Delaware |
001-39331 |
98-1531250 | ||
(State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification No.) |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☒ | Smaller reporting company | ||||
Emerging growth company |
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F-1 |
• | “ Additional Seller Backstop Election |
• | “ ASC |
• | “ ASC 480 |
• | “ ASC 815 |
• | “ APIs |
• | “ Backstop Agreement |
• | “ Backstop Forfeiture |
• | “ Bank of America |
• | “ BGPT Sponsor |
• | “ BGPT Note |
• | “ Black-Scholes Warrant Value |
• | “ Bloomberg |
• | “ Business Combination |
• | “ Business Combination Agreement |
• | “ Cannae |
• | “ Cannae Backstop |
• | “ Cannae Subscription |
• | “ Cayman Islands Companies Act |
• | “ Class A Common Stock |
• | “ Class C Common Stock |
• | “ Class D Common Stock |
• | “ Closing |
• | “ Closing Date |
• | “ Closing Cash Consideration |
• | “ Closing Equity Consideration |
• | “ Code |
• | “ Commitment Letter |
• | “ Common Stock |
• | “ Companies |
• | “ Continental |
• | “ Court of Chancery |
• | “ Debt Financing |
• | “ Debt Financing Sources |
• | “ DGCL |
• | “ DTC |
• | “ Domestication |
• | “ Effective Time |
• | “ Exchange Act |
• | “ Extraordinary General Meeting |
• | “ FASB |
• | “ Forward Purchase Agreement |
• | “ FPA Termination Agreement |
• | “ FTC |
• | “ Incentive Plan |
• | “ IT |
• | “ Insiders |
• | “ IRS |
• | “ JDI |
• | “ Jobs Act |
• | “ LIBOR |
• | “ New Facility |
• | “ New S1 Holdco Operating Agreement |
• | “ NYSE |
• | “ OpenMail |
• | “ PSH |
• | “ Person |
• | “ Post-Closing Company System1 |
• | “ Post-Closing Company Board System1 Board |
• | “ Preferred Stock |
• | “ Prior Insider Agreement |
• | “ Prior Registration Rights Agreement |
• | “ Prior Sponsor Agreement |
• | “ Protected |
• | “ Protected Equityholders |
• | “ Protected Rollover Parties |
• | “ Protected Support Agreement |
• | “ Protected UK |
• | “ Protected UK Contribution Parties |
• | “ RAMP |
• | “ Redemption Fair Market Value |
• | “ Registration Rights Agreement |
• | “ Related Party |
• | “ Revolving Facility |
• | “ Rule 144 |
• | “ RSU RSUs |
• | “ S1 Founders |
• | “ S1 Midco |
• | “ SEC |
• | “ Section 16 Officers |
• | “ Securities Act |
• | “ Seller Backstop Amount |
• | “ Sponsor Agreement |
• | “ Sponsor Agreement Amendment No. 1 |
• | “ Sponsors |
• | “ Stockholders Agreement |
• | “ S1 Holdco Class A Units |
• | “ S1 Holdco Class B Units |
• | “ S1 Holdco Common Units |
• | “ S1 Holdco |
• | “ System1 Equityholders |
• | “ System1 Post-Closing Company |
• | “ System1 Board Post-Closing Company Board |
• | “ System1 Bylaws |
• | “ System1 Charter |
• | “ System1 Stockholder System1 Stockholders |
• | “ Tax Receivable Agreement |
• | “ Term Loan |
• | “ Transactions |
• | “ Trasimene Sponsor |
• | “ Trasimene Note |
• | “ Trebia |
• | “ Trebia Board |
• | “ Trebia Class A Ordinary Share Trebia Class A Ordinary Shares |
• | “ Trebia Class B Ordinary Share Trebia Class B Ordinary Shares |
• | “ Trebia Finco |
• | “ Trebia IPO |
• | “ Trebia Merger Sub I |
• | “ Trebia Merger Sub II |
• | “ Trebia Public Shares |
• | “ Trebia Public Shareholder Trebia Public Shareholders |
• | “ Trebia Public Warrants one-third of one redeemable warrant purchased in the Trebia IPO. |
• | “ Trebia Shareholder Trebia Shareholders |
• | “ Trebia Shareholder Redemption Value |
• | “ Trust Account |
• | “ Value Creation Units |
• | “ VWAP |
• | “ Warrant Agent |
• | “ Working Capital Loan Working Capital Loans |
• | We have a limited operating history, which makes it difficult to evaluate our business and prospects and may increase the risks associated with your investment; |
• | Our revenue is tied to the effectiveness and performance of our responsive acquisition marketing platform, or RAMP; |
• | A meaningful portion of our revenue is attributable to our agreements with Google, and therefore is subject to their practices; |
• | We rely on large-scale acquisition marketing channels, such as Google, Facebook and Taboola, as well as our network partners, for a significant portion of our consumer internet traffic; |
• | Efforts designed to drive visitors to our various brands and businesses or those of our advertisers may not be successful or cost-effective; |
• | We rely on third parties for our marketing efforts; if the pricing, terms, operations or policies of these third parties change we may not be able to maintain the effectiveness of such efforts; |
• | We have entered into, and may in the future enter into, credit facilities which may contain operating and financial covenants that restrict our business and financing activities; |
• | We may not be able to secure additional financing on favorable terms, or at all, to meet our future capital needs, which may in turn impair our growth; |
• | Our tax liabilities may be greater than anticipated; |
• | The market for programmatic advertising is extremely competitive, and we may not be able to compete successfully with our current or future competitors; and |
• | We have identified material weaknesses in our internal control over financial reporting. If we are unable to remediate the material weaknesses, or if other material weaknesses are identified, we may not be able to report our financial results accurately, prevent fraud or file our periodic reports as a public company in a timely manner. |
Shares of Class A Common Stock offered by us |
Up to 25,483,334 shares issuable upon exercise of Warrants. |
Shares of Class A Common Stock offered by the Selling Securityholders |
106,508,061 shares. |
Shares of Class A Common Stock outstanding prior to the exercise of all Warrants |
85,146,614 shares (as of April 1, 2022). |
Shares of Class A Common Stock outstanding assuming the exercise of all Warrants |
131,991,395 shares (as of April 1, 2022). |
Warrants offered by the Selling Securityholders |
8,424,034 warrants. |
Total Warrants outstanding |
25,483,334 warrants. |
Exercise price per share pursuant to the Warrants |
$11.50 |
Use of proceeds |
We will not receive any proceeds from the sale of shares by the Selling Securityholders. We will receive the proceeds from any exercise of the Warrants for cash, which we intend to use for general corporate and working capital purposes. |
Risk factors |
You should carefully read the “Risk Factors” beginning on page 5 and the other information included in this prospectus for a discussion of factors you should consider carefully before deciding to invest in our Common Stock or Warrants. |
NYSE symbol for our Common Stock |
SST |
