transferees receiving such securities will be subject to the same agreements with respect to such securities as the transferor. Otherwise, the
Off-Balance Sheet Arrangements; Commitments and Contractual Obligations; Quarterly Results As of JOBS Act On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We will qualify as an “emerging growth company” and under the JOBS Act will be 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 fornon-emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions, we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required ofnon-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive Introduction We are a newly organized, blank check company incorporated in Delaware 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, which we refer to throughout this prospectus as our initial business combination. Our Pershing Square was established in 2003, and had approximately Pershing Square also served as co-sponsor of Justice Holdings, Ltd., Our The Pershing Square We believe that we will have substantial competitive advantages when compared with other blank check companies and other sources of equity We will have the largest amount of committed capital of any blank check company upon the completion of this offering. As a result of this offering and the We intend to merge with one company through a transaction in which our stockholders (just prior to the initial business combination) will own a minority interest in the company that is created as a result of the initial business combination. We believe that a substantial majority of other investors in private companies are not prepared to (or are not able to) deploy $5,000,000,000 or more of cash in the acquisition of a minority interest in a company. While comparably sized or larger investment funds generally seek to acquire controlling or 100% interests in a company, we are willing to execute a transaction in which our stockholders will own a minority stake in a large-capitalization private company. As a result, we believe we will be one of the largest sources of cash equity capital for a private, single-company, minority investment in the world. As the largest blank check company currently pursuing a business combination, we can offer a larger-capitalization private company (with market capitalization of $10,000,000,000 or more) the opportunity to gain access to the public equity markets, without such company having to conduct its own initial public offering (“IPO”). Through a merger, we will be, in effect, facilitating the IPO of a large private company, enabling a private business to avoid the inherent costs and risks associated with the traditional IPO process. We intend to pursue merger opportunities with private, large capitalization, high-quality, growth We believe that our unique structure and our willingness to acquire a minority interest in a company will help facilitate the completion of a transaction on attractive terms. We believe that this unique structure will result in greater alignment and substantially less dilution than other blank check companies offer to a potential merger partner or stockholders, as explained in further detail below. We believe the price at which we can, through a merger, acquire a minority interest in a large, high-quality business is substantially lower than the
Affiliates of our We also believe that the economic and market dislocation resulting from theCOVID-19 pandemic, First, as a result of the currently high degree of stock market and debt capital market volatility, it has become increasingly difficult for even a high-quality, well-managed, large capitalization company to execute a public offering on favorable terms. Completion of an The primary drawback to a company that is considering going public through a business combination with our company is that, as a special purpose acquisition company, we are required to permit our stockholders to redeem their shares in connection with the initial business combination at the per-share value of the trust account, which creates uncertainty with respect to the ultimate amount of capital we will have available at the time of our initial business combination. We believe that the substantial capital from our Forward Purchasers (equal to 25%, and as much as 75%, of the amount raised in this offering) significantly ameliorates this risk, as it provides committed capital to replace redeeming stockholders. Further, we view the risk of redemption as comparable to the risks inherent in the IPO market, where market conditions at the time of a planned IPO can significantly reduce the proceeds of the offering below the amount expected, or even cause the offering to be abandoned. As a result, on balance, we believe that going public through a business combination with our company is likely to be attractive to potential business combination partners. Second, over the past decade, numerous high-quality, venture-backed businesses have achieved significant scale, market share, competitive dominance and cash Furthermore, the short-term impact ofCOVID-19 on many of these Mature Unicorns has, even with respect to many of the highest quality companies in this sector, reduced their revenues and cash flows, thereby increasing their need for additional capital. In light of our large amount of committed capital and our willingness to effectuate a merger in which our stockholders will own a minority,non-controlling interest in a company, we believe that we are Third, the economic disruption ofCOVID-19 has substantially negatively impacted the revenues and cash flows of many large private equity portfolio In light of their typically highly leveraged balance sheets, these companies will likely require substantial equity infusions to withstand the impact of the crisis. Given our large amount of committed capital and our willingness to effectuate a merger in which our initial stockholders will be minority stockholders in a merger, we believe that we are Fourth, the economic disruption ofCOVID-19 has also negatively impacted the revenues and cash flows of many large, high-quality, private family-owned companies, which will require them to raise equity capital. We believe that our ability to recapitalize and facilitate a public offering of a family-owned business without the typical uncertainty, upfront costs and the time-consuming nature of the IPO process, will enable us to merge with a large, family-owned business on highly favorable terms. We intend to source initial business combination opportunities through Mr. Ackman’s and PSCM’s extensive relationships network of private business owners, public and private company executives and board members, venture capital fund managers, private equity and debt fund managers, investment bankers, ultra-high net worth families and their advisors, commercial bankers, attorneys, management consultants, accountants and other transaction intermediaries. We believe that this approach, augmented by the relationships and experience of our directors, will generate a substantial number of potential transaction alternatives that will create significant value for our stockholders. Our independent director nominees have experience with public equity and debt markets, private equity, venture capital and growth company investments, as well as corporate strategy and operations, which will further assist us in identifying potential business combination candidates. We believe our ability to complete our initial business combination will be enhanced by how we have structured this offering. First, our Second, we have entered into a sold in one or more private placements no later than simultaneously with the closing of our initial business combination. We believe that this large amount of committed capital and potential incremental capital represent a competitive advantage as we seek to attract potential business combination targets. Third, our stockholders are subject to far less potential dilution than is the case with many other blank check companies. Unlike other blank check companies, our entitled to a portion of the value of the company regardless as to whether the company increases or decreases in value, our We have not selected any specific business combination target and we have not, nor has anyone on our behalf, Our Management Team Our William Ackman, our Chairman and Chief Executive Officer, and Ben Hakim, our Chief Financial Officer, who will both be supported by the PSCM investment team, the broader PSCM organization and our independent directors, as further described below. Mr. Ackman, Mr. Hakim and each other member of the PSCM investment team (the The
sourcing, structuring, and executing on a wide range of investment opportunities;
providing constructive strategic and operational guidance to management teams and boards of directors, to drive long-term stockholder value creation;
leveraging insights from their substantial investment, financial, operational oversight and governance experience to help optimize the financial condition, operating performance and strategy of a company; and
leveraging their extensive network of relationships to augment or complement the senior management team or board of directors of a company. William Ackman serves as our Chairman and Chief Executive Officer. Mr. Ackman founded Pershing Square in 2003, and is principally responsible for its investment policies and implementation. Mr. Ackman has spent 28 years in the investment management industry. Prior to forming Pershing Square, heco-founded Gotham Partners Management Co., LLC, an investment adviser that managed public and private equity portfolios. Mr. Ackman is currently Chairman of the Board of the Howard Hughes Corporation, and a member of the Investment Advisory Committee of the Federal Reserve Bank of NY. Mr. Ackman received his Bachelor of Arts degree from Harvard College, where he graduated magna cum laude, and received his Masters in Business Administration from Harvard Business School. Ben Hakim serves as our Chief Financial Officer. Mr. Hakim is a Partner at Pershing Square and joined the Our Investment Team In addition to Mr. Ackman and Mr. Hakim, our Ryan Israel is a Partner at Pershing Square and joined the Anthony Massaro is a Partner at Pershing Square and joined the Charles Korn is a Partner at Pershing Square and joined the Bharath Alamanda joined the Pershing Square Feroz Qayyum joined the Pershing Square Our Independent Director Nominees Our Lisa Gersh co-founded Oxygen Media (“Oxygen”) in 1999 and remained its President and Chief Operating Officer until the company’s sale to NBC in 2007 for $925 million. Oxygen was the Following the sale of Oxygen, Ms. Gersh joined NBC and spearheaded NBC’s acquisition of the Weather Channel, serving briefly as its interim Chief Executive Officer. Also at NBC, Ms. Gersh launched Education Nation, a transformative education initiative that established NBC as the media authority on education. In 2011, Ms. Gersh took over the operations of Martha Stewart Living Omnimedia, Inc. (“Martha Stewart”), first as President and later as its Chief Executive Officer. During her tenure, Ms. Gersh rebranded Martha Stewart, materially reduced its operating expenses, and returned the company to profitability. In 2014, Ms. Gersh transformed Gwyneth Paltrow’s blog, Goop, Inc. (“Goop”), into the first contextual commerce brand. In the process of taking Goop from a collection of recommendations to a freestanding brand, Ms. Gersh oversaw, among other things, the launch of Goop’s e-commerce store, skincare and fashion lines, and created Goop’s pop-up retail strategy. In 2017, Ms. Gersh was named Chief Executive Officer of Alexander Wang, a global fashion brand based in New York City. A graduate of Rutgers Law School, Ms. Gersh began her career as a lawyer, first as a litigation associate at Debevoise & Plimpton LLP, and then as a Partner at Friedman, Kaplan, Seiler & Adelman LLP, a boutique law firm specializing in complex litigation and commercial transactions, which Ms. Gersh co-founded, and which today has more than 50 lawyers. Currently, Ms. Gersh sits on the board of directors of Hasbro, Inc., where she chairs the Compensation Committee, and Establishment Labs Holdings Inc., where she chairs the Nomination and Governance Committee. She also serves on the board of directors of the Bail Project, Inc. and the Samsung Retail Advisory Board. Ms. Gersh previously served on the board of directors of comScore, Inc. Michael Ovitzco-founded Creative Artists Agency (CAA) in 1974 and served as its Chairman until 1995. Over that20-year period, he grew the agency from astart-up organization to the world’s leading talent agency, representing more than 1,000 of the most notable actors, directors, musicians, screenwriters and other personalities in the entertainment industry including Martin Scorsese, Sean Connery, Robert Redford, Paul Newman, Robert DeNiro, Al Pacino, Bill Murray, Dustin Hoffman, Steven Spielberg, David Letterman, Meryl Streep, Barbara Streisand, Michael Crichton and Michael Jackson. In his journey from the mailroom to media mogul, Mr. Ovitz launched the most powerful agency in the world (to date), sold three major Hollywood studios, executed all marketing and advertising for The Coca-Cola Company (including creating the Polar Bear Campaign) and was at the forefront of the digital revolution, making alliances with Intel Corporation and other early Silicon Valley companies. Mr. Ovitz also served as President of the Walt Disney Company, from October 1995 to January 1997. In 2010, Mr. Ovitz founded the venture capital fund Broad Beach Ventures LLC, a portfolio of over thirty companies. He has been a senior advisor to Palantir Technologies for over 10 years and has invested in and advised companies from startups to black swans. He was instrumental in the creation of venture capital firm Andreessen Horowitz and frequently consults for Founders Fund, 8VC and many other firms. In 2018, Mr. Ovitz wrote and published his memoirWho Is Michael Ovitz?, which was on the long list for The Financial Times and McKinsey Business Book of the Year Award. Mr. Ovitz is a graduate of University of California, Los Angeles, and helped rebuild the UCLA Medical Center in 1997 while serving as its Chairman for over a decade. Mr. Ovitz is also a notable art collector and serves on The Board of Trustees at The Museum of Modern Art in New York City. Jacqueline D. Reses serves as the Head of Square Capital, LLC, a wholly owned subsidiary of Square, Inc. (“Square”), which focuses on facilitating small business credit to businesses which have been Joseph S. Steinberg is Chairman of the Board of Directors of Jefferies Financial Group Inc., and, from January 1979 until March 1, 2013, served as President of Leucadia National Corporation (now Jefferies Financial Group Inc.). He has also been a director of Jefferies Group since 2008, Crimson Wine Group since 2013 and served as a director of HomeFed Corporation from August 1998 and Chairman of the Board from December 1999 until its acquisition by Metals Group Ltd. Mr. Steinberg has managerial and investing experience in a broad range of businesses through his more than 40 years as President and a director of Leucadia National Corporation and now as Chairman and a director of Jefferies Financial Group Inc.