NYSE symbol for our Warrants |
SST.WS |
• | build and maintain a reputation for providing a superior platform for monetizing consumer intent, and for creating trust and maintaining long-term relationships with consumers and platform customers; |
• | drive consumers with relevant commercial intent to our owned and operated websites and to websites operated by our advertisers; |
• | maintain and expand our relationships with suppliers of quality advertising inventory; |
• | distinguish ourselves from competitors; |
• | develop, offer, maintain and continually improve a competitive customer acquisition marketing platform that meet the evolving needs of our consumers and platform customers; |
• | scale our business efficiently to keep pace with demand for services such as RAMP and other digital media and advertising technology offerings; |
• | create new revenue opportunities through acquiring new business and successfully integrate and meaningfully grow those businesses; |
• | respond to evolving industry standards and the enactment of government regulations that impact our business, particularly in the areas of data collection and consumer privacy; |
• | prevent or mitigate failures or breaches of data security and our technology infrastructure; |
• | expand our businesses internationally; and |
• | hire and retain qualified and motivated employees. |
• | sell assets or make changes to the nature of our business; |
• | engage in mergers or acquisitions; |
• | incur, assume or permit additional indebtedness; |
• | make restricted payments, including paying dividends on, repurchasing, redeeming or making distributions with respect to our capital stock; |
• | make specified investments; |
• | engage in transactions with our affiliates; and |
• | make payments in respect of subordinated debt. |
• | We did not design and maintain an effective control environment commensurate with our financial reporting requirements. Specifically, we lacked a sufficient number of professionals with an appropriate level of accounting knowledge, training and experience to appropriately analyze, record and disclose accounting matters timely and accurately. Additionally, the limited personnel resulted in an inability to consistently establish appropriate authorities and responsibilities in pursuit of financial reporting objectives, as demonstrated by, among other things, insufficient segregation of duties in our finance and accounting functions. |
• | We did not design and maintain effective controls in response to the risks of material misstatement. Specifically, changes to existing controls or the implementation of new controls have not been sufficient to respond to changes to the risks of material misstatement to financial reporting. |
• | We did not design and maintain effective controls to timely analyze and record the financial statement effects from acquisitions. Specifically, we did not design and maintain effective controls over the (i) application of U.S. GAAP to such transactions, (ii) review of the inputs and assumptions used in the discounted cash flow analysis to value acquired intangible assets at an appropriate level of precision, (iii) the tax impacts of acquisitions to the financial statements, and (iv) conforming of U.S. GAAP and accounting policies of acquired entities to that of the Company. In addition, we did not design and maintain effective controls relating to the oversight and ongoing recording of the financial statement results of the acquired businesses. |
• | We did not design and maintain formal accounting policies, procedures and controls to achieve complete, accurate and timely financial accounting, reporting and disclosures, including controls over (i) the preparation and review of business performance reviews, account reconciliations and journal entries, and (ii) maintaining appropriate segregation of duties. Additionally, we did not design and maintain controls over the classification and presentation of accounts and disclosures in the financial statements. |
• | We did not design and maintain effective controls over the completeness and accuracy of accrued liabilities. |
• | We did not design and maintain effective controls over information technology (“IT”) general controls for information systems that are relevant to the preparation of our financial statements. Specifically, we |
did not design and maintain: (i) program change management controls to ensure that IT program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized, and implemented appropriately; (ii) user access controls to ensure appropriate segregation of duties and that adequately restrict user and privileged access to financial applications, programs, and data to appropriate Company personnel; (iii) computer operations controls to ensure that critical batch jobs are monitored and data backups are authorized and monitored, and (iv) testing and approval controls for program development to ensure that new software development is aligned with business and IT requirements. |
• | Hiring additional senior level accounting personnel to bolster our financial reporting and technical accounting capabilities. |
• | Designing and implementing controls to formalize roles and review responsibilities to align with our team’s skills and experience and designing and implementing controls over segregation of duties. |
• | Engaging a third party to assist in identifying risks of material misstatement and designing and implementing controls to address the identified risks of material misstatement. |
• | Designing and implementing controls related to accounting for acquisitions and other technical accounting and financial reporting matters, including controls over the preparation and review of accounting memoranda addressing these matters, valuations and key assumptions utilized in the valuations, tax impacts, and ongoing recording of the financial statement results of the acquired businesses. |
• | Designing and implementing formal accounting policies, procedures and controls supporting our period-end financial reporting process, including controls over the preparation and review of account reconciliations and journal entries, business performance reviews, foreign exchange gains/losses for intercompany transactions, and classification and presentation of accounts and disclosures. |
• | Designing and implementing controls over the completeness and accuracy of accrued liabilities. |
• | Designing and implementing controls related to accounting for complex financial instruments. |