Notwithstanding our founders’ and Our Forward Purchase Agreement, Sponsor Warrants and We believe our ability to complete our initial business combination will be enhanced by our having entered into the Under the The The terms of the Concurrently with this offering, our determined by Each of our directors, other than Mr. Ackman, Of the Our Business Strategy Our business strategy is to identify and complete a business combination that creates substantial long-term value for our stockholders. We will seek target companies that demonstrate the characteristics set out under “Our Acquisition Criteria” below. We believe our We will consider companies in a wide range of industries, but generally will seek to acquire a simple, high-quality, high-return on capital business that generates predictable growing cash flows that can be estimated within a reasonable range over the long term. We will prefer targets that have low sensitivity to macroeconomic factors, with minimal commodity exposure and/or cyclical risk. We are willing to accept a high degree of situational, legal, and/or capital structure complexity in a business combination if we believe that the potential for reward justifies this additional complexity, particularly if these issues can be resolved in connection with and as a result of a combination with us. To achieve a successful initial business combination, our Following the completion of this offering, we intend to begin the process of communicating with the network of relationships of our Our Acquisition Criteria Consistent with our core investment principles and business strategy, we expect to identify high-quality companies that have a number of the characteristics enumerated below. We will use these criteria and guidelines in evaluating acquisition opportunities, but we may decide to complete our initial business combination with a target business that does not meet all of these criteria. We will seek to acquire companies that have the following characteristics:
Simple, predictable, and free-cash-flow-generative. We will generally seek companies with a proven track record of growth and
Formidable barriers to entry. We will seek companies that have long-term sustainable competitive advantages, significant barriers to entry, or “wide moats,” around their business, and low risks of disruption due to competition, innovation or new entrants;
Limited exposure to extrinsic factors that we cannot control. We will seek companies that are not materially affected by macroeconomic factors, commodity prices, regulatory risks, interest rate volatility and/or cyclical risk;
Strong balance sheet. We will seek companies that are conservatively financed relative to their free-cash-flow generation, after taking into consideration the de-leveraging effects of the initial business combination;
Minimal capital markets dependency.We will seek companies that can benefit from being a public company with broader access to the capital markets and greater governance, but will
Large capitalization.We will seek companies with large enterprise values and significant long-term growth potential that will be likely candidates for inclusion in the S&P 500 index;
Attractive valuation. We will seek companies at an attractive valuation relative to their long-term intrinsic value; and
Exceptional management and governance. We will seek companies that have trustworthy, talented, experienced, and highly competent management teams. These companies may be led by entrepreneurs who are looking for a partner with our expertise to execute on the next stage of their growth. For target companies that require new management, we will leverage PSCM’s experience in identifying and recruiting new management. These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines, as well as other considerations, factors and criteria that our management and our event that we decide to enter into our initial business combination with a target business that does not substantially meet the above criteria and guidelines, we will disclose that the target business does not substantially meet the above criteria in our stockholder communications related to our initial business combination, which, as discussed in this prospectus, would be in the form of tender offer documents or proxy solicitation materials that we would file with the SEC. Our Acquisition Process In evaluating a prospective target business, we expect to conduct a detailed due diligence review of the issues that we deem important in order to determine a company’s business quality and estimate its intrinsic value. That due diligence review will include, among other things, financial statement analysis, detailed document reviews, meetings with incumbent management and employees, consultations with relevant industry experts, competitors, customers and suppliers, as well as a review of additional financial, legal and other information that we will seek to obtain as part of our analysis of a target company. We
Each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors is included by a target business as a condition to any agreement with respect to our initial business combination. Members of our Management Team are not obligated to devote any specific number of hours to our matters, but they intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination. In addition, we have an Investment Team comprised of seven members, who are employed by PSCM. We believe our Investment Team members will be able to allocate their duties to us and to PSCM amongst themselves in a manner that allows them to provide us with the resources and support we require while fulfilling their responsibilities to PSCM. The amount of time that any such person will devote in any time period will vary based on whether a target business has been selected for our initial business combination and the current stage of the business combination process. Our PSCM and its affiliates (including our investside-by-side with our company. Our amended and restated certificate of incorporation provides that Each of our Although the current and future fiduciary duties or contractual obligations of our directors or officers could materially undermine our ability to complete our business combination, we believe this risk is partly mitigated for the Initial Business Combination So long as we obtain and maintain a listing for our securities on the NYSE, our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in the trust account (excluding the amount of any deferred underwriting discount held in trust) at the time of our signing a definitive agreement in connection with our initial business combination. If our securities are no longer listed on the NYSE, we will not be obligated to satisfy such 80% test. If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm which is a member of FINRA or a valuation or appraisal firm with respect to the satisfaction of such criteria. While we consider it unlikely that our board will not be able to make an independent determination of the fair market value of a target business or businesses, it may be unable to do so if the board is less familiar or experienced with the target company’s business, there is a significant amount of uncertainty as to the value of the company’s assets or prospects, including if such company is at an early stage of development, operations or growth, or if the anticipated transaction involves a complex financial analysis or other specialized skills and the board determines that outside expertise would be helpful or necessary in conducting such analysis. Since any opinion, if obtained, would merely state that the fair market value of the target business meets the 80% of assets threshold, unless such opinion includes material information regarding the valuation of a target business or the consideration to be provided, it is not anticipated that copies of such opinion would be distributed to our stockholders. However, if required under applicable law, any proxy statement that we deliver to stockholders and file with the SEC in connection with a proposed transaction will include such opinion. We anticipate structuring our initial business combination so that our stockholders (including our Sponsor, the Effect of Sponsor Warrants and Director Warrants on Ownership The unique structure of our Sponsor Warrants and Director Warrants, which provide our Sponsor and directors with a fixed percentage of the pro forma post-combination business immediately after the initial business combination, will have different effects on the ownership interest of our public stockholders in the post-combination business as compared to the typical structure of blank check companies, in which the Sponsor maintains a fixed 20% interest in the pre-combination business. Specifically, the dilutive effect of the Sponsor Warrants and Director Warrants depends on the price of the post-combination business’s common shares at the time of exercise (the “Market Price”), and only exists to the extent the Market Price exceeds the exercise price. Though the number of shares issuable to the holders of the Sponsor Warrants and Director Warrants (for the purposes of this discussion, the “Private Holders”) is calculated as approximately 6.21% of the fully-diluted common shares outstanding immediately following the initial business combination, the actual ownership stake of the Private Holders in the post-combination business upon the exercise of all warrants will differ significantly. At or below the $24.00 exercise price of the Sponsor Warrants and Director Warrants, the Private Holders will not have any ownership stake. Accordingly, there will be no dilutive effect on the public stockholders and the holders of the Redeemable Warrants (for the purposes of this discussion, the “Public Holders”). At higher Market Prices, the ownership stake (and overall dilutive effect) of the Private Holders increases towards its limit of approximately 6.21%. The following table presents the dilutive effect of the Sponsor Warrants and Director Warrants as (i) the change in the Public Holders’ ownership stake with and without taking into account the Sponsor Warrants and Directors Warrants, as a percentage of (ii) the Public Holders’ ownership stake if the Sponsor Warrants and Director Warrants did not exist. The dilutive effect is shown across a range of transaction sizes and Market Prices at the time of the initial business combination. The scenarios below assume no redemptions of Class A Common Stock and that the Forward Purchasers purchase the $1,000,000,000 of Committed Forward Purchase Units (50,000,000 Forward Purchase Units). If the target company is valued at $10.0 billion and the Market Price is $20.00, the $4,000,000,000 represented by the shares of Class A Common Stock sold in the offering gives the Public Owners an ownership stake of 40.0% in the post-combination business, whether or not the Sponsor Warrants exist (as none of the warrants are exercisable at this Market Price). At a Market Price of $36.00, the Public Owners have an ownership stake of 42.3% (reflecting exercise of their Redeemable Warrants), without taking into account the Sponsor Warrants and Director Warrants. By including the Sponsor Warrants and Director Warrants, their ownership stake decreases to 41.3%. The dilutive effect, calculated as the 1.0% decline in ownership stake, divided by 42.3%, is 2.4%. If the target company is valued at $25.0 billion and the Market Price is $20.00, the $4,000,000,000 represented by the shares of Class A Common Stock sold in the offering gives the Public Owners an ownership stake of 16.0% in the post-combination business, whether or not the Sponsor Warrants exist (as none of the warrants are exercisable at this Market Price). At a Market Price of $36.00, the Public Owners have an ownership stake of 17.5% (reflecting exercise of their Redeemable Warrants), absent the Private Holders. Including the Private Holders, their ownership stake decreases to 17.1%. The dilutive effect, calculated as the 0.4% decline in ownership stake, divided by 17.5%, is 2.2%. As shown below, the size of ownership stake of all of our pre-combination stockholders and warrant holders decreases proportionately with a larger deal size. However, the dilutive effect does not vary significantly with deal size.
All warrants are assumed to be exercised by surrendering such warrants for that number of common shares of the post-combination business equal to the quotient obtained by dividing (x) the product of the number of common shares underlying such warrants, multiplied by the excess of the Market Price over the exercise price of such warrants, by (y) the Market Price. Status as a Public Company We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding anon-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile. Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A common stock that is held bynon-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion innon-convertible debt securities during the prior three-year period. References herein to “emerging growth company” shall have the meaning associated with it in the JOBS Act. Financial Position As a result of this offering and the committed forward purchase, we expect to have a minimum of Effecting our Initial Business Combination We are not presently engaged in, and we will not engage in, any operations for an indefinite period of time following this offering. We intend to effectuate our initial business combination using cash from the proceeds of this offering and the private placement of the If our initial business combination is paid for using equity or debt instruments, or not all of the funds released from the trust account are used for payment of the consideration in connection with our business combination or used for redemptions of our Class A In addition to the Sources of Target Businesses We anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including investment market participants, private equity fund sponsors, investment banking firms, consultants, accounting firms and large business enterprises. These sources may also introduce us to target businesses in which they think we may be interested on an unsolicited basis, since many of these sources will have read this prospectus and know what types of businesses we are targeting. Our directors and officers, as well as their affiliates, may also bring to our attention target business candidates that they become aware of through their business contacts as a result of formal or informal inquiries or discussions they may have, as well as attending trade shows or conventions. In addition, we expect to receive a number of proprietary deal flow opportunities that would not otherwise necessarily be available to us as a result of the business relationships of our directors and officers. We may engage the services of professional firms (such as a boutique investment bank) or other individuals that specialize in business acquisitions on any formal basis, in which event we may pay a finder’s fee, consulting fee or other compensation to be determined in an arm’s-length negotiation based on the terms of the transaction. We will engage such parties only to the extent our management determines that doing so may bring opportunities to us that may not otherwise be available to us, or if finders approach us on an unsolicited basis with a potential transaction that our management determines is in our best interest to pursue. Payment of finder’s fees is customarily tied to completion of a transaction, in which case any such fee will be paid out of the funds held in the trust account. In no event, however, will our We are not prohibited from pursuing our initial business combination with a business combination target that is affiliated with our As more fully discussed in the section of this prospectus entitled “Management—Conflicts of Interest,” if any of our directors or officers becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she haspre-existing fiduciary or contractual obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us. Selection of a Target Business and Structuring of our Initial Business Combination So long as we obtain and maintain a listing for our securities on the NYSE, our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in the trust account (excluding the amount of any deferred underwriting discount held in trust) at the time of our signing a definitive agreement in connection with our initial business combination. If our securities are no longer listed on the NYSE, we will not be obligated to satisfy such 80% test. The fair market value of the target or targets will be determined by our board of directors based upon one or more standards generally accepted by the financial community, such as discounted cash flow valuation or value of comparable businesses. If our board is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm that is a member of FINRA, or from an independent accounting firm, with respect to the satisfaction of such criteria. We do not intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination. Subject to this requirement, our management will have virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses, although we will not be permitted to effectuate our initial business combination with another blank check company or a similar company with nominal operations. In any case, we will only complete an initial business combination in which we own or acquire 50% or more of the outstanding voting securities of the target or otherwise acquire an interest in the target sufficient for the To the extent we effect our business combination with a company or business that may be financially unstable or in its early stages of development or growth, we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors. In evaluating a prospective target business, we expect to conduct a thorough due diligence review, which will encompass, among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as well as a review of financial and other information that will be made available to us. The time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business with which our business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination. Lack of Business Diversification For an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend entirely on the future performance of a single business. We intend to focus our search for our initial business combination in a single industry. By completing our business combination with only a single entity, our lack of diversification may:
subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination, and
cause us to depend on the marketing and sale of a single product or limited number of products or services. Limited Ability to Evaluate the Target’s Management Team Although we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting our business combination with that business, our assessment of the target business’ management may not prove to be correct. In addition, the future management may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of our combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our business combination. Moreover, we cannot assure you that members of our We cannot assure you that any of our key personnel will remain in senior management or advisory positions with the combined company. The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our initial business combination. Following a business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management. Stockholders May Not Have the Ability to Approve We may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC. However, we will seek stockholder approval if it is required by law or applicable stock exchange rule, or we may decide to seek stockholder approval for business or other legal reasons. Presented in the table below is a graphic explanation of the types of initial business combinations we may consider and whether stockholder approval is currently required under Delaware law for each such transaction.