• | Designing and implementing IT general controls, including controls over change management, the review and update of user access rights and privileges, controls over batch jobs and data backups, and program development approvals and testing. |
• | companies that operate, or could develop, consumer finance search websites, educational / career enhancement search websites, automotive search websites, points of interest websites, general how-to websites and other comparison search type websites in the verticals in which we compete our operated and owned search engines; |
• | media sites, including websites dedicated to celebrity news, fitness news, interactive quizzes and general acts about the world; and |
• | internet search engines. |
• | the ability of our advertisers to earn an attractive return on investment from their spending with us; |
• | our ability to increase the number of consumers using our websites; |
• | our ability to increase return on investment for advertisers that place advertisements on our platform; |
• | our ability to provide a seamless, user-friendly advertising platform for our advertisers; |
• | our ability to compete effectively with other media for advertising spending; and |
• | our ability to keep pace with changes in technology and the practices and offerings of our competitors. |
• | fluctuations in digital advertising demand and costs; |
• | disruptions in our business operations or target markets caused by, among other things, cyber-security incidents, terrorism or other intentional acts, outbreaks of disease, such as the COVID-19 pandemic, or earthquakes, floods, or other natural disasters; |
• | entry of new competition into our markets; |
• | our ability to achieve targeted operating income and margins and revenues; |
• | the number, severity, and timing of threat outbreaks and cyber security incidents; |
• | the loss of customers or strategic partners; |
• | changes in the mix or type of subscriptions sold and changes in consumer retention rates; |
• | the rate of adoption of new technologies and new releases of operating systems, and new business processes; |
• | consumer confidence and spending changes; |
• | the impact of litigation, regulatory inquiries, or investigations; |
• | the impact of acquisitions and divestitures and our ability to achieve expected synergies or attendant cost savings; |
• | fluctuations in foreign currency exchange rates and interest rates; |
• | changes in tax laws, rules, and regulations; and |
• | changes in consumer privacy and data protection laws and regulations. |
• | develop our existing websites, invest in RAMP and our other software products, including by investing in our engineering team, creating, acquiring or licensing new products or features, and improving the availability and security of our platform and product offerings; |
• | create new products and services to meet consumer and partner demands; |
• | continue to expand internationally by and spend through RAMP by adding inventory and data from countries our clients are seeking; |
• | improve our technology infrastructure, including investing in internal technology development and acquiring or licensing outside technologies; |
• | cover general and administrative expenses, including legal, accounting, tax and other third party expenses necessary to support a larger organization; |
• | cover sales and marketing expenses, including a significant expansion of our direct sales organization; |
• | cover expenses related to data collection and consumer privacy compliance, including additional infrastructure, automation and personnel; and |
• | explore strategic acquisitions. |
• | Our international operations subject us to a variety of additional risks, including: |
• | increased management, travel, infrastructure and legal compliance costs associated with having multiple international operations; |
• | long payment cycles; |
• | potential complications in enforcing contracts and collections; |
• | increased financial accounting and reporting burdens and complexities; |
• | concerns regarding negative, unstable or changing economic conditions in the countries and regions where we operate; |
• | increased administrative costs and risks associated with compliance with local laws and regulations, including relating to privacy and data security; |
• | regulatory and legal compliance, including with privacy and cybersecurity laws, anti-bribery laws, import and export control laws, economic sanctions and other regulatory limitations or obligations on our operations; |
• | heightened risks of unfair or corrupt business practices and of improper or fraudulent sales arrangements; |
• | difficulties in invoicing and collecting in foreign currencies; |
• | foreign currency exposure risk; |
• | difficulties in repatriating or transferring funds from or converting currencies; |
• | administrative difficulties, costs and expenses related to various local languages, cultures and political nuances; |
• | varied labor and employment laws, including those relating to termination of employees; |
• | reduced protection for intellectual property rights in some countries and practical difficulties of enforcing rights abroad; and |
• | compliance with the laws of numerous foreign taxing jurisdictions, including withholding obligations, and overlapping of different tax regimes. |
• | regulatory requirements or delays; |
• | anticipated benefits and synergies may not materialize; |
• | diversion of management time and focus from operating our business to addressing acquisition integration challenges; |
• | retention of employees from the acquired company; |
• | cultural challenges associated with integrating employees from the acquired company into our organization; |
• | integration of the acquired company’s products and technology; |
• | integration of the acquired company’s accounting, management information, human resources and other administrative systems; |
• | the need to implement or improve controls, procedures and policies at a business that prior to the acquisition may have lacked effective controls, procedures and policies; |
• | coordination of product development and sales and marketing functions; |
• | liability for activities of the acquired company before the acquisition, including relating to privacy and data security, patent and trademark infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities; and |
• | litigation or other claims in connection with the acquired company, including claims from terminated employees, users, former stockholders or other third parties. |
• | the liability of online service providers for actions by customers, including fraud, illegal content, spam, phishing, libel and defamation, hate speech, infringement of third-party intellectual property and other abusive conduct; |
• | other claims based on the nature and content of Internet materials; |
• | user data privacy and security issues; |
• | consumer protection risks; |
• | digital marketing aspects; |
• | characteristics and quality of services; |
• | our ability to automatically renew the premium subscriptions of our users; |
• | cross-border e-commerce issues; and |
• | ease of access by our users to our product offerings, including RAMP. |
• | the impact of the COVID-19 pandemic on our financial condition and the results of operations; |
• | our operating and financial performance and prospects; |
• | our quarterly or annual earnings or those of other companies in our industry compared to market expectations; |
• | conditions that impact demand for our products; |
• | future announcements concerning our business, our customers’ businesses or our competitors’ businesses; |
• | the public’s reaction to our press releases, other public announcements and filings with the SEC; |
• | the size of our public float; |
• | coverage by or changes in financial estimates by securities analysts or failure to meet their expectations; |
• | market and industry perception of our success, or lack thereof, in pursuing our growth strategy; |
• | strategic actions by us or our competitors, such as acquisitions or restructurings; |
• | changes in laws or regulations that adversely affect our industry or us; |
• | changes in accounting standards, policies, guidance, interpretations or principles; |
• | changes in senior management or key personnel; |
• | issuances, exchanges or sales, or expected issuances, exchanges or sales, of our capital stock; |
• | changes in our dividend policy; |
• | adverse resolution of new or pending litigation against us; and |
• | changes in general market, economic and political conditions in the United States and global economies or financial markets, including those resulting from natural disasters, terrorist attacks, acts of war and responses to such events. |
• | the ability to maintain, grow, process, utilize and protect the data we collect from consumers; |
• | the ability to maintain our relationships with its network partners and advertisers; |
• | the performance of our responsive acquisition marketing platform, or RAMP; |
• | changes in client demand for our services and our ability to adapt to such changes; |
• | the ability to maintain and attract consumers and advertisers in the face of changing economic or competitive conditions; |
• | the COVID-19 pandemic or other public health crises; |
• | the ability to improve and maintain adequate internal controls over financial and management systems, and remediate identified material weaknesses; |
• | the ability to successfully source and complete acquisitions and to integrate the operations of companies System1 acquires; |
• | the ability to raise financing in the future as and when needed or on market terms; |
• | the ability to compete with existing competitors and the entry of new competitors in the market; |
• | changes in applicable laws or regulations and the ability to maintain compliance; |
• | the ability to protect our intellectual property rights; and |
• | other risks and uncertainties indicated from time to time in our filings with the SEC, including those described herein under the heading “Risk Factors.” |
• | The acquisition of S1 Holdco and Protected UK by Trebia, resulting reorganization into an umbrella partnership C-corporation structure, and other agreements entered into as part of the Business Combination Agreement as of June 28, 2021 and amended on November 30, 2021, by and among Trebia, S1 Holdco, and Protected UK (collectively, the “Companies”), the Blockers, the Blocker Merger Subs and the Company Merger Sub (the “Business Combination”); |
• | Repayment of the existing S1 Holdco debt and entering into a financing agreement. |
• | The historical audited financial statements of Trebia for the year ended December 31, 2021; |
• | The historical audited consolidated financial statements of S1 Holdco for the year ended December 31, 2021; and |
• | The historical audited consolidated financial statements of Protected UK for the year ended December 31, 2021. |
Equity Capitalization Summary |
Shares |
% |
||||||
Trebia Shareholders (1) |
703,108 | 1 | % | |||||
Founder Shares(2) |
6,574,486 | 6 | % | |||||
Seller Equity Consideration(3) |
72,328,135 | 68 | % | |||||
Cannae Backstops (4) |
27,181,771 | 25 | % | |||||
|
|
|
|
|||||
Total Outstanding Common Stock(5) |
106,787,500 | 100 | % | |||||
|
|
|
|
(1) | 51,046,892 shares of the 51,750,000 outstanding shares of Trebia Class A Common Stock were redeemed in connection with the Business Combination. |
(2) | The Sponsors have agreed to forfeit up to 3,463,014 (in the aggregate) shares of Trebia Class B Common Stock in connection with the equity backstop commitments by Cannae and S1 Holdco and Protected UK |
Management and Sponsor Agreement. BGPT Sponsor and Trasimene Sponsor have each also agreed to forfeit 1,450,000 shares of Trebia Class B Common Stock (the “Class B Forfeiture”) (2,900,000 in the aggregate). |
(3) | The S1 Holdco and Protected UK sellers will receive 72,328,135 shares of Trebia Class A and Class C Ordinary Shares. This includes the impact of vesting of restricted stock units of 3,079,274. Additionally, this includes the Flow-Through Sellers’ noncontrolling economic interest in Common Units of S1 Holdco, LLC and issuance of voting, non-economic Class C Common Stock in Trebia of 22,077,423 which will be exchangeable (together with the cancellation of an equal number of shares of Class C common stock) into Class A common stock on a 1-for-1 |
(4) | 24,648,446 shares of Class A Ordinary Common Stock are issued to Cannae at $10.00 per share, pursuant to the Cannae Backstop and Cannae Incremental Backstop Agreements. Additionally, Cannae received an additional 2,533,325 of the Founders’ Forfeiture shares, respectively. |
(5) | Excluded from outstanding common stock is the dilutive impact of 17,250,000 Public Warrants and 8,233,334 Private Placement Warrants exercisable at $11.50 per share, as well as, 725,000 shares of System1 Class D Common Stock to the Sponsors, and 725,000 RSUs subject to a market vesting condition, which have not been met. |