Under the NYSE’s listing rules, stockholder approval would be required for our initial business combination if, for example:
we issue common stock that will be equal to or in excess of 20% of the number of shares of our Class A any of our directors, officers or substantial security holders (as defined by NYSE rules) has a 5% or greater interest, directly or indirectly, in the target business or assets to be acquired and the number of shares or common stock to be issued, or if the number of shares into which the securities may be convertible or exercisable, exceeds either (a) 1% of the number of shares of common stock or 1% of the voting power outstanding before the issuance in the case of any of our directors, director nominees and officers or (b) 5% of the number of shares of common stock or 5% of the voting power outstanding before the issuance in the case of any substantial security holders; or
the issuance or potential issuance of common stock will result in our undergoing a change of control (as defined by NYSE rules). Permitted Purchases of In the event we seek stockholder approval of our business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our business combination. None of the funds in the trust account will be used to purchase The purpose of such purchases would be to (i) vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of the business combination or (ii) to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our business combination, where it appears that such requirement would otherwise not be met. This may result in the completion of our business combination that may not otherwise have been possible. In addition, if such purchases are made, the public “float” of our Class A Our Any purchases by our Redemption Rights for Public Stockholders upon Completion of our Initial Business Combination We will provide our public stockholders with the opportunity to have all or a portion of their shares of Class A this offering. Theper-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. Our Distribution of Redeemable Warrants to Holders of Class A Common Stock Not Electing Redemption Our amended and restated certificate of incorporation Each such remaining share of the Class A Our No Manner of Conducting Redemptions We will provide our public stockholders with the opportunity to have all or a portion of their shares of Class A not have discretion as to whether to seek a stockholder vote to approve the proposed business combination. We intend to conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval is required by law or stock exchange listing requirements or we choose to seek stockholder approval for business or other legal reasons. So long as we obtain If a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation:
conduct the redemptions pursuant to Rule13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and
file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about our initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. Upon the public announcement of our business combination, we or our In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number of the shares of our Class A If, however, stockholder approval of the transaction is required by law or stock exchange listing requirement, or we decide to obtain stockholder approval for business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation:
conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and
file proxy materials with the SEC. In the event that we seek stockholder approval of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our public stockholders with the redemption rights described above upon completion of our initial business combination. If we seek stockholder approval, we will complete our initial business combination only if a majority of combination. For purposes of seeking approval of the majority of Our amended and restated certificate of incorporation Limitation on Redemption upon Completion of Notwithstanding the foregoing, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation threaten to exercise its redemption rights if such holder’s shares are not purchased by us or our management at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders’ ability to redeem no more than 15% of the shares issued in this offering (except as otherwise permitted by our board of directors), we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, our amended and restated certificate of incorporation does not restrict our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our business combination. Tendering Stock Certificates in Connection with a Tender Offer or Redemption Rights We may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed to such holders, or up to two business days prior to the vote on the proposal to approve the business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option. The tender offer or proxy materials, as applicable, that we will furnish to our public stockholders in connection with our initial business combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements. Accordingly, a public stockholder would have from the time we send out our tender offer materials until the close of the tender offer period, or up to two days prior to the vote on the business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights. Given the relatively short exercise period, it is advisable for public stockholders to use electronic delivery of their shares of Class A There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically charge the tendering broker $80.00 and it would be up to the broker whether or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights to tender their shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated. The foregoing is different from the procedures used by many blank check companies. In order to perfect redemption rights in connection with their business combinations, many blank check companies would distribute proxy materials for the stockholders’ vote on our initial business combination, and a holder could simply vote against a proposed business combination and check a box on the proxy card indicating such holder was seeking to exercise his or her redemption rights. After the business combination was approved, we would contact such stockholder to arrange for him or her to deliver his or her certificate to verify ownership. As a result, the stockholder then had an “option window” after the completion of the business combination during which he or she could monitor the price of 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 stockholders were aware they needed to commit before the stockholder meeting, would become “option” rights surviving past the completion of the business combination until the redeeming holder delivered its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming holder’s election to redeem is irrevocable once the business combination is approved. Any request to redeem such shares, once made, may be withdrawn at any time up to the date set forth in the tender offer materials or the date of the stockholder meeting set forth in our proxy materials, as applicable. Furthermore, if a holder of a share of Class A It is anticipated that the funds to be distributed to holders of the shares of our Class A If our initial business combination is not approved or completed for any reason, then our public stockholders who elected to exercise their redemption rights would not be entitled to redeem their shares for the applicable pro-rata share of the trust account. In such case, we will promptly return any certificates delivered by public holders who elected to redeem their shares. If our initial proposed business combination is not completed, we may continue to try to complete a business combination with a different target until 24 months from the closing of this offering (or 30 months from the closing of this offering if we have executed a letter of intent, agreement in principle or definitive agreement for our initial business combination within 24 months from the closing of this offering but have not completed our initial business combination within such Redemption of Class A Common Stock and Liquidation if Our amended and restated certificate of incorporation The holders of our Class B Our redeem the shares of our Class A We expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the approximately If we were to expend all of the net proceeds of this offering and the sale of the Although we will seek to have all vendors, service providers (other than our independent auditors), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest and claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account, including but not limited, to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative. Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Our 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, then our not be able to complete our initial business combination, and you would receive such lesser amount per share in connection with any redemption of your shares of the Class A In the event that the proceeds in the trust account are reduced below (i) $20.00 per share of Class A We will seek to reduce the possibility that our Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro-rata portion of our trust account distributed to our public stockholders upon the redemption of the shares of our Class A stockholder’s pro-rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred with respect to claims commenced after the third anniversary of the dissolution. Furthermore, if the pro-rata portion of our trust account distributed to our public stockholders upon the redemption of their shares of Class A legal proceedings that a party may bring due to other circumstances that are currently unknown), then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. Unlike in the case of claims against stockholders relating to an unlawful liquidating distribution, however, stockholders are only liable for an unlawful redemption distribution if they knew that the redemption distribution was unlawful. If we are unable to complete our business combination within 24 months (or 30 months, as applicable) from the closing of this offering, we will: (i) cease all operations except for the purpose of winding Because we will not be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time, that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the subsequent 10 years. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. As described above, pursuant to the obligation contained in our underwriting agreement, we will seek to have all vendors, service providers (other than our independent auditors), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account. As a result of this obligation, the claims that could be made against us are significantly limited and the likelihood that any claim that would result in any liability extending to the trust account is remote. Further, our If we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to return $20.00 per share to our public stockholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our stockholders. Furthermore, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, thereby exposing itself and our company to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons. Our public stockholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (i) the completion of our initial business Comparison of Redemption or Purchase Prices in Connection With Our Initial Business Combination and If We Fail to Complete Our Initial Business Combination. The following table compares the redemptions and other permitted purchases of the shares of our Class A
Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419 The following table compares the terms of this offering to the terms of an offering by a blank check company subject to the provisions of Rule 419. This comparison assumes that the gross proceeds, underwriting commissions and underwriting expenses of our offering would be identical to those of an offering undertaken by a company subject to Rule
Competition In identifying, evaluating and selecting a target business for our business combination, we may encounter intense competition from other entities having a business objective similar to ours, including other blank check companies, private equity fund sponsors and leveraged buyout funds, and operating businesses seeking strategic acquisitions. Furthermore, our obligation to pay cash in connection with our public stockholders who exercise their redemption rights may reduce the resources available to us for our initial business combination and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating our initial business combination. Facilities Our offices are at 787 Eleventh Avenue, 9th Floor, New York, NY 10019 and our telephone number is (212)813-3700. We consider our current office space adequate for our current operations. We do not expect to lease alternative office space from an unaffiliated third party prior to consummation of this offering. Employees We currently have two officers. Members of our affairs until we have completed our initial business combination. In addition, we have an Investment Team comprised of seven members, who are employed by PSCM. We believe our Investment Team will be able to allocate their duties to us and to PSCM amongst themselves in a manner that allows them to provide us with the resources and support we require while fulfilling their responsibilities to PSCM. The amount of time that any such person will devote in any time period will vary based on whether a target business has been selected for our initial business combination and the current stage of the business combination process. Periodic Reporting and Financial Information We will register our units, Class A We will provide stockholders with audited financial statements of the prospective target business as part of the tender offer materials or proxy solicitation materials sent to stockholders to assist them in assessing the target business. In all likelihood, these financial statements will need to be prepared in accordance with GAAP. We cannot assure you that any particular target business identified by us as a potential acquisition candidate will have financial statements prepared in accordance with GAAP or that the potential target business will be able to prepare its financial statements in accordance with GAAP. To the extent that this requirement cannot be met, we may not be able to acquire the proposed target business. While this may limit the pool of potential acquisition candidates, we do not believe that this limitation will be material. We will be required to evaluate our internal control procedures for the fiscal year ending December 31, 2021 as required by the Sarbanes-Oxley Act. Only in the event we are deemed to be a large accelerated filer or an accelerated filer will we be required to have our internal control procedures audited. A target company may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition. Legal Proceedings There is no material litigation, arbitration or governmental proceeding currently pending against us or any members of our Management Team Our officers, directors and director nominees are as follows:
Our Officers William Ackman serves as our Chairman and Chief Executive Officer. Mr. Ackman founded Pershing Square in 2003, and is principally responsible for its investment policies and implementation. Mr. Ackman has spent 28 years in the investment management industry. Prior to forming Pershing Square, heco-founded Gotham Partners Management Co., LLC, an investment adviser that managed public and private equity and hedge fund portfolios. Mr. Ackman is currently Chairman of the Board of the Howard Hughes Corporation, and a member of the Investment Advisory Committee of the Federal Reserve Bank of NY. Mr. Ackman received his Bachelor of Arts degree from Harvard College, where he graduated magna cum laude, and received his Masters in Business Administration from Harvard Business School. Ben Hakim serves as our Chief Financial Officer. Mr. Hakim is a Partner at Pershing Square and joined the Our Independent Director Nominees Lisa Gersh co-founded Oxygen Media (“Oxygen”) in 1999 and remained its President and Chief Operating Officer until the company’s sale to NBC in 2007 for $925 million. Oxygen was the Michael Ovitzco-founded Creative Artists Agency (CAA) in 1974 and served as its Chairman until 1995. Over that20-year period, he grew the agency from astart-up organization to the world’s leading talent agency, representing more than 1,000 of the most notable actors, directors, musicians, screenwriters and other personalities in the entertainment industry including Martin Scorsese, Sean Connery, Robert Redford, Paul Newman, Robert DeNiro, Al Pacino, Bill Murray, Dustin Hoffman, Steven Spielberg, David Letterman, Meryl Streep, Barbara Streisand, Michael Crichton and Michael Jackson. In his journey from the mailroom to media mogul, Mr. Ovitz launched the most powerful agency in the world (to date), sold three major Hollywood studios, executed all marketing and advertising for The Coca-Cola Company (including creating the Polar Bear Campaign) and was at the forefront of the digital revolution, making alliances with Intel Corporation and other early Silicon Valley companies. Mr. Ovitz also served as President of the Walt Disney Company, from October 1995 to January 1997. In 2010, Mr. Ovitz founded the venture capital fund Broad Beach Ventures LLC, a portfolio of over thirty companies. He has been a senior advisor to Palantir Technologies for over 10 years and has invested in and advised companies from startups to black swans. He was instrumental in the creation of venture capital firm Andreessen Horowitz and frequently consults for Founders Fund, 8VC and many other firms. In 2018, Mr. Ovitz wrote and published his memoirWho Is Michael Ovitz?, which was on the long list for The Financial Times and McKinsey Business Book of the Year Award. Mr. Ovitz is a graduate of University of California, Los Angeles, and helped rebuild the UCLA Medical Center in 1997 while serving as its Chairman for over a decade. Mr. Ovitz is also a notable art collector and serves on The Board of Trustees at The Museum of Modern Art in New York City. We believe Mr. Ovitz is qualified to serve on our board of directors due to his extensive experience investing in and leading businesses, serving as an officer and board member of several companies, as well as his vast network of relationships. Jacqueline D. Reses serves as the Head of Square Capital, LLC, a wholly owned subsidiary of Square, Inc. (“Square”), which focuses on facilitating small business credit to businesses which have been Joseph S. Steinberg is Chairman of the Board of Directors of Jefferies Financial Group Inc., and, from January 1979 until March 1, 2013, served as President of Leucadia National Corporation (now Jefferies Financial Group Inc.). He has also been a director of Jefferies Group since 2008, Crimson Wine Group since 2013 and served as a director of HomeFed Corporation from August 1998 and Chairman of the Board from December 1999 until its acquisition by Number and Terms of Office of Directors and Officers We intend to have Our officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized to appoint persons to the offices set forth in our bylaws as it deems appropriate. Our bylaws provide that our officers may consist of a Chairman of the Board, Chief Executive Officer, President, Chief Financial Officer, Vice Presidents, Secretary, Treasurer and such other offices as may be determined by the board of directors. Director Independence The NYSE listing standards require that a majority of our board of directors be independent. An “independent director” is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion of our board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. Our board of directors has determined that Mses. Gersh and Reses and Messrs. Ovitz and Steinberg will be “independent directors” as defined in the NYSE listing standards and applicable SEC rules. Our independent directors will have regularly scheduled meetings at which only independent directors are present. Director and Officer Compensation None of our directors or officers has received any cash compensation for services rendered to us. No compensation of any kind, including finder’s and consulting fees, will be paid to our After the completion of our initial business combination, directors or members of our We do not intend to take any action to ensure that members of our Committees of the Board of Directors Our board of directors will have three standing committees: an audit committee, a compensation committee, and a nominating and Audit Committee Prior to the consummation of this offering, we will establish an audit committee of the board of directors. Under the NYSE listing standards and applicable SEC rules, we are required to have at least three members of the audit committee, all of whom must be independent. Each member of the audit committee is financially literate and our board of directors has determined that We will adopt an audit committee charter, which will detail the principal functions of the audit committee, including:
the appointment, compensation, retention, replacement, and oversight of the work of the independent auditors and any other independent registered public accounting firm engaged by us;
pre-approving all audit and permittednon-audit services to be provided by the independent auditors or any other registered public accounting firm engaged by us, and establishingpre-approval policies and procedures;
reviewing and discussing with the independent auditors all relationships the auditors have with us in order to evaluate their continued independence;
setting clear hiring policies for employees or former employees of the independent auditors;
setting clear policies for audit partner rotation in compliance with applicable laws and regulations;
obtaining and reviewing a report, at least annually, from the independent auditors describing (i) the independent auditor’s internal quality-control procedures and (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues;
reviewing and approving any
reviewing with management, the independent auditors, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities. Compensation Committee Prior to the consummation of this offering, we will establish a compensation committee of the board of directors. members of the compensation committee, all of whom must be independent. We will adopt a compensation committee charter, which will detail the principal functions of the compensation committee, including:
reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation;
reviewing and approving on an annual basis the compensation of all of our other officers;
reviewing on an annual basis our executive compensation policies and plans;
implementing and administering our incentive compensation equity-based remuneration plans;
assisting management in complying with our proxy statement and annual report disclosure requirements;
approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees;
if required, producing a report on executive compensation to be included in our annual proxy statement; and
reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors. Notwithstanding the foregoing, as indicated above, other than reimbursement of expenses, no compensation of any kind, including finders, consulting or other similar fees, will be paid to any of our current stockholders, officers, directors or any of their respective affiliates, prior to, or for any services they render in order to effectuate the consummation of a business combination. Accordingly, it is likely that prior to the consummation of our initial business combination, the compensation committee will only be responsible for the review and recommendation of any compensation arrangements to be entered into in connection with such initial business combination. The charter will also provide that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by the NYSE and the SEC. Nominating and Upon the effectiveness of the registration statement of which this prospectus forms a part, we will establish a nominating and The primary purposes of our nominating and corporate governance committee will be to assist the board in:
identifying, screening and reviewing individuals qualified to serve as directors and recommending to the board of directors candidates for nomination for election at the annual meeting of stockholders or to fill vacancies on the board of directors; developing and recommending to the board of directors and overseeing implementation of our corporate governance guidelines;
coordinating and overseeing the annual self-evaluation of the board of directors, its committees, individual directors and management in the governance of the company; and reviewing on a regular basis our overall corporate governance and recommending improvements as and when necessary. The nominating and Director Nominations Our nominating and Compensation Committee Interlocks and Insider Participation None of our officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee of any entity that has one or more officers serving on our board of directors. Code of Ethics Prior to the consummation of this offering, we will have adopted a Code of Ethics applicable to our directors, officers and employees. We will file a copy of our Code of Ethics and our audit and compensation committee charters as exhibits to the registration statement of which this prospectus is a part. You will be able to review these documents by accessing our public filings at the SEC’s web site at www.sec.gov. In addition, a copy of the Code of Ethics will be provided without charge upon request from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form8-K. See the section of this prospectus entitled “Where You Can Find Additional Information.” Conflicts of Interest Our PSCM and its affiliates (including our
Each of our directors, director nominees and officers currently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present business combination opportunities to such entity. Our officers, in their capacities as officers, partners or managing directors of our Sponsor or its affiliates, may be required to present potential business combinations to the related entities described above, current or future investment vehicles of our Sponsor before they present such opportunities to us. Accordingly, in the future, if any of our directors or officers becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to such entity. Any presentation of such opportunities to entities other than us, or affiliates of our Sponsor, may present additional conflicts. Although the current and future fiduciary duties or contractual obligations of our directors or officers could materially undermine our ability to complete our business combination, we believe this risk is partly mitigated for the following reasons. As stated above, our Sponsor and its affiliates currently do not make, or are not permitted to make, investments in private companies. Further, each of our directors, director nominees and officers has agreed not to become a director or officer of any other special purpose acquisition company (other than, in the case of Ms. Reses, with respect to the special purpose acquisition company at which she currently serves as a director) with a class of securities registered under the Securities Exchange Act of 1934, as amended Potential investors should also be aware of the following other potential conflicts of interest:
None of the members of our
In the course of their other business activities, our directors and officers may become aware of investment and business opportunities which may be appropriate for presentation to us, as well as the other entities with which they are affiliated. Our management may have conflicts of interest in determining to which entity a particular business opportunity should be presented. Our
Our directors and officers may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such directors and officers was included by a target business as a condition to any agreement with respect to our initial business combination. Our The conflicts described above may not be resolved in our favor. In general, directors and officers of a corporation incorporated under the laws of the State of Delaware are required to present business opportunities to a corporation if:
the corporation could financially undertake the opportunity;
the opportunity is within the corporation’s line of business; and
it would not be fair to our company and its stockholders for the opportunity not to be brought to the attention of the corporation. Accordingly, as a result of multiple business affiliations, our directors and officers may have similar legal obligations relating to presenting business opportunities meeting the above-listed criteria to multiple entities. Furthermore, our amended and restated certificate of incorporation We are not prohibited from pursuing our initial business combination with a company that is affiliated with our In the event that we submit our initial business combination to our public stockholders for a vote, our Limitation on Liability and Indemnification of Directors and Officers Our amended and restated certificate of incorporation We will enter into agreements with our directors and officers to provide contractual indemnification in addition to the indemnification provided for in our amended and restated certificate of incorporation. Our bylaws also will permit us to secure insurance on behalf of any officer, director or employee for any liability arising out of his or her actions, regardless of whether Delaware law would permit such indemnification. We will purchase a directors’ and officers’ liability insurance that insures our directors and officers against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our directors and officers. These provisions may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions. We believe that these provisions, the directors’ and officers’ liability insurance and the indemnity agreements are necessary to attract and retain talented and experienced directors and officers. The following
each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock;
each of our directors and executive officers upon completion of this offering who beneficially owns shares of our common stock; and
all our directors and executive officers upon completion of this offering as a group.
The following We have also presented, The address of each of the persons below is 787 Eleventh Avenue, 9th Floor, New York, New York 10019.
The Forward Purchasers and Director Forward Purchasers are obligated to purchase, respectively, 50,000,000 and 300,000 Forward Purchase Units, and may purchase such amount, in part or in whole, at any time prior to or simultaneously with the consummation of our initial business combination. The following table presents, for illustrative purposes only, the beneficial ownership following this offering of the persons below if (i) no Forward Purchase Units have yet been issued, and (ii) if the Committed Forward Purchase Units and Director Forward Purchase Units have been issued, but no Additional Forward Purchase Units have been issued.
Immediately after this offering, Our Our Restrictions on Transfers of Shares of Class B Common Stock The shares of Class B Restrictions on Transfers of Sponsor The Restrictions on Transfers of Director Warrants The Restrictions on Transfers of Forward Purchase Securities The The Forward Purchase Shares and Forward Purchase Warrants comprising the Forward Purchase Units shall not be separately transferable until 180 days after the completion of the initial business combination, except in the event that a Forward Purchase Warrant has been exercised prior to such date, in which case the shares of Class A Common Stock issued upon such exercise and the Forward Purchase Share included in the Forward Purchase Unit of which such Forward Purchase Warrant was a part may be transferred separately, subject to the restrictions described herein. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS On May 7, 2020, our We have entered into a The Prior to or concurrently with this offering, we will enter into a Director Forward Purchase Agreement with certain of our independent directors. The forward purchase directors have agreed to purchase, in one or more private placements in such amounts and at such time or times as each forward purchase director determines, but no later than simultaneously with the closing of our initial business combination, an aggregate of $6,000,000 of Forward Purchase Units. The forward purchase directors have agreed to purchase the following amounts of Forward Purchase Units: Mr. Ovitz, $5,000,000, and Ms. Reses, $1,000,000. The forward purchase directors may not transfer their obligation to purchase such Forward Purchase Units, other than to our Sponsor, other directors and Affiliate Transferees. Such Forward Purchase Securities will be subject to certain transfer restrictions and have certain registration rights, as described herein. The proceeds of purchases provisions relating solely to the transfer of Forward Purchase Securities. The Our Concurrently with this offering, our We determined the value of the Sponsor Warrants using the Black-Scholes option pricing model, subject to additional valuation adjustments due to the risk of not consummating a transaction, the warrants’ three-year restriction on sale, transfer, and exercisability, and certain other factors described herein.
The Sponsor Warrants will The Sponsor Warrants will not be redeemable by us (other than as may be required in connection with a merger where the holders receive consideration other than common stock) and will be exercisable, in whole or in part, on a cashless basis (in addition to being exercisable for cash) beginning three years after the consummation of our initial business combination. The Each of our directors, other than Mr. Ackman, Of the The purchases of the Until Concurrently with this offering, we will enter into a Registration Rights Agreement with our Sponsor, the Forward Purchasers and our independent directors, pursuant to which we will be required to use commercially reasonable efforts to file a registration statement within 120 days of our initial business combination, and use our best efforts to cause such registration statement to be declared effective as soon as practicable (but in no event later than 60 days) thereafter, providing for the resale, under Rule 415 of the Securities Act, of (i) the Sponsor Warrants, (ii) the Director Warrants, (iii) the shares issuable upon the exercise of the Sponsor Warrants or Director Warrants, (iv) the Forward Purchase Securities, (v) the shares of Class A Common Stock issuable upon conversion of our Class B Common Stock and (vi) any other shares or warrants of the company that the parties to the Registration Rights Agreement have purchased on the open market, subject to certain conditions as provided in the Registration Rights Agreement. The parties to the Registration Rights Agreement, and their permitted transferees, will be entitled to make up to 10 demands that we register the foregoing securities, and will have certain “piggyback rights” with respect to other registration statements filed by the company. The post-combination business will bear the cost of registering these securities. As more fully discussed in the section of this prospectus entitled “Management—Conflicts of Interest,” if any of our directors or officers becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has then-current fiduciary or contractual obligations, including our PSCM has agreed to provide us office space and general administrative services at no cost. No compensation of any kind, including finder’s and consulting fees, will be paid to our businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made to our Our In addition, in order to finance transaction costs in connection with an intended initial business combination, our After our initial business combination, members of our
Related Party Policy We have not yet adopted a formal policy for the review, approval or ratification of related party transactions. Accordingly, the transactions discussed above were not reviewed, approved or ratified in accordance with any such policy. Prior to the consummation of this offering, we will adopt a code of ethics requiring us to avoid, wherever possible, all conflicts of interests, except under guidelines or resolutions approved by our board of directors (or the appropriate committee of our board) or as disclosed in our public filings with the SEC. Under our code of ethics, conflict of interest situations will include any financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) involving the company. A form of the code of ethics that we plan to adopt prior to the consummation of this offering is filed as an exhibit to the registration statement of which this prospectus is a part. In addition, our audit committee, pursuant to a written charter that we will adopt prior to the consummation of this offering, will be responsible for reviewing and approving related party transactions to the extent that we enter into such transactions. An affirmative vote of a majority of the members of the audit committee present at a meeting at which a quorum is present will be required in order to approve a related party transaction. A majority of the members of the entire audit committee will constitute a quorum. Without a meeting, the unanimous written consent of all of the members of the audit committee will be required to approve a related party transaction. A form of the audit committee charter that we plan to adopt prior to the consummation of this offering is filed as an exhibit to the registration statement of which this prospectus is a part. We also require each of our directors, director nominees and officers to complete a directors’ and officers’ questionnaire that elicits information about related party transactions. These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the part of a director, employee or officer. PSCM and its affiliates (including our We do not believe that PSCM and its affiliates’ activities present significant conflicts of interest with respect to our pursuit of an acquisition target because we intend that our acquisition target will be a privately owned company, and the To further minimize conflicts of interest, we have agreed not to consummate our initial business combination with an entity that is affiliated with any of our
Repayment of up to $1,500,000 (plus accrued interest) in loans made to us by our Reimbursement for anyout-of-pocket expenses related to identifying, investigating and completing our initial business combination; and
Repayment of any other loans which may be made by our Our audit committee will review on a quarterly basis all payments that were made to our Pursuant to our amended and restated certificate of incorporation, our authorized capital stock will consist of 3,000,000,000 shares of Class A Units Each unit has an offering price of $20.00 and consists of one whole share of Class A The Class A The contingent right to receive In no event will the Class A Common Stock Upon the closing of this offering,
100 shares of Class B Each share of Class B offering. Holders of the Class A votes carried by each share of Class B Our amended and restated certificate of incorporation authorizes the issuance of up to 3,000,000,000 shares of Class A In accordance with the NYSE corporate governance requirements, we are not required to hold an annual meeting until one year after our first fiscal year end following our listing on the NYSE. Under Section 211(b) of the DGCL, we are, however, required to hold an annual meeting of stockholders for the purposes of electing directors in accordance with our bylaws, unless such election is made by written consent in lieu of such a meeting. We may not hold an annual meeting of stockholders to elect new directors prior to the consummation of our initial business combination, and thus we may not be in compliance with Section 211(b) of the DGCL, which requires an annual meeting. Therefore, if our stockholders want us to hold an annual meeting prior to the consummation of our initial business combination, they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of the DGCL. We will provide our public stockholders with the opportunity to have all or a portion of their shares of Class A Unlike many blank check companies that hold stockholder votes and conduct proxy solicitations in conjunction with their initial business combinations and provide for related redemptions of the shares of Class A If, however, stockholder approval of the transaction is required by law, or we decide to obtain stockholder approval for business or other legal reasons, we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If we seek stockholder approval, we will complete our initial business combination only if a majority of the voting power of the outstanding shares of common stock voted are voted in favor of the business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of our outstanding capital stock representing a majority of the voting power of all outstanding shares of capital stock entitled to vote at such meeting. However, the participation of our If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation If we seek stockholder approval in connection with our business combination, our Pursuant to our amended and restated certificate of incorporation, if we are unable to complete our business combination within 24 months (or 30 months, as applicable) from the closing of this offering, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. The holders of our Class B In the event of a liquidation, dissolution or winding up of the company after a business combination, our stockholders are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of stock, if any, having preference over the common stock. Our stockholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the common stock, except that we will provide our public stockholders with the opportunity to have all or a portion of their shares of the Class A Class B Common Stock Our Class B Because the voting power held by each share of Class B Common Stock will not be adjusted following this offering, upon the issuance of any Forward Purchase Units, the Class B Common Stock will have, in the aggregate, less than 20.0% of the voting power of the then-issued and In the event of any subdivision (by stock split, subdivision, exchange, stock dividend, reclassification, recapitalization or otherwise) or combination (by reverse stock split, exchange, reclassification, recapitalization or otherwise) or similar reclassification or recapitalization of the outstanding shares of Class A Our substance or timing of our obligation to allow redemptions in connection with our initial business combination, (y) to modify the substance or timing of our obligation to redeem 100% of the shares of The holders of our Class B
The shares of Class B Preferred Stock Our amended and restated certificate of incorporation Contingent Right We refer to the right attached to each share of Class A Redeemable Warrants Our Our amended and restated certificate of incorporation The The Redeemable Warrants and the Forward Purchase Warrants will have identical terms in all respects, except that the Each whole redeemable warrant entitles the registered holder to purchase one whole share of our Class A We will not be obligated to deliver any shares of Class A We have agreed that as soon as practicable, but in no event later than 15 business days, after the closing of our initial business combination, we will use our best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the shares of Class A Redemption of warrants when the price per share of our Class A
in whole and not in part;
at a price of $0.01 per warrant;
upon a minimum of 30 days’ prior written notice of redemption to each
if, and only if, the We will not redeem the warrants as described above unless (i) a registration statement under the Securities Act covering the issuance of the shares of Class A If we elect to require any holder wishing to exercise their warrants to do so on a cashless basis, each holder would pay the exercise price by surrendering the warrants for that number of Class A underlying the warrants, multiplied by the excess of the “fair market value” (defined below) less the exercise price of the warrants by (y) the fair market value and (B) We have established the last of the redemption criteria discussed above to prevent a redemption call unless there is at the time of the call a significant premium to the redeemable warrant exercise price. If the foregoing conditions are satisfied and we issue a notice of redemption of the Redemption of warrants when the price per share of Class A
in whole and not in part;
at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption; provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the table below, based on the redemption date and the “fair market value” of our Class A if, and only if, the Beginning on the date the notice of redemption is given until the warrants are redeemed or exercised, holders may elect to exercise their warrants on a cashless basis. The numbers in the table below represent the number of shares of our Class A Pursuant to the warrant agreement, references above to shares of our Class A