• | System1, Inc. will be the sole managing member of S1 Holdco, and the managing member has full and complete charge of all affairs of S1 Holdco and the existing non-managing members of S1 Holdco do not have substantive kick-out or substantive participating rights. |
• | System1, Inc. acquires all of the outstanding stock of Protected UK in exchange for cash and equity consideration. |
• | No single party will have the ability to nominate a majority of the members of the Board of Directors of System1, Inc. |
• | No individual legal entity or shareholder controlled S1 Holdco and Protected UK before the Business Combination. |
• | No individual legal entity or shareholder will control System1, Inc. following the Business Combination. |
As of December 31, 2021 |
||||||||||||||||||||||||
Trebia |
S1 Holdco |
Protected UK as Adjusted (Note 1) |
Pro Forma Adjustments |
Notes |
Pro Forma Combined |
|||||||||||||||||||
Assets |
||||||||||||||||||||||||
Current assets: |
||||||||||||||||||||||||
Cash and cash equivalents |
$ | 53 | $ | 47,896 | $ | 35,067 | $ | (36,854 | ) | 3 | (a) | $ | 46,162 | |||||||||||
Restricted cash |
— | 743 | 1, 333 | 5,895 | 3 | (a) | 7,971 | |||||||||||||||||
Cash held in Trust |
517,500 | — | — | (517,500 | ) | 3 | (b) | — | ||||||||||||||||
Accounts receivable, net of allowance for doubtful accounts |
— | 90,203 | — | — | 90,203 | |||||||||||||||||||
Prepaid expenses and other current assets |
67 | 7,689 | 562 | (131 | ) | 8,187 | ||||||||||||||||||
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|
|
|
|
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|
|
|
|||||||||||||||
Total current assets |
517,620 | 146,531 | 36,962 | (548,590 | ) | 152,523 | ||||||||||||||||||
Property and equipment - net |
— | 830 | 616 | — | 1,446 | |||||||||||||||||||
Internal-use software development cost - net |
— | 11,213 | — | — | 11,213 | |||||||||||||||||||
Intangible assets - net |
— | 50,368 | 369 | 454,163 | 3 | (c) | 504,900 | |||||||||||||||||
Deferred tax assets |
— | — | 17,237 | (17,237 | ) | 3 | (k) | — | ||||||||||||||||
Goodwill |
— | 44,819 | 284 | 697,974 | 3 | (c) | 743,077 | |||||||||||||||||
Due from related parties |
— | 2,469 | 33,082 | (33,082 | ) | 3 | (l) | 2,469 | ||||||||||||||||
Other assets |
— | 298 | — | — | 298 | |||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|||||||||||||||
Total assets |
$ |
517,620 |
$ |
256,528 |
$ |
88,550 |
$ |
553,228 |
$ |
1,415,926 |
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|
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Liabilities and stockholders’ equity |
||||||||||||||||||||||||
Current liabilities: |
||||||||||||||||||||||||
Accounts payable |
— | 72,846 | 216 | — | 73,062 | |||||||||||||||||||
Accrued expenses and other current liabilities |
12,557 | 31,051 | 22,103 | (9,788 | ) | 3 | (d) | 55,923 | ||||||||||||||||
Due to related party |
— | — | 22 | (22 | ) | 3 | (l) | — | ||||||||||||||||
Deferred revenue |
— | 1,971 | 57,571 | (37,456 | ) | 3 | (e) | 22,086 | ||||||||||||||||
Notes payable, current |
450 | 170,071 | 2,813 | (152,884 | ) | 3 | (f) | 20,450 | ||||||||||||||||
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|
|
|
|
|
|
|
|||||||||||||||
Total current liabilities |
13,007 | 275,939 | 82,725 | (200,150 | ) | 171,521 | ||||||||||||||||||
Tax receivable agreement liability |
— | — | — | — | 3 | (g) | — | |||||||||||||||||
Deferred tax liability |
— | 7,789 | — | 69,052 | 3 | (k) | 76,841 | |||||||||||||||||
Notes payable, noncurrent |
— | — | 10,546 | 345,454 | 3 | (f) | 356,000 | |||||||||||||||||
Tax agreement receivable agreement liability |
— | — | — | — | 3 | (g) | — | |||||||||||||||||
Other liabilities |
— | 1,201 | — | (1,201 | ) | 3 | (h) | |||||||||||||||||
Warrant liability |
29,306 | — | — | — | 29,306 | |||||||||||||||||||
Deferred underwriting fee payable |
18,113 | — | — | (18,113 | ) | 3 | (a) | — | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total liabilities |
60,426 |
284,929 |
93,271 |
195,042 |
633,668 |
|||||||||||||||||||
Class A Ordinary Shares subject to possible redemption, 51,750,000 shares at redemption value at December 31, 2021 |
517,500 | — | — | (517,500 | ) | 3 | (i) | — | ||||||||||||||||
Stockholders’ equity |
||||||||||||||||||||||||
Preferred shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding |
— | — | 11 | (11 | ) | 3 | (i) | — | ||||||||||||||||
Class A Common Stock |
— | — | — | 9 | 3 | (i) | 9 | |||||||||||||||||
Class B Common Stock |
1 | — | 11 | (12 | ) | 3 | (i) | — | ||||||||||||||||
Class C Common Stock |
— | — | — | 2 | 3 | (i) | 2 | |||||||||||||||||
Additional paid-in capital |
— | — | 40,953 | 621,205 | 3 | (i) | 662,158 | |||||||||||||||||
Accumulated deficit |
(60,307 |
) |
— |
(45,696 |
) |
38,434 |
3 |
(i) |
(67,569 |
) | ||||||||||||||
Member’s deficit |
— | (28,829 | ) | — | 28,829 | 3 | (i) | — | ||||||||||||||||
Accumulated other comprehensive income |
— | 428 | — | (428 | ) | 3 | (i) | — | ||||||||||||||||
Noncontrolling interest |
— | — | — | 187,658 | 3 | (j) | 187,658 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total shareholders’ equity |
457,194 | (28,401 | ) | (4,721 | ) | 358,186 | 782,258 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total liabilities and shareholders’ equity |
$ | 517,620 | $ | 256,528 | $ | 88,550 | 553,228 | $ | 1,415,926 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
For the Year Ended December 31, 2021 |
||||||||||||||||||||||||
Trebia |
S1 Holdco |
Protected UK as Adjusted (Note 1) |
Pro Forma Adjustments |
Notes |
Pro Forma Combined |
|||||||||||||||||||
Revenue |
$ | — | $ | 688,389 | $ | 144,541 | $ | (37,456 | ) | 4 | (a) | $ | 795,474 | |||||||||||
Operating costs and expenses: |
||||||||||||||||||||||||
Cost of revenues |
— | 521,113 | 96,364 | 617,477 | ||||||||||||||||||||
Formation and operating costs |
13,327 | — | — | — | 13,327 | |||||||||||||||||||
Salaries, commissions, and benefits |
— | 66,747 | 7,938 | 13,926 | 4 | (b) | 88,611 | |||||||||||||||||
Selling, general and administrative |
— | 35,812 | 11,974 | 13,380 | 4 | (c) | 61,166 | |||||||||||||||||
Depreciation and amortization |
— | 13,885 | 245 | 62,232 | 4 | (d) | 76,362 | |||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Total operating costs and expenses |
13,327 | 637,557 | 116,520 | 856,942 | ||||||||||||||||||||
Operating Income (loss) |
(13,327 | ) | 50,832 | 28,021 | (61,468 | ) | ||||||||||||||||||
Interest expense |
— | 16,870 | 583 | 8,653 | 4 | (e) | 26,106 | |||||||||||||||||
Related party interest income |
(941 | ) | 941 | 4 | (f) | — | ||||||||||||||||||
(Gain) on termination of FPA |