The stock prices set forth in the column headings of the table redeemable warrant is adjusted, the adjusted stock prices in the column headings will equal the stock prices immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the number of shares deliverable upon exercise of a redeemable warrant immediately prior to such adjustment and the denominator of which is the number of shares deliverable upon exercise of a redeemable warrant as so adjusted. The number of shares in the table The exact fair market value and redemption date may not be set forth in the table above, in which case, if the fair market value is between two values in the table or the redemption date is between two redemption dates in the table, the number of shares of our Class A whole redeemable warrant. For an example where the exact fair market value and redemption date are not as set forth in the table above, if the average of the daily volume-weighted average This redemption feature is structured to allow for all of the outstanding As stated above, we can redeem the No fractional shares of Class A Redemption procedures. A holder of a warrant may notify us in writing in the event it elects to be subject to a requirement that such holder will not have the right to exercise such warrant, to the extent that after giving effect to such exercise, such person (together with such person’s affiliates), to the warrant agent’s actual knowledge, would beneficially own in excess of 9.8% (or such other amount as a holder may specify) of the shares of Class A Anti-dilution Adjustments. If the number of outstanding shares of Class A In addition, if we, at any time while the
If the number of outstanding shares of our Class A Whenever the number of shares of Class A In addition, if (x) we issue additional shares of Class A In case of any reclassification or reorganization of the outstanding shares of Class A in such consolidation or merger that affirmatively make such election, and if a tender, exchange or redemption offer has been made to and accepted by such holders (other than a tender, exchange or redemption offer made by us in connection with redemption rights held by our stockholders as provided for in common stock in the successor entity that is listed for trading on a national securities exchange or is quoted in an establishedover-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the registered holder of the redeemable warrant properly exercises the redeemable warrant within thirty days following public disclosure of such transaction, the warrant exercise price will be reduced as specified in the warrant agreement based on the Black-Scholes value (as defined in the warrant agreement) of the redeemable warrant. The purpose of such exercise price reduction is to provide additional value to holders of the The The No fractional shares will be issued upon exercise of the Forward Purchase Units We have entered into a The The obligation of each Prior to or concurrently with this offering, we will enter into a Director Forward Purchase Agreement with certain of our independent directors. The forward purchase directors have agreed to purchase, in one or more private placements in such amounts and at such time or times as each forward purchase director determines, but no later than simultaneously with the closing of our initial business combination, an aggregate of $6,000,000 of Forward Purchase Units. The forward purchase directors have agreed to purchase the following amounts of Forward Purchase Units: Mr. Ovitz, $5,000,000, and Ms. Reses, $1,000,000. The forward purchase directors may not transfer their obligation to purchase such Forward Purchase Units, other than to our Sponsor, other directors and Affiliate Transferees. Such Forward Purchase Securities will be subject to certain transfer restrictions and have certain registration rights, as described herein. The proceeds of purchases The Forward Purchase Unit of which such Forward Purchase Warrant was a part may be transferred separately, subject to the restrictions described herein. The Forward Purchasers and forward As long as the Forward Purchase Securities
Forward Purchase Warrants The
Forward Purchase Shares The Sponsor Concurrently with this offering, our The The permitted transferees and any holders of the Sponsor Warrants or the shares issuable upon exercise of the Sponsor Warrants certain registration rights, as provided in the Registration Rights Agreement, which will permit such securities to be sold on the public market when the lock-up period ends, three years after the date on which we consummate our initial business combination. If We do not plan to make future adjustments to the terms of the Sponsor Warrants. As provided in the Sponsor Warrant agreement, the exercise price of the Sponsor Warrants and the number of shares issuable pursuant to the Sponsor Warrants are subject to adjustment upon certain events, including: stock dividends or stock-splits; dividends or distributions; aggregations, consolidations or reverse stock-splits; the issuance of additional shares for capital-raising purposes in connection with the initial business combination at an issue price of less than $18.40; reorganizations, mergers, tender offers and exchange offers; rights offerings at a below-market price; tender offers or exchange offers by the company at a premium to market; and other events that require an adjustment to the terms of the Sponsor Warrants to avoid an adverse economic impact on the Sponsor Warrants and to effectuate the purpose of the Sponsor Warrants adjustment provisions contained in the Sponsor Warrant agreement. In the event of a spin-off, the Sponsor Warrants will be split in two (one for the company and one for the spun-off entity). If the company is a party to a merger or similar transaction after the initial business combination, the Sponsor Warrants will become exercisable for the consideration the holder would have received if it had exercised the Sponsor Warrants immediately before the closing of that transaction. If the company is a party to a merger or similar transaction where the holders of common stock receive consideration other than common stock of the surviving company, the holder of such Sponsor Warrants may require the company to repurchase all or a portion of such holder’s Sponsor Warrants for their then-current value, as determined by independent appraisers, using the Agreed Model under the ISDA definitions. Valuation of Sponsor Warrants We determined the value of the Sponsor Warrants using the Black-Scholes option pricing model, subject to additional valuation adjustments due to the risk of not consummating a transaction, the warrants’ three-year restriction on sale, transfer, and exercisability, and certain other factors described further below. The assumptions used in the Black-Scholes valuation include a spot price equal to the initial offering price of $20.00, an exercise price of $24.00, and a risk-free rate consistent with the Sponsor Warrants’ term. The volatility of the post-combination company was estimated by observing a range of historical and implied long-term volatilities for large-capitalization companies which meet our acquisition criteria. Companies in the Pershing Square Funds’ current portfolio which meet our criteria were considered in estimating the post-combination business’s long-term volatility. The valuation assumed that the post-combination business would pay no dividends, and that the Sponsor Warrants would remain outstanding for their entire term. The valuation assumed that the Sponsor Warrants would not be extinguished for cash in a sale or merger, and would not be subject to dilution or impairment in value due to stock splits, stock dividends, cash dividends and other distributions, self-tenders by the company at a premium to market price, rights offerings, at a below-market price, spin-offs, or certain equity issuances in connection with the initial business combination at prices below $18.40 per share. For purposes of the valuation, the number of shares issuable upon exercise of the Sponsor Warrants was determined by applying the 5.95% fully diluted post-combination ownership to a range of company equity market capitalizations at the time of the initial business combination. The range of equity values of the initial business combination was based on a study of the historical relationship between the amount of net capital raised by blank check companies and the equity value of their eventual merger targets. For the purpose of this analysis, capital raised in these precedent blank check company IPOs was reduced for stockholder redemptions and increased by funds raised from Forward Purchase Agreements, private investment in public equity capital, and other forms of equity capital raised at the time of their initial business combinations. We adjusted the value of the Sponsor Warrants by a factor which took into account that the probability of consummating an initial business combination by our dissolution deadline was less than 100%. To inform this probability, the company conducted a study of historical blank check company transaction consummation and liquidation rates, and made adjustments to these historical precedents to reflect our unprecedented and substantially larger size, and the resulting smaller universe of potential targets available to merge with the company relative to typical blank check companies. The company also adjusted the valuation of the Sponsor Warrants by an illiquidity discount. To inform this illiquidity discount, the company used a discount for lack of marketability (“DLOM”) analysis to account for the Sponsor Warrants’ three-year restriction on sale, transfers, and exercise, as well as an estimate of the range of time frames necessary to search for, negotiate and complete due diligence on potential target businesses in advance of the eventual initial business combination. After considering all of the above factors, the Company estimated the value of the Sponsor Warrants, and rounded this value up to the nearest million dollars to arrive at the $65,000,000 purchase price. The nature of the valuation process used to value the Sponsor Warrants is inherently uncertain and imprecise. The Sponsor Warrants’ price and terms were not determined by a negotiation between arm’s-length third parties, which, had it occurred, may have resulted in a higher or lower valuation and more or less favorable terms. Although we do not know what prices and terms would have resulted from a negotiation between arm’s-length third parties, we believe that the $65,000,000 purchase price of the Sponsor Warrants reflects fair market value. Director Warrants Each of our directors, other than Mr. Ackman, The Dividends We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of a business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial conditions subsequent to completion of a business combination. The payment of any cash dividends subsequent to a business combination will be within the discretion of our board of directors at such time. Further, if we incur any indebtedness, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith. Our amended and restated certificate of incorporation Our Transfer Agent and Warrant Agent The transfer agent for our common stock and warrant agent for our warrants is Continental Stock Transfer & Trust Company. We have agreed to indemnify Continental Stock Transfer & Trust Company in its roles as transfer agent and warrant agent, its agents and each of its stockholders, directors, officers and employees against all claims and losses that may arise out of acts performed or omitted for its activities in that capacity, except for any liability due to any gross negligence, willful misconduct or bad faith of the indemnified person or entity. Our Amended and Restated Certificate of Incorporation Our amended and restated certificate of incorporation
We will not effectuate our initial business combination with another blank check company or a similar company with nominal operations. In addition, our amended and restated certificate of incorporation Certain Anti-Takeover Provisions of Delaware Law and our Amended and Restated Certificate of Incorporation and Bylaws We
prior to such time, our board of directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;
upon consummation of the transaction which resulted in the stockholder becoming an “interested stockholder,” the interested stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced (excluding certain shares); or on or subsequent to such time, the business combination is approved by the Board and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at leasttwo-thirds of the outstanding voting stock not owned by the interested stockholder. Generally, a “business combination” includes a merger, asset or stock sale or other transaction resulting in a financial benefit to the interested stockholder. Subject to certain exceptions, an “interested stockholder” is a person who, together with that person’s affiliates and associates, owns, or within the previous three years owned, 15% or more of our voting stock. Under some circumstances, this provision will make it more difficult for a person who is an interested stockholder to effect various business combinations with us for a three-year period. We will take all necessary corporate action to ensure that our Our authorized but unissued common stock and preferred stock are available for future issuances without stockholder approval and could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved common stock and preferred stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise. Provisions in our amended and restated certificate of incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A Our amended and restated certificate of incorporation include the ability of the board of directors to designate the terms of and issue new series of preferred shares, which may make the removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities. Exclusive Forum Provisions Our amended and restated certificate of incorporation Although we believe these provisions benefit us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, a court may determine that these provisions are unenforceable, and to the extent they are enforceable, the provisions may have the effect of discouraging lawsuits against our directors and officers, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder. Special meeting of stockholders Our bylaws provide that special meetings of our stockholders may be called only by Advance notice requirements for stockholder proposals and director nominations Our bylaws provide that stockholders seeking to bring business before our annual meeting of stockholders, or to nominate candidates for election as directors at our annual meeting of stockholders, must provide timely notice of their intent in writing. To be timely, a stockholder’s notice will need to be received by the company secretary at our principal executive offices not later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the anniversary date of the immediately preceding annual meeting of stockholders. Pursuant to Rule14a-8 of the Exchange Act, proposals seeking inclusion in our annual proxy statement must comply with the notice periods contained therein. Our bylaws also specify certain requirements as to the form and content of a stockholders’ meeting. These provisions may preclude our stockholders from bringing matters before our annual meeting of stockholders or from making nominations for directors at our annual meeting of stockholders. Action by written consent Subsequent to the consummation of the offering, any action required or permitted to be taken by our common stockholders must be effected by a duly called annual or special meeting of such stockholders and may not be effected by written consent of the stockholders, other than with respect to our Class B Board of Directors Our amended and restated certificate of incorporation Class B Common Stock Consent Right For so long as any shares of Class B Securities Eligible for Future Sale Immediately after the consummation of this offering Securities Act, except for any shares purchased by one of our affiliates within the meaning of Rule 144 under the Securities Act.
Rule 144 Pursuant to Rule 144, a person who has beneficially owned restricted shares of our common stock or warrants for at least six months would be entitled to sell their securities provided that (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale and (ii) we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale and have filed all required reports under Section 13 or 15(d) of the Exchange Act during the 12 months (or such shorter period as we were required to file reports) preceding the sale. Persons who have beneficially owned restricted shares of our common stock or warrants for at least six months but who are our affiliates at the time of, or at any time during the three months preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of:
1% of the total number of shares of Class A
the average weekly reported trading volume of the Class A Sales by our affiliates under Rule 144 are also limited by manner of sale provisions and notice requirements and to the availability of current public information about us. Restrictions on the Use of Rule 144 by Shell Companies or Former Shell Companies Rule 144 is not available for the resale of securities initially issued by shell companies (other than business combination related shell companies) or issuers that have been at any time previously a shell company. However, Rule 144 also includes an important exception to this prohibition if the following conditions are met:
the issuer of the securities that was formerly a shell company has ceased to be a shell company;
the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
the issuer of the securities has filed all Exchange Act reports and materials required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Current Reports on Form8-K; and
at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company. As a result, our Registration Rights
We have agreed that as soon as practicable, but in no event later than 15 business days after the closing of our initial business combination, we will use our best efforts to file and, within 60 business days after such The post-combination Listing of Securities We have applied to list our units, Class A UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS The following is a summary of the U.S. federal income tax consequences of the acquisition, ownership and disposition of our units, shares of Class A This discussion does not describe all of the tax consequences that may be relevant to you in light of your particular circumstances, including the alternative minimum tax, the Medicare tax on certain investment income and the different consequences that may apply if you are subject to special rules that apply to certain types of investors, such as:
our
banks, financial institutions or financial services entities;
S corporations;
governments or agencies or instrumentalities thereof;
regulated investment companies;
real estate investment trusts;
expatriates or former long-term residents of the United States;
insurance companies;
broker-dealers;
taxpayers subject tomark-to-market accounting rules;
persons holding the securities as part of a “straddle,” hedge, integrated transaction or similar transaction;
U.S. holders (as defined below) whose functional currency is not the U.S. dollar;
persons that actually or constructively own 5% or more of our shares by vote or value;
persons that acquired our securities pursuant to an exercise of employee share options, in connection with employee share incentive plans or otherwise as compensation or in connection with services;
accrual-method taxpayers who are required under Section 451(b) of the Internal Revenue Code of 1986, as amended (the “Code”) to recognize income for U.S. federal income tax purposes no later than when such income is taken into account in applicable financial statements;
controlled foreign corporations or passive foreign investment companies; and
tax-exempt entities. This discussion also does not consider the tax treatment of entities treated as partnerships or other pass-through entities for U.S. federal income tax purposes or persons who hold our securities through such entities. If a partnership (or other entity or arrangement classified as a partnership for U.S. federal income tax purposes) is the beneficial owner of our securities, the U.S. federal income tax treatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partner and the partnership. If you are a partner of a partnership holding our securities, we urge you to consult your own tax advisors. This discussion is based on the Code, administrative pronouncements, judicial decisions and final, temporary and proposed Treasury regulations as of the date hereof, changes to any of which subsequent to the date of this prospectus may affect the tax consequences described herein. This discussion does not address any aspect of state, local ornon-U.S. taxation, or any U.S. federal taxes other than income taxes (such as gift and estate taxes). We have not sought, and do not expect to seek, a ruling from the Internal Revenue Service (“IRS”) as to any U.S. federal income tax consequence described herein. The IRS may disagree with the discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulations, administrative rulings or court decisions will not adversely affect the accuracy of the statements in this discussion. THIS DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY, IS ONLY A SUMMARY OF CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS ASSOCIATED WITH THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR SECURITIES AND IS NOT A SUBSTITUTE FOR CAREFUL TAX PLANNING. EACH PROSPECTIVE INVESTOR IN OUR SECURITIES IS URGED TO CONSULT ITS OWN TAX ADVISORS WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO SUCH INVESTOR OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF U.S. FEDERAL, STATE, LOCAL, ANDNON-U.S. TAX LAWS AND ANY APPLICABLE TAX TREATY. Personal Holding Company Status We could be subject to a second level of U.S. federal income tax on a portion of our income if we are determined to be a personal holding company, or PHC, for U.S. federal income tax purposes. A U.S. corporation generally will be classified as a PHC for U.S. federal income tax purposes in a given taxable year if (i) at any time during the last half of such taxable year, five or fewer individuals (without regard to their citizenship or residency and including as individuals for this purpose certain entities such as certaintax-exempt organizations, pension funds and charitable trusts) own or are deemed to own (pursuant to certain constructive ownership rules) more than 50% of the stock of the corporation by value and (ii) at least 60% of the corporation’s adjusted ordinary gross income, as determined for U.S. federal income tax purposes, for such taxable year consists of PHC income (which includes, among other things, dividends, interest, certain royalties, annuities and, under certain circumstances, rents). Depending on the date and size of our initial business combination, it is possible that at least 60% of our adjusted ordinary gross income may consist of PHC income. In addition, depending on the concentration of our stock in the hands of individuals, including the members of our Allocation of Purchase Price and Characterization of a Unit No statutory, administrative or judicial authority directly addresses the treatment of a unit or instruments similar to a unit for U.S. federal income tax purposes and, therefore, that treatment is not entirely clear. The acquisition of a unit should be treated for U.S. federal income tax purposes as the acquisition of one share of our Class A Stock. Under this treatment, for U.S. federal income tax purposes, each holder of a unit must allocate the purchase price paid by such holder for such unit between the one share of Class A U.S. federal income tax law, each investor must make his or her own determination of fair market value based on all the relevant facts and circumstances. Therefore, we strongly urge each investor to consult his or her tax advisors regarding the determination of fair market value for these purposes. The price allocated to each share of Class A The foregoing treatment of the shares of Class A U.S. Holders This section applies to you if you are a “U.S. holder.” A U.S. holder is a beneficial owner of our units, shares of Class A
an individual who is a citizen or resident of the United States;
a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized in or under the laws of the United States, any state thereof or the District of Columbia;
an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or
a trust (A) the administration of which is subject to the primary supervision of a United States court and which has one or more United States persons (within the meaning of the Code) who have the authority to control all substantial decisions of the trust or (B) that has in effect a valid election under applicable Treasury regulations to be treated as a United States person. Taxation of Distributions. If we pay distributions to U.S. holders of shares of our Class A Dividends we pay to a U.S. holder that is a taxable corporation generally will qualify for the dividends received deduction if the requisite holding period is satisfied. With certain exceptions (including, but not limited to, dividends treated as investment income for purposes of investment interest deduction limitations), and provided certain holding period requirements are met, dividends we pay to anon-corporate U.S. holder generally will constitute “qualified dividends” that will be subject to tax at the maximum tax rate accorded to long-term capital gains. It is unclear whether the redemption rights with respect to the Class A may be. If the holding period requirements are not satisfied, then a corporation may not be able to qualify for the dividends received deduction and would have taxable income equal to the entire dividend amount, andnon-corporate holders may be subject to tax on such dividend at regular ordinary income tax rates instead of the preferential rate that applies to qualified dividend income. Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Redeemable Warrants. Upon a sale or other taxable disposition of our Class A Generally, the amount of gain or loss recognized by a U.S. holder is an amount equal to the difference between (i) the sum of the amount of cash and the fair market value of any property received in such disposition (or, if the Class A Redemption of Class A Common Stock. In the event that a U.S. holder’s Class A Warrants) relative to all of our shares outstanding both before and after the a “complete termination” of the U.S. holder’s interest in us or (iii) is “not essentially equivalent to a dividend” with respect to the U.S. holder. These tests are explained more fully below. In determining whether any of the foregoing tests is satisfied, a U.S. holder takes into account not only stock actually owned by the U.S. holder, but also shares of our stock that are constructively owned by it. A U.S. holder may constructively own, in addition to stock owned directly, stock owned by certain related individuals and entities in which the U.S. holder has an interest or that have an interest in such U.S. holder, as well as any stock the U.S. holder has a right to acquire by exercise of an option, which would generally include Class A If none of the foregoing tests is satisfied, then the Exercise, Lapse, or Redemption of a Redeemable Warrant. Except as discussed below with respect to the cashless exercise of a redeemable warrant, a U.S. holder generally will not recognize taxable gain or loss on the acquisition of Class A The tax consequences of a cashless exercise of a redeemable warrant are not clear under current tax law. A cashless exercise may betax-free, either because the exercise is not a realization event or because the exercise is treated as a recapitalization for U.S. federal income tax purposes. In eithertax-free situation, a U.S. holder’s basis in the Class A exercise) of the redeemable warrant. If the cashless exercise were treated as a recapitalization, the holding period of the Class A It also is possible that a cashless exercise could be treated in whole or in part as a taxable exchange in which gain or loss is recognized. In such event, a U.S. holder would be deemed to have surrendered Due to the absence of authority on the U.S. federal income tax treatment of a cashless exercise, there can be no assurance which, if any, of the alternative tax consequences and holding periods described above would be adopted by the IRS or a court of law. Accordingly, U.S. holders should consult their tax advisors regarding the tax consequences of a cashless exercise. If we redeem If we provide notice that we will redeem Distribution of Additional Redeemable Warrants. Although the authorities governing transactions such as the distribution of additional should not be treated as receiving a taxable distribution. However, the general rule under which a distribution of a right to acquire stock (such as the additional distributions.” A disproportionate distribution is a distribution or a series of distributions, including deemed distributions, that has the effect of the receipt of cash or other property by some stockholders and an increase in the proportionate interest of other stockholders in a corporation’s assets or earnings and profits. For this purpose, distributions of cash or other property incident to an “isolated” redemption of stock do not cause a distribution or series of distributions to be disproportionate. Although not entirely clear, under these rules, we do not expect the distribution of additional If the distribution isnon-taxable to a U.S. holder, and the additional If our position is determined by the IRS or a court to be incorrect, U.S. holders receiving the additional Possible Constructive Distributions. The terms of each redeemable warrant provide for an adjustment to the number of shares of Class A Information Reporting and Backup Withholding. In general, information reporting requirements may apply to dividends paid to a U.S. holder and to the proceeds of the sale or other disposition of our units, shares of Class A Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will generally be allowed as a refund or a credit against a U.S. holder’s U.S. federal income tax liability provided the required information is timely furnished to the IRS. All U.S. holders should consult their tax advisors regarding application of information reporting and backup withholding to them. Non-U.S. Holders This section applies to you if you are a
anon-resident alien individual, other than certain former citizens and residents of the United States subject to U.S. tax as expatriates;
a foreign corporation; or
an estate or trust that is not a U.S. holder; but generally does not include an individual who is present in the United States for 183 days or more in the taxable year of disposition. If you are such an individual, you should consult your tax advisors regarding the U.S. federal income tax consequences of an investment in (including the sale or other disposition of) our units. Taxation of Distributions. In general, any distributions (including constructive distributions) we make to aNon-U.S. holder of shares of our Class A The withholding tax does not apply to dividends paid to aNon-U.S. holder who provides an IRS FormW-8ECI certifying that the dividends are effectively connected with theNon-U.S. holder’s conduct of a trade or business within the United States. Instead, the effectively connected dividends will be subject to regular U.S. income tax as if theNon-U.S. holder were a U.S. resident, unless an applicable income tax treaty provides otherwise. ANon-U.S. holder that is treated as a foreign corporation for U.S. federal income tax purposes receiving effectively connected dividends may also be subject to an additional “branch profits tax” imposed at a rate of 30% (or a lower treaty rate). Exercise, Lapse or Redemption of a Redeemable Warrant. The U.S. federal income tax treatment of aNon-U.S. holder’s exercise of a redeemable warrant, or the lapse or redemption of a redeemable warrant held by aNon-U.S. holder, generally will correspond to the U.S. federal income tax treatment of the exercise, lapse, or redemption of a redeemable warrant by a U.S. holder, as described under “U.S. Holders—Exercise, Lapse or Redemption of a Redeemable Warrant” above, although to the extent a cashless exercise results in a taxable exchange, the consequences would be similar to those described below in Gain on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Redeemable Warrants. ANon-U.S. holder generally will not be subject to U.S. federal income or withholding tax in respect of gain recognized on a sale, taxable exchange or other taxable disposition of our Class A
the gain is effectively connected with the conduct of a trade or business by theNon-U.S. holder within the United States (and, under certain income tax treaties, is attributable to a United States permanent establishment or fixed base maintained by theNon-U.S. holder); or
we are or have been a “United States real property holding corporation” for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the period that theNon-U.S. holder held our Class A Unless an applicable income tax treaty provides otherwise, gain described in the first bullet point above will be subject to tax at generally applicable U.S. federal income tax rates as if theNon-U.S. holder were a U.S. resident. Any gain described in the first bullet point above of aNon-U.S. holder that is treated as a foreign corporation for U.S. federal income tax purposes also may be subject to an additional “branch profits tax” at a 30% rate (or lower treaty rate). If the second bullet point above applies to aNon-U.S. holder, gain recognized by such holder on the sale, exchange or other disposition of our Class A Redemption of Class A Common Stock. The characterization for U.S. federal income tax purposes of the redemption of aNon-U.S. holder’s Class A Distribution of Additional Redeemable Warrants. The U.S. federal income tax treatment of aNon-U.S. holder’s receipt of additional Additional Redeemable Warrants” above. If our position described therein is determined by the IRS or a court to be incorrect,Non-U.S. holders receiving the additional receiving a corporate distribution in an amount equal to the fair market value of such additional Possible Constructive Distributions. The terms of each redeemable warrant provide for an adjustment to the number of shares of Class A Information Reporting and Backup Withholding. Information returns will be filed with the IRS in connection with payments of dividends and the proceeds from a sale or other disposition of our units, shares of Class A Backup withholding is not an additional tax. The amount of any backup withholding from a payment to aNon-U.S. holder will generally be allowed as a credit against the holder’s U.S. federal income tax liability (if any) and may entitle such holder to a refund, provided that the required information is timely furnished to the IRS.Non-U.S. holders should consult their tax advisors regarding the application of information reporting and backup withholding to them. FATCA Withholding Taxes. Sections 1471 through 1474 of the Code and the Treasury regulations and administrative guidance promulgated thereunder (commonly referred as the “Foreign Account Tax Compliance Act” or “FATCA”) generally impose withholding at a rate of 30% in certain circumstances on dividends in respect of our securities that are held by or through certain foreign financial institutions and certain othernon-U.S. entities unless U.S. information reporting and due diligence requirements have been satisfied by, or an exemption applies to, the payee. Under certain circumstances, aNon-U.S. holder might be eligible for refunds or credits of such withholding taxes, and aNon-U.S. holder might be required to file a U.S. federal income tax return to claim such refunds or credits.Non-U.S. holders that are exempt from withholding tax under FATCA generally must provide a certification to that effect on IRS FormW-8BEN-E to eliminate the withholding tax. Prospective investors should consult their tax advisors regarding the possible implications of FATCA on their investment in our securities. Under the terms and subject to the conditions contained in an underwriting agreement dated , 2020 we have agreed to sell to the underwriters named below, for whom Citigroup Global Markets, Inc., Jefferies LLC and UBS Securities LLC are acting as representatives, the following respective numbers of units:
The underwriting agreement provides that the underwriters are obligated to purchase all the units in this offering if any are We have not granted The underwriters propose to offer the units initially at the public offering price on the cover page of this prospectus and to selling group members at that price less a selling concession of $ per unit. In addition, we will pay up to an additional aggregate amount of $5,000,000 for selling concessions of $0.20 per unit for units sold to retail investors, to be paid to the relevant selling group member. The underwriters and the selling group members may allow a discount of $ per unit on sales to other broker/dealers. After the initial public offering the underwriters may change the public offering price and concession and discount to broker/dealers. The following table summarizes the compensation and estimated expenses we will pay:
Pursuant to FINRA Rule 5121, Jefferies LLC will not confirm sales of the securities to any account over which it exercises discretionary authority without the specific written approval of the account holder. We estimate that our out-of-pocket expenses for this offering, excluding underwriting commissions, will be approximately The Representatives have informed us that the underwriters do not intend to make sales to discretionary accounts. We, our We have agreed to indemnify the underwriters against certain liabilities under the Securities Act, or contribute to payments that the underwriters may be required to make in that respect. We expect our units to be listed on the NYSE, under the symbol “PSTH.U” and, once the Class A Prior to this offering, there has been no public market for our securities. Consequently, the initial public offering price for the units was determined by negotiations between us and the representative. The determination of our per unit offering price was more arbitrary than would typically be the case if we were an operating company. Among the factors considered in determining the initial public offering price were the history and prospects of companies whose principal business is the acquisition of other companies, prior offerings of those companies, our management, our capital structure, and currently prevailing general conditions in equity securities markets, including current market valuations of publicly traded companies considered comparable to our company. We cannot assure you, however, that the price at which the units, Class A If we do not complete our initial business combination within 24 months (or 30 months, as applicable) from the closing of this offering, the trustee and the underwriters have agreed that: (1) they will forfeit any rights or claims to their deferred underwriting discounts and commissions, including any accrued interest thereon, then in the trust account; and (2) the deferred underwriters’ discounts and commissions will be distributed on a pro-rata basis, together with any accrued interest thereon (which interest shall be net of taxes payable) to the public stockholders. In connection with this offering, the underwriters may engage in stabilizing
Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum.