(3,160 | ) | — | — | — | (3,160 | ) | |||||||||||||||||
(Gain) on change in fair value of warrant liability |
(23,700 | ) | — | — | — | (23,700 | ) | |||||||||||||||||
(Gain) on change in fair value of FPA liability |
(7,494 | ) | — | — | — | (7,494 | ) | |||||||||||||||||
Other expense (income) |
— | — | — | — | — | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Income (loss) before income tax |
21,027 | 33,962 | 28,379 | (53,220 | ) | |||||||||||||||||||
Income tax expense (benefit) |
— | 965 | (15,173 | ) | (12,128 | ) | 4 | (g) | (26,336 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income (loss) |
21,027 | 32,997 | 43,552 | (26,885 | ) | |||||||||||||||||||
Net income (loss) attributable to noncontrolling interest |
— | — | — | (8,377 | ) | 4 | (h) | (8,377 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income (loss) attributable to controlling interest |
$ | 21,027 | $ | 32,997 | $ | 43,552 | $ | (18,508 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Earnings per share (basic) |
$ | (0.23 | ) | |||||||||||||||||||||
Earnings per share (diluted) |
$ | (0.23 | ) | |||||||||||||||||||||
Weighted average shares outstanding (basic) |
82,233 | |||||||||||||||||||||||
Weighted average shares outstanding (diluted) |
82,233 |
1. |
Basis of pro forma presentation |
As of December 31, 2021 |
||||||||||||||||||
S1 Holdco Presentation |
Protected UK Presentation |
Protected Historical |
Reclassification Adjustment |
Notes |
Protected as Adjusted |
|||||||||||||
Assets |
Assets | |||||||||||||||||
Cash and cash equivalents |
Cash | $ | 35,067 | $ | 35,067 | |||||||||||||
Restricted cash |
1,333 | 1,333 | ||||||||||||||||
Accounts receivable, net of allowance for doubtful accounts |
||||||||||||||||||
Prepaid expenses and other current assets |
Prepaid expenses and other current assets | 546 | 16 | (i) | 562 | |||||||||||||
Deposits | 16 | (16 | ) | (i) | — | |||||||||||||
Total current assets |
Total current assets | 36,962 | 36,962 | |||||||||||||||
Property and equipment, net |
Property, plant equipment | 616 | 616 | |||||||||||||||
Internal-use software |
||||||||||||||||||
Development cost, net |
||||||||||||||||||
Intangible assets, net |
Intangible Assets | 369 | 369 | |||||||||||||||
Deferred tax assets |
Deferred tax assets | 17,237 | 17,237 | |||||||||||||||
Goodwill |
goodwill | 284 | 284 | |||||||||||||||
Due from Related Party |
Due from related parties | 33,082 | 33,082 | |||||||||||||||
|
|
|
|
|||||||||||||||
Total assets |
total assets | $ | 88,550 | $ | 88,550 | |||||||||||||
|
|
|
|
|||||||||||||||
Liabilities and members’ deficit |
Liabilities and Shareholders’ | |||||||||||||||||
Deficit | ||||||||||||||||||
Current liabilities: |
||||||||||||||||||
Accounts payable |
Accounts payable | 216 | 216 | |||||||||||||||
Accrued expenses and other |
||||||||||||||||||
Current liabilities |
Accrued expenses | 10,162 | 11,941 | (ii)(iii) | 22,103 | |||||||||||||
VAT tax liability | 11,404 | (11,404 | ) | (ii) | — | |||||||||||||
Deferred revenue | 57,405 | 166 | (iv) | 57,571 | ||||||||||||||
Related party deferred revenue | 166 | (166 | ) | (iv) | — | |||||||||||||
Notes payable, current |
Current portion of note payable | 2,813 | 2,813 | |||||||||||||||
Due to related party | 23 | 23 | ||||||||||||||||
Refund liability | 537 | (537 | ) | (iii) | — | |||||||||||||
|
|
|
|
|||||||||||||||
Total current liabilities |
Total current liabilities | 82,726 | 82,726 | |||||||||||||||
Notes payable, non-current |
Note payable, net of current | |||||||||||||||||
Portion and deferred financing | ||||||||||||||||||
Costs | 10,546 | 10,546 | ||||||||||||||||
|
|
|
|
|||||||||||||||
Other liabilities |
||||||||||||||||||
Deferred tax liability |
Corporate Tax Liability | |||||||||||||||||
Total liabilities |
Total liabilities | 93,272 | 93,272 | |||||||||||||||
Members’ deficit: |
||||||||||||||||||
Class A Preferred shares | 11 | 11 | ||||||||||||||||
Class B Preferred shares | 11 | 11 | ||||||||||||||||
Additional paid-in capital | 40,953 | 40,953 | ||||||||||||||||
Accumulated deficit | (45,697 | ) | (45,697 | ) | ||||||||||||||
Members’ deficit in S1 Holdco |
||||||||||||||||||
Noncontrolling interest |
||||||||||||||||||
Accumulated other comprehensive income (loss) |
||||||||||||||||||
Total members’ deficit |
Total Shareholders’ deficit | (4,722 | ) | (4,722 | ) | |||||||||||||
|
|
|
|
|||||||||||||||
Total Liabilities and Members’ Deficit |
Total Liabilities and Shareholders’ Deficit | $ | 88,550 | $ | 88,550 | |||||||||||||
|
|
|
|
(i) | “Deposits” of $16 was reclassified to “Prepaid expenses and other current assets” |
(ii) | “VAT tax liability” of $11,404 was reclassified to “Accrued expenses and other current liabilities” |
(iii) | “Refund liability” of $537 was reclassified to “Accrued expenses and other current liabilities” |
(iv) | “Related party deferred revenue” of $166 was reclassified to “Deferred Revenue” |
For the Year Ended December 31, 2021 |
||||||||||||||||
S1 Holdco Presentation |
Protected UK Presentation |
Protected Historical |
Reclassification Adjustment |
Notes |
Protected as Adjusted |
|||||||||||
Revenue |
Revenue | $ | 144,541 | $ | 144,541 | |||||||||||
Operating costs and expenses: |
||||||||||||||||
Cost of revenues |
Cost of revenue | 98,946 | $ | (2,582 | ) | (i) | $ | 96,364 | ||||||||
Gross profit |
Gross profit | 45,595 | 48,177 | |||||||||||||
Operating expenses |
||||||||||||||||
Salaries, commissions, and benefits |
7,938 | (i)(ii) | 7,938 | |||||||||||||
Selling, general, and administrative expenses |
General and administrative expense | 15,912 | (3,938 | ) | (ii)(iii) (iv)(v)(vi) | 11,974 | ||||||||||
Depreciation and amortization |
245 | (iii) | 245 | |||||||||||||
Related party rent expense | 665 | (665 | ) | (iv) | — | |||||||||||
|
|
|
|
|||||||||||||
Total operating costs and expenses |
Total operating expenses Other Operating (Income) Expense | 16,577 | 20,157 | |||||||||||||
Total other Operating (Income) Expense | ||||||||||||||||
Foreign currency transaction (gain)/loss | 1,341 | (1,341 | ) | (v) | — | |||||||||||
Other operating income |
(343 | ) | 343 | (vi) | — | |||||||||||
|
|
|
|
|||||||||||||
Total other operating expense, net | 998 | — | ||||||||||||||
Operating income (loss) |
Operating income | 28,021 | 28,021 | |||||||||||||
Interest expense |
Interest expense | 583 | 583 | |||||||||||||
Related-party interest income | (941 | ) | (941 | ) | ||||||||||||
|
|
|
|
|||||||||||||
Total non-operating income |
(358 | ) | (358 | ) | ||||||||||||
|
|
|
|
|||||||||||||