Penalty bids permit the representative to reclaim a selling concession from a syndicate member when the units originally sold by the syndicate member are purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions. These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our units or preventing or retarding a decline in the market price of the units. As a result, the price of our units may be higher than the price that might otherwise exist in the open market. These transactions may be effected on the NYSE or otherwise and, if commenced, may be discontinued at any time. We are not under any contractual obligation to engage any of the underwriters to provide any services for us after this offering, and have no present intent to do so. However, any of the underwriters may introduce us to potential target businesses or assist us in raising additional capital in the future. If any of the underwriters provide services to us after this offering, we may pay such underwriter fair and reasonable fees that would be determined at that time in an arm’s-length negotiation; provided that no agreement will be entered into with any of the underwriters and no fees for such services will be paid to any of the underwriters prior to the date that is 90 days from the date of this prospectus, unless FINRA determines that such payment would not be deemed underwriters’ compensation in connection with this offering, and we may pay the underwriters of this offering or any entity with which they are affiliated, a finder’s fee or other compensation for services rendered to us in connection with the completion of a business combination. Some of the underwriters and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with us or our affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions. In addition, in the ordinary course of their business activities, the underwriters and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of ours or our affiliates. The underwriters and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments. A prospectus in electronic format may be made available on the websites maintained by one or more of the underwriters, or selling group members, if any, participating in this offering and one or more of the underwriters participating in this offering may distribute prospectuses electronically. The representative may agree to allocate a number of units to underwriters and selling group members for sale to their online brokerage account holders. Internet distributions will be allocated by the underwriters and selling group members that will make internet distributions on the same basis as other allocations. The units are offered for sale in those jurisdictions in the United States, Europe, Asia and elsewhere it is lawful to make such offers. Each of the underwriters has represented and agreed that it has not offered, sold or delivered and will not offer, sell or deliver any of the units directly or indirectly, or distribute this prospectus or any other offering material relating to the units, in or from any jurisdiction except under circumstances that will result in compliance with the applicable laws and regulations thereof and that will not impose any obligations on us except as set forth in the underwriting agreement. European Economic Area In relation to each member state of the European Economic Area that has implemented the Prospectus Directive (each, a
to any legal entity which is a qualified investor as defined in the Prospectus Directive;
to fewer than 100, or, if the
in any other circumstances that do not require the publication by us of a prospectus pursuant to Article 3 of the Prospectus Directive. provided that no such offer of units referred to in the bullet points above shall require us or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive. Each purchaser of units described in this prospectus located within a For the purpose of this provision, the expression an “offer of units to the public” in any We have not authorized and do not authorize the making of any offer of units through any financial intermediary on their behalf, other than offers made by the underwriters with a view to the final placement of the units as contemplated in this prospectus. Accordingly, no purchaser of the units, other than the underwriters, is authorized to make any further offer of the units on behalf of us or the underwriters. Furthermore, the units are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available by any person to any retail investor in the European Economic Area (the “EEA”). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, “MiFID II”); (ii) a customer within the meaning of Directive 2002/92/EC, as amended, where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II or (iii) not a qualified investor as defined in Directive 2003/71/EC (as amended, including by Directive 2010/73/EU, the “Prospectus Directive”). Consequently, no key information document required by Regulation (EU) No 1286/2014 (as amended, the “PRIIPs Regulation”) for offering or selling the units or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the units or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation. This prospectus has been prepared on the basis that any offer of units in any member state of the EEA will be made pursuant to an exemption under the Prospectus Directive from the requirement to publish a prospectus for offers of units. This prospectus is not a prospectus for the purposes of the Prospectus Directive. Directed Unit Program At our request, the underwriters have reserved up to 1% of the common units being offered by this prospectus for sale at the initial public offering price to our directors, officers, employees and other individuals associated with us and members of their families. The sales will be made by UBS Financial Services Inc., a selected dealer affiliated with UBS Securities LLC, an underwriter of this offering, through a directed unit program. We do not know if these persons will choose to purchase all or any portion of these reserved units, but any purchases they do make will reduce the number of units available to the general public. Any reserved units not so purchased will be offered by the underwriters to the general public on the same terms as the other units of common stock. Participants in the directed unit program who purchase more than $1,000,000 of units shall be subject to a 25-day lock-up with respect to any units sold to them pursuant to that program. This lock-up will have similar restrictions and an identical extension provision to the lock-up agreements described above. Any units sold in the directed unit program to our directors, executive officers or selling stockholders shall be subject to the lock-up agreements described above. Notice to Prospective Investors in the United Kingdom This prospectus is only being distributed to, and is only directed at, persons in the United Kingdom that are qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive that are also (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (ii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (each such person being referred to as a Notice to Residents of Japan The underwriters will not offer or sell any of our units directly or indirectly in Japan or to, or for the benefit of any Japanese person or to others, forre-offering orre-sale directly or indirectly in Japan or to any Japanese person, except in each case pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Securities and Exchange Law of Japan and any other applicable laws and regulations of Japan. For purposes of this paragraph, “Japanese person” means any person resident in Japan, including any corporation or other entity organized under the laws of Japan. Notice to Residents of Hong Kong The underwriters and each of their affiliates have not (1) offered or sold, and will not offer or sell, in Hong Kong, by means of any document, our units other than (A) to “professional investors” as defined in the Securities and Futures Ordinance (Cap.571) of Hong Kong and any rules made under that Ordinance or (B) in other circumstances which do not result in the document being a “prospectus” as defined in the Companies Ordinance (Cap. 32 of Hong Kong) or which do not constitute an offer to the public within the meaning of that Ordinance or (2) issued or had in its possession for the purposes of issue, and will not issue or have in its possession for the purposes of issue, whether in Hong Kong or elsewhere any advertisement, invitation or document relating to our units which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to our securities which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the Securities and Futures Ordinance and any rules made under that Ordinance. The contents of this document have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice. Notice to Residents of Singapore This prospectus or any other offering material relating to our units has not been and will not be registered as a prospectus with the Monetary Authority of Singapore, and the units will be offered in Singapore pursuant to exemptions under Section 274 and Section 275 of the Securities and Futures Act, Chapter 289 of Singapore (the “Securities and Futures Act”). Accordingly our units may not be offered or sold, or be the subject of an invitation for subscription or purchase, nor may this prospectus or any other offering material relating to our units be circulated or distributed, whether directly or indirectly, to the public or any member of the public in Singapore other than (a) to an institutional investor or other person specified in Section 274 of the Securities and Futures Act, (b) to a sophisticated investor, and in accordance with the conditions specified in Section 275 of the Securities and Futures Act or (c) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the Securities and Futures Act. Notice to Residents of Germany Each person who is in possession of this prospectus is aware that no German sales prospectus (Verkaufsprospekt) within the meaning of the Securities Sales Prospectus Act (Wertpapier-Verkaufsprospektgesetz, the “Act”) of the Federal Republic of Germany has been or will be published with respect to our units. In particular, each underwriter has represented that it has not engaged and has agreed that it will not engage in a public offering (offentliches Angebot) within the meaning of the Act with respect to any of our units otherwise then in accordance with the Act and all other applicable legal and regulatory requirements. Notice to Residents of France The units are being issued and sold outside the Republic of France and that, in connection with their initial distribution, it has not offered or sold and will not offer or sell, directly or indirectly, any units to the public in the Republic of France, and that it has not distributed and will not distribute or cause to be distributed to the public in the Republic of France this prospectus or any other offering material relating to the units, and that such offers, sales and distributions have been and will be made in the Republic of France only to qualified investors (investisseurs qualifiés) in accordance with ArticleL.411-2 of the Monetary and Financial Code and decrét no.98-880 dated October 1, 1998. Notice to Residents of the Netherlands Our units may not be offered, sold, transferred or delivered in or from the Netherlands as part of their initial distribution or at any time thereafter, directly or indirectly, other than to, individuals or legal entities situated in The Netherlands who or which trade or invest in securities in the conduct of a business or profession (which includes banks, securities intermediaries (including dealers and brokers), insurance companies, pension funds, collective investment Notice to Canadian Residents Resale Restrictions The distribution of units in Canada is being made only in the provinces of Ontario, Quebec, Alberta and British Columbia on a private placement basis exempt from the requirement that we prepare and file a prospectus with the securities regulatory authorities in each province where trades of these securities are made. Any resale of the units in Canada must be made under applicable securities laws which may vary depending on the relevant jurisdiction, and which may require resales to be made under available statutory exemptions or under a discretionary exemption granted by the applicable Canadian securities regulatory authority. Purchasers are advised to seek legal advice prior to any resale of the securities. Representations of Canadian Purchasers By purchasing units in Canada and accepting delivery of a purchase confirmation, a purchaser is representing to us and the dealer from whom the purchase confirmation is received that:
the purchaser is entitled under applicable provincial securities laws to purchase the units without the benefit of a prospectus qualified under those securities laws as it is an “accredited investor” as defined under National Instrument45-106—Prospectus Exemptions;
the purchaser is a “permitted client” as defined in National Instrument31-103—Registration Requirements, Exemptions and Ongoing Registrant Obligations;
where required by law, the purchaser is purchasing as principal and not as agent; and
the purchaser has reviewed the text above under Resale Restrictions. Statutory Rights of Action Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if the prospectus (including any amendment thereto) such as this document contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser of these securities in Canada should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor. Enforcement of Legal Rights All of our directors and officers as well as the experts named herein may be located outside of Canada and, as a result, it may not be possible for Canadian purchasers to effect service of process within Canada upon us or those persons. All or a substantial portion of our assets and the assets of those persons may be located outside of Canada and, as a result, it may not be possible to satisfy a judgment against us or those persons in Canada or to enforce a judgment obtained in Canadian courts against us or those persons outside of Canada. Taxation and Eligibility for Investment Canadian purchasers of units should consult their own legal and tax advisors with respect to the tax consequences of an investment in the units in their particular circumstances and about the eligibility of the units for investment by the purchaser under relevant Canadian legislation. Conflicts of Interest Joseph Steinberg, one of our director nominees, is Chairman of the Board of Directors of Jefferies Financial Group Inc., which is affiliated with Jefferies LLC, one of the underwriters for this offering. Accordingly, this offering is being made in compliance with the requirements of FINRA Rule 5121. This rule requires, among other things, that a “qualified independent underwriter” has participated in the preparation of, and has exercised the usual standards of, “due diligence” with respect to, the registration statement. Pursuant to FINRA Rule 5121, Jefferies LLC will not confirm sales of the securities to any account over which it exercises discretionary authority without the specific written approval of the account holder. Cadwalader, Wickersham & Taft LLP has passed upon the validity of the securities offered hereby on behalf of us. Certain legal matters will be passed upon on behalf of the underwriters by Ropes & Gray LLP. The financial statements of Pershing Square Tontine Holdings, Ltd. at May 8, 2020, and for the period from May 4, 2020 (inception) through May 8, 2020 included in this prospectus have been audited by Marcum LLP, independent registered public accounting firm, as set forth in their report thereon, appearing elsewhere in this prospectus, and are included in reliance on such report given upon such firm as experts in auditing and accounting. WHERE YOU CAN FIND ADDITIONAL INFORMATION We have filed with the SEC a registration statement on FormS-1 under the Securities Act with respect to the securities we are offering by this prospectus. This prospectus does not contain all of the information included in the registration statement. For further information about us and our securities, you should refer to the registration statement and the exhibits and schedules filed with the registration statement. Whenever we make reference in this prospectus to any of our contracts, agreements or other documents, the references are materially complete but may not include a description of all aspects of such contracts, agreements or other documents, and you should refer to the exhibits attached to the registration statement for copies of the actual contract, agreement or other document. Upon completion of this offering, we will be subject to the information requirements of the Exchange Act and will file annual, quarterly and current event reports, proxy statements and other information with the SEC. You can read our SEC filings, including the registration statement, over the Internet at the SEC’s website at www.sec.gov. REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and Board of Directors of Pershing Square Tontine Holdings, Ltd. Opinion on the Financial Statements We have audited the accompanying balance sheet of Pershing Square Tontine Holdings, Ltd. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. /s/ MarcumLLP MarcumLLP We have served as the Company’s auditor since 2020. New York, NY
PERSHING SQUARE TONTINE HOLDINGS, LTD.
PERSHING SQUARE TONTINE HOLDINGS, LTD.
PERSHING SQUARE TONTINE HOLDINGS, LTD.
PERSHING SQUARE TONTINE HOLDINGS, LTD.
PERSHING SQUARE TONTINE HOLDINGS, LTD. NOTES TO FINANCIAL STATEMENTS Note 1—Description of Organization and Business Operations Organization and General Pershing Square Tontine Holdings, Ltd. (the “Company”) was incorporated in Delaware on May 4, 2020. The Company was 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 (the “Initial Business Combination”). The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). At Sponsor and Proposed Financing The Company’s sponsor is Pershing Square TH Sponsor, LLC, a Delaware limited liability company (the “Sponsor”) organized on May 4, 2020. The Company intends to finance its Initial Business Combination with The Trust Account The proceeds held in the Trust Account will be invested only in U.S. Treasury obligations with a maturity of one hundred eighty (180) days or less or in money market funds that meet certain conditions under Rule2a-7 under the Investment Company Act of 1940 and that invest only in U.S. Treasury obligations. Funds will remain in the Trust Account until the earlier of (i) the consummation of the Initial Business Combination or (ii) the distribution of the Trust Account proceeds as described below. The remaining proceeds outside the Trust Account may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses. The Company’s amended and restated certificate of incorporation redemption of 100% of the Public Shares if the Company is unable to complete an Initial Business Combination within Initial Business Combination The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Proposed Offering, although substantially all of the net proceeds of the Proposed Offering are intended to be generally applied toward consummating an Initial Business Combination. The Initial Business Combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding the amount of any deferred underwriting discount held in the Trust Account) at the time of the agreement to enter into the Initial Business Combination. Furthermore, there is no assurance that the Company will be able to successfully effect an Initial Business Combination. The Company, after signing a definitive agreement for an Initial Business Combination, will either (i) seek stockholder approval of the Initial Business Combination at a meeting called for such purpose in connection with which stockholders may seek to redeem their shares, regardless of whether they vote for or against the Initial Business Combination, for cash equal to their pro-rata share of the aggregate amount then on deposit in the Trust Account as of five business days prior to the consummation of the Initial Business Combination, including any interest earned on the funds held in the Trust Account and not previously released to the Company to pay the Company’s taxes, or (ii) provide stockholders with the opportunity to sell their Public Shares to the Company by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount in cash equal to their pro-rata share of the aggregate amount then on deposit in the Trust Account as of five business days prior to the consummation of the Initial Business Combination, including any interest earned on the funds held in the Trust Account and not previously released to the Company to pay the Company’s taxes. The decision as to whether the Company will seek stockholder approval of the Initial Business Combination or will allow stockholders to sell their Public Shares in a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require the Company to seek stockholder approval, unless a vote is required by law or under NYSE rules. If the Company seeks stockholder approval, it will complete its Initial Business Combination only if a majority of the If the Company holds a stockholder vote or there is a tender offer for shares in connection with an Initial Business Combination, a public stockholder will have the right to redeem its shares for an amount in cash equal to its pro-rata share of the aggregate amount then on deposit in the Trust Account as of five business days prior to the consummation of the Initial Business Combination, including any interest earned on the funds held in the Trust Account and not previously released to the Company to pay the Company’s taxes. As a result, such shares of Class A Pursuant to the Company’s amended and restated certificate of incorporation, if the Company is unable to complete the Initial Business Combination within Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than amount then on deposit in the Trust Account including any interest earned on the funds held in the Trust Account and not previously released to the Company to pay the Company’s taxes (less $100,000 to pay dissolution expenses), divided by the number of In the event of a liquidation, dissolution or winding up of the Company after an Initial Business Combination, the Company’s stockholders are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of stock, if any, having preference over the common stock. The Company’s stockholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the common stock, except that the Company will provide its stockholders with the opportunity to redeem their Public Shares for cash equal to their pro-rata share of the aggregate amount then on deposit in the Trust Account, upon the completion of the Initial Business Combination, subject to the limitations described herein. Note 2—Summary of Significant Accounting Policies Basis of Presentation The accompanying audited financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. The accompanying unaudited financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the period presented. The interim results for the period from May 4, 2020 (inception) to June 30, 2020 are not necessarily indicative of the results to be expected for the period from May 4, 2020 (inception) to December 31, 2020 or for any future interim periods. In connection with the Company’s assessment of going concern considerations in accordance with ASU2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” as of Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. The JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply tonon-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company 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. Net Loss Per Common Share Net loss per common share is computed by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding during the Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Use of Estimates The preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting Cash and Cash Equivalents The Company considers all short-term investments with a maturity of three months or less at the time of purchase to be cash equivalents. Deferred Offering Costs The Company complies with the requirements of ASC340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A—“Expenses of Offering.” Deferred offering costs consist of legal, accounting, underwriting fees and other costs incurred through the balance sheet Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to 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. ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2020 and May 8, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. Recent Accounting Pronouncements Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements. Note 3—Public Offering Pursuant to the Proposed Offering, the Company intends to offer for sale up to Each Unit consists of one share of the Company’s Class A common stock, $0.0001 par value (“Class A Common Stock”), andone-ninth of one redeemable warrant (or Each whole Redeemable Warrant or Forward Purchase Warrant (as defined below and, collectively, the “Warrants”) entitles the holder to purchase one share of Class A addition, if (x) we issue additional shares of Class A
No fractional shares will be issued, Once the Warrants become exercisable, the Company may redeem the outstanding Warrants in whole and not in part at a price of $0.01 per Warrant upon a minimum of 30 days’ prior written notice of redemption, if and only if the In addition, once the Warrants become exercisable, the Company may redeem the outstanding Warrants in whole and not in part at a price of $0.10 per Warrant upon a minimum 30 days’ prior written notice, provided that holders will be able to exercise their The Company
upon the consummation of its Initial Business Combination, only 25% of the Deferred Discount Note 4—Related Party Transactions Sponsor Shares On May 7, 2020, the Sponsor acquired 100 shares of Class B The Company’s Sponsor The Sponsor will Of the The Sponsor will agree, subject to limited exceptions, not to transfer, assign or sell the Sponsor Director Warrants Each of our directors, other than Mr. Ackman, the purchase price of the Sponsor As described above, certain proceeds from the sale of Any director purchasing a Director Warrant will agree, subject to limited exceptions, not to transfer, assign or sell such Director Warrant until Forward Purchase Agreement
The Forward Purchase Agreement also will provide that the Forward Purchasers may elect to purchase up to an additional aggregate of $2,000,000,000 of Forward Purchase Units (the “Additional Forward Purchase Units”), or up to 100,000,000 such units, in whole or in part, in one or more private placements in such amounts and at such time or times as the Forward Purchasers determine, but no later than simultaneously with the closing of the Initial Business Combination. The Company and the Forward Purchasers may determine, by mutual agreement, to increase the number of Additional Forward Purchase Units at any time prior to the Initial Business Combination. The Forward Purchasers may transfer the right to purchase the Additional Forward Purchase Units, in whole or in part, to any entity that is managed by Pershing Square Capital Management, L.P. (the “Affiliate Transferees”), but not to any third party. The Forward Purchasers’ obligation or right, as applicable, to purchase the Forward Purchase Units will be allocated among the Forward Purchasers from time to time as described in this prospectus. The Forward Purchase Shares, the Forward Purchase Warrants and the shares of Class A the Forward Purchase Securities; and the Forward Purchase Shares will not be entitled to receive any Director Forward Purchase Agreement Prior to or concurrently with the Proposed Offering, we will enter into a Director Forward Purchase Agreement with certain of our independent directors (the “Forward Purchase Directors”). The Forward Purchase Directors have agreed to purchase, in one or more private placements in such amounts and at such time or times as each Forward Purchase Director determines, but no later than simultaneously with the closing of our Initial Business Combination, an aggregate of $6,000,000 of Forward Purchase Units. The Forward Purchase Directors may not transfer their obligation to purchase such Forward Purchase Units, other than to our Sponsor and its affiliates and to other directors. Such Forward Purchase Securities will be subject to certain transfer restrictions and have certain registration rights, as described herein. Registration Rights
The post-combination Related Party Loans The Sponsor has agreed to loan the Company up to $1,500,000 to cover expenses related to the Proposed Offering, general corporate purposes prior to our Initial Business Combination and potential transaction costs in connection with our intended Initial Business Combination, pursuant to a promissory note (the “Note”). This loan is unsecured, will bear interest on a monthly basis at the Applicable Federal Rate, and is payable no later than the end of Note 5—Stockholder’s Equity Common Stock The authorized common stock of the Company includes up to Combination, it may (depending on the terms of such an Initial Business Combination) be required to increase the number of shares of Class A Preferred Stock The Company is authorized to issue 1,000,000 shares of preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At June 30, 2020 and May 8, 2020, there were no shares of preferred stock issued or outstanding. Note 6—Subsequent Events The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the interim financial statements were available to be issued. From the date of the balance sheet to
Pershing Square Tontine Holdings, Ltd.
PRELIMINARY PROSPECTUS
, 2020 Until , 2020 (25 days after the date of this prospectus), all dealers that buy, sell or trade our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 13. Other Expenses of Issuance and Distribution. The estimated expenses payable by us in connection with the offering described in this registration statement (other than the underwriting discounts and commissions) will be as follows:
Item 14. Indemnification of Directors and Officers. Our amended and restated certificate of incorporation Section 145 of the DGCL concerning indemnification of officers, directors, employees and agents is set forth below. Section 145. Indemnification of officers, directors, employees and agents; insurance. (a) A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person’s conduct was unlawful. (b) A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a
II-1 director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. (c) To the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b) of this section, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith. (d) Any indemnification under subsections (a) and (b) of this section (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsections (a) and (b) of this section. Such determination shall be made, with respect to a person who is a director or officer of the corporation at the time of such determination, (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (4) by the stockholders. (e) Expenses (including attorneys’ fees) incurred by an officer or director of the corporation in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys’ fees) incurred by former directors and officers or other employees and agents of the corporation or by persons serving at the request of the corporation as directors, officers, employees or agents of another corporation, partnership, joint venture, trust or other enterprise may be so paid upon such terms and conditions, if any, as the corporation deems appropriate. (f) The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office. A right to indemnification or to advancement of expenses arising under a provision of the certificate of incorporation or a bylaw shall not be eliminated or impaired by an amendment to the certificate of incorporation or the bylaws after the occurrence of the act or omission that is the subject of the civil, criminal, administrative or investigative action, suit or proceeding for which indemnification or advancement of expenses is sought, unless the provision in effect at the time of such act or omission explicitly authorizes such elimination or impairment after such action or omission has occurred. (g) A corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by
II-2 such person in any such capacity, or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liability under this section. (h) For purposes of this section, references to “the corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this section with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. (i) For purposes of this section, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to “serving at the request of the corporation” shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the corporation” as referred to in this section. (j) The indemnification and advancement of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. (k) The Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification brought under this section or under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise. The Court of Chancery may summarily determine a corporation’s obligation to advance expenses (including attorneys’ fees). Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers, and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment of expenses incurred or paid by a director, officer or controlling person in a successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to the court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. In accordance with Section 102(b)(7) of the DGCL, our amended and restated certificate of incorporation
II-3 DGCL. However, this provision does not limit or eliminate our rights or the rights of any stockholder to seeknon-monetary relief, such as an injunction or rescission, in the event of a breach of a director’s duty of care. If the DGCL is amended to authorize corporate action further eliminating or limiting the liability of directors, then, in accordance with our amended and restated certificate of incorporation, the liability of our directors to us or our stockholders will be eliminated or limited to the fullest extent authorized by the DGCL, as so amended. Any repeal or amendment of provisions of our amended and restated certificate of incorporation limiting or eliminating the liability of directors, whether by our stockholders or by changes in law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by law) be prospective only, except to the extent such amendment or change in law permits us to further limit or eliminate the liability of directors on a retroactive basis. Our amended and restated certificate of incorporation The right to indemnification conferred by our amended and restated certificate of incorporation is a contract right that includes the right to be paid by us the expenses incurred in defending or otherwise participating in any proceeding referenced above in advance of its final disposition, provided, however, that if the DGCL requires, an advancement of expenses incurred by our officer or director (solely in the capacity as an officer or director of our corporation) will be made only upon delivery to us of an undertaking, by or on behalf of such officer or director, to repay all amounts so advanced if it is ultimately determined that such person is not entitled to be indemnified for such expenses under our amended and restated certificate of incorporation or otherwise. The rights to indemnification and advancement of expenses will not be deemed exclusive of any other rights which any person covered by our amended and restated certificate of incorporation may have or hereafter acquire under law, our amended and restated certificate of incorporation, our bylaws, an agreement, vote of stockholders or disinterested directors, or otherwise. Any repeal or amendment of provisions of our amended and restated certificate of incorporation affecting indemnification rights, whether by our stockholders or by changes in law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by law) be prospective only, except to the extent such amendment or change in law permits us to provide broader indemnification rights on a retroactive basis, and will not in any way diminish or adversely affect any right or protection existing at the time of such repeal or amendment or adoption of such inconsistent provision with respect to any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision. Our amended and restated certificate of incorporation Our bylaws include
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Any repeal or amendment of provisions of our bylaws affecting indemnification rights, whether by our board of directors, stockholders or by changes in applicable law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by law) be prospective only, except to the extent such amendment or change in law permits us to provide broader indemnification rights on a retroactive basis, and will not in any way diminish or adversely affect any right or protection existing thereunder with respect to any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision. We will enter into indemnity agreements with each of our directors and officers, a form of which is to be filed as an exhibit to this Registration Statement. These agreements will require us to indemnify these individuals to the fullest extent permitted under Delaware law and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified. Pursuant to the Underwriting Agreement to be filed as Exhibit 1.1 to this Registration Statement, we have agreed to indemnify the underwriters and the underwriters have agreed to indemnify us against certain civil liabilities that may be incurred in connection with this offering, including certain liabilities under the Securities Act. Item 15. Recent Sales of Unregistered Securities. On May 7, 2020, our In addition, our In June 2020, we entered into the No underwriting discounts or commissions were paid with respect to such sales. Item 16. Exhibits and Financial Statement Schedules. (a) Exhibits. The list of exhibits following the signature page of this registration statement is incorporated herein by reference. (b) Financial Statements. See pageF-1 for an index to the financial statements and schedules included in the registration statement.
II-5 Item 17. Undertakings. (a) The undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser. (b) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. (c) The undersigned registrant hereby undertakes that: (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
II-6 EXHIBIT INDEX
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Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on the
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
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