Income from continuing operations before income tax |
Income before income taxes |
28,379 | 28,379 | |||||||||||||
Income tax expense |
Income tax expense | (15,173 | ) | (15,173 | ) | |||||||||||
|
|
|
|
|||||||||||||
Net income |
Net income | $ | 43,552 | $ | 43,552 | |||||||||||
|
|
|
|
(i) | Salaries, commissions, and benefits of $2,582 was reclassified from “Cost of revenues” to “Salaries, commissions, and benefits” |
(ii) | Salaries, commissions, and benefits of $5,356 was reclassified from “General and administrative expenses” to “Salaries, commissions, and benefits” |
(iii) | Depreciation and amortization expense of $245 was reclassified from “General, and administrative” to “Depreciation and amortization” |
(iv) | Related party rent expense of $665 was reclassified to “Selling, general, and administrative” |
(v) | “Foreign currency and transaction loss (gain) of $1,341 was reclassified to “Selling, general, and administrative” |
(vi) | “Other operating income” of $343 was reclassified to “Selling, general, and administrative” |
2. | Description of the Business Combination |
Purchase Price Allocation (in thousands) |
||||
Fair value of equity consideration |
$ | 400,957 | ||
Cash consideration |
439,686 | |||
Cash paid to extinguish S1 Holdco outstanding credit facility |
175,538 | |||
Fair value of replacement awards attributable to pre-combination service |
7,695 | |||
Acquisition costs paid on behalf of S1 Holdco |
19,875 | |||
|
|
|||
Total consideration |
$ | 1,043,752 | ||
|
|
|||
Cash and cash equivalents |
82,965 | |||
Restricted cash |
2,076 | |||
Accounts receivable |
90,203 | |||
Prepaid expenses and other current assets |
8,120 | |||
Property and equipment |
1,446 | |||
Internal-use software |
11,213 | |||
Intangible assets |
504,900 | |||
Goodwill |
743,076 | |||
Other assets |
2,767 | |||
Accounts payable |
(73,062 | ) | ||
Accrued expenses and other current liabilities |
(43,367 | ) | ||
Deferred revenue |
(22,086 | ) | ||
Deferred tax liability |
(76,841 | ) | ||
Fair value of noncontrolling interest |
(187,658 | ) | ||
|
|
|||
$ | 1,043,752 | |||
|
|
Trademark |
15.0 | $ | 235,400 | |||||
Customer relationships |
8.4 | 88,500 | ||||||
Technology |
7.0 | 181,000 | ||||||
|
|
|||||||
Total |
$ | 504,900 | ||||||
|
|
3. | Adjustments to Pro Forma Condensed Combined Balance Sheet |
(a) | Below is a table to describe the cash sources and use of funds as it relates to the Business Combination: |
Sources |
||||
Cash held in Trust(1) |
$ | 517,500 | ||
New Term Loan(2) |
376,000 | |||
Cannae Backstop Commitment(3) |
246,484 | |||
Uses |
||||
Cash paid for redemptions(1) |
510,469 | |||
Cash consideration to Court Square Capital(4) |
250,362 | |||
Cash consideration to S1 Holdco and Protected UK(5) |
189,325 | |||
Cash held in escrow for replacement awards granted(6) |
5,895 | |||
Cash to payoff existing S1 Holdco debt(7) |
175,538 | |||
Transaction costs(8) |
45,249 | |||
|
|
|||
Pro forma adjustment to cash and cash equivalents |
$ | (36,854 | ) | |
|
|
(1) | $517.5 million of cash held in trust by Trebia. 51,046,892 Public Shares were redeemed in connection with the Business Combination for $510.5 million. |
(2) | $376 million in net proceeds received from the $400 million New Term Loan obtained by Trebia under the Credit Agreement. |
(3) | Represents the cash proceeds of $246.5 million received under the Cannae Backstop and Incremental Backstop Agreements. |
(4) | Represents the cash proceeds of $250 million paid to blocker-seller Court Square Capital. |
(5) | Represents the cash proceeds paid to S1 Holdco and Protected UK sellers. |
(6) | Represents unvested cash compensation held in trust account until employee service condition is completed. |
(7) | Represents the amount of existing S1 Holdco debt paid off at Closing. |
(8) | Estimated transaction costs incurred by Trebia, S1 Holdco in connection with the Business Combination. The table below details the nature of the transaction costs incurred: |
Transaction costs (in thousands) |
||||
Deferred Underwriter fees paid by Trebia |
$ | 11,773 | ||
Acquisition costs incurred by S1 Holdco and Protected UK |
20,097 | |||
Acquisition costs incurred by Trebia |
13,380 | |||
|
|
|||
Total transaction costs |
$ | 45,249 | ||
|
|
(b) | Reflects the reclassification of $517.5 million of cash and cash equivalents held in the Trust Account that become available for transaction expenses, underwriting commission, redemption of Trebia Public Shares and the operating activities of Trebia following the business combination. |
(c) | Represents the adjustment to the estimated preliminary purchase price allocation for the S1 Holdco business resulting from the Business Combination. The preliminary calculation of total consideration and allocation of the purchase price to the fair value of S1 Holdco’s assets acquired and liabilities assumed is presented below as if the Business Combination was consummated on December 31, 2021. The Company has not completed the detailed valuations necessary to estimate the fair value of the assets acquired and the liabilities assumed and, accordingly, the adjustments to record the assets acquired and liabilities assumed at fair value reflect the best estimates of the Company based on the information currently available and are subject to change once additional analyses are completed. Potential differences may include, but are not limited to, changes in allocation to intangible assets and change in fair value of property, plant, and equipment. |
Intangibles (in thousands) |
As of December 31, 2021 |
|||
Remove carrying value of historical balance |
$ | (50,737 | ) | |
Record fair value of acquired intangibles |
504,900 | |||
|
|
|||
Pro forma adjustment |
$ | 454,163 | ||
|
|
|||
As of December 31, 2021 |
||||
Goodwill (in thousands) |
||||
Remove carrying value of historical balance |
$ | (45,103 | ) | |
Goodwill recorded at acquisition |
743,077 | |||
|
|
|||
Pro forma adjustment |
$ | 697,974 | ||
|
|
(d) | To record assumed liability for cash settled replacement awards attributable to pre-combination service. The liability was determined as the fair value of the replaced awards multiplied by the ratio of the pre-combination employee’s service period to the total service period. Additionally, to remove profit interest liability payable to the former CEO of S1 Holdco, which was settled in connection to the Business Combination. |
As of December 31, 2021 |
||||
Assumed liability for replacement awards cash settled and attributable to precombination service |
$ | 1,473 | ||
To remove historical CEO profit interest liability payable to the former CEO of S1 Holdco settled in connection to the Business Combination |
(11,129 | ) | ||
Other current liabilities |
(132 | ) | ||
|
|
|||
Pro forma adjustment |
$ | (9,788 | ) | |
|
|
(e) | Reflects a reduction in deferred revenues related to the estimated fair value of the acquired deferred revenue related to the Business Combination. The adjustment is based on fair value estimates for deferred revenue, which was estimated utilizing an income approach based on the estimated costs to fulfill the liabilities assumed, plus normal profit margin. The difference between the fair value of deferred revenue and historical carrying value results in a revenue reduction on a pro forma basis. |
To remove carrying value of deferred revenue |
$ | (59,542 | ) | |
To record fair value of deferred revenue liability assumed |
22,086 | |||
|
|
|||
Pro forma adjustment |
$ | (37,456 | ) | |
|
|
(f) | Represents adjustments to short-term and long-term debt due to the following inflows and outflows as a result of the Business Combination. In connection with the Business Combination the outstanding debt of S1 Holdco and Protected UK will be paid off. The cash paid to settle the outstanding Protected UK debt will be a reduction of the cash consideration. The following pro forma adjustments are to give effect to the settlement of the outstanding S1 Holdco and Protected UK debt and issuance of the new Term Loan under the Commitment Letter: |
As of December 31, 2021 |
||||||||||||
Notes payable, current |
Notes payable, noncurrent |
Total |
||||||||||
Record New Credit Facility |
$ | 20,000 | $ | 356,000 | $ | 376,000 | ||||||
Repayment of S1 Holdco and Protected UK outstanding debt |
(172,844 | ) | (10,546 | ) | (183,430 | ) | ||||||
|
|
|
|
|
|
|||||||
Pro forma adjustment |
$ | (152,884 | ) | $ | 345,454 | $ | 192,570 | |||||
|
|
|
|
|
|
(g) | The estimate of the fair value of the Tax Receivable Agreement contingent consideration is subject to additional analyses. The adjustments to the Tax Receivable Agreement will be recorded as an adjustment to goodwill. Trebia anticipates that it will account for the income tax effects resulting from future taxable exchanges of Common Units by the Flow-Through Sellers for shares of Class A common stock thereof by recognizing an increase in deferred tax assets, based on enacted tax rates at the date of each exchange. Based on actual redemption levels, the Company estimates the value of the tax receivable agreement to be approximately $0 as of Closing. |
Further, Trebia intends to evaluate the likelihood that it will realize the benefit represented by the deferred tax asset, and, to the extent that it estimates that it is more likely than not that Trebia will not realize the benefit, Trebia will reduce the carrying amount of the deferred tax asset with a valuation allowance. For the same reasons, the Company will not record a liability related to the tax savings it would realize from the utilization of such deferred tax assets after concluding it will not be probable that such TRA liability would be paid based on its estimates of future taxable income. |
(h) | To adjust Other liabilities to remove deferred rent leased facilities of S1 Holdco. |
(i) | The following table summarizes the pro forma adjustments impacting equity (amounts in thousands) as of December 31, 2021: |
Adjustments to Historical Equity (1) |
New Equity Structure (2) |
Other Items (3) |
Total Pro Forma Adjustments |
|||||||||||||
Trebia Class A Common Stock |
$ | — | $ | (517,500 | ) | $ | (517,500 | ) | ||||||||
Protected UK Class A Preferred shares |
(11 | ) | (11 | ) | ||||||||||||
System1, Inc Class A Common Stock |
9 | 9 | ||||||||||||||
Protected UK and Trebia Class B Stock |
(12 | ) | (12 | ) | ||||||||||||
System1, Inc Class C Common Shares |
2 | 2 | ||||||||||||||
Additional paid in capital |
(40,953 | ) | 662,158 | 621,205 | ||||||||||||
Accumulated Deficit |
45,696 | (7,262 | ) | 38,434 | ||||||||||||
S1 Holdco Member Deficit |
28,829 | 28,829 | ||||||||||||||
S1 Holdco Accumulated other comprehensive loss |
(428 | ) | (428 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 33,121 | 144,669 | (7,262 | ) | 170,528 | |||||||||||
|
|
|
|
|
|
|
|
(1) | To remove historical equity balances and retained earnings of S1 Holdco and Protected UK, as well as, the conversion of Founder Shares, net of forfeiture, from Trebia Class B Common Stock to System1 Class A Common Stock. |
(2) | Includes equity consideration payable under the Business Combination Agreement with a fair value of $401 million, $246 million issued under the Cannae Backstop Agreement, Conversion Trebia Class Common Stock of $7 million, less $11 million allocated to par value of common stock, and plus $7.7 million related to Fair value of replacement awards attributable to pre-combination service. |
(3) | Represents a reduction to retained earnings for estimated acquisition costs incurred by Trebia of $14 million, less the reduction of Trebia deferred underwriter costs of $7 million. |
(j) | Represents the pro forma adjustment to record the Flow-Through Sellers’ noncontrolling interest in S1 Holdco Common Units of $188 million or approximately 22%. |
(k) | Represents adjustments to reflect applicable deferred taxes. Refer to Note 2 for the purchase price allocation. The deferred taxes are primarily related to the difference between the financial statement and tax basis in the System1 partnership interests, acquired tax attributes of the Blockers, and Protected. This basis difference primarily results from the Business Combination where System1, Inc. recorded a fair market value basis on all assets for financial accounting purposes and a fair value step-up on a portion of the assets for income tax purposes. The $76.8 million adjustment related to the deferred tax liability is assuming: (1) the U.S. GAAP balance sheet as of December 31, 2021 adjusted for the pro forma entries described herein, (2) estimated tax basis as of December 31, 2021 adjusted for the pro forma entries described herein, (3) a federal income tax rate of 21.0% and a blended state tax rate of 2.35%, and the applicable statutory tax rates in the jurisdictions in which the Company operates (4) no material changes in tax law. |
(l) | Represents amounts due from(to) related party loans that were settled as a result of the Business Combination. |
4. |
Adjustments to Pro Forma Condensed Combined Statements of Operations |
Explanations | of the adjustments to the pro forma statement of operations are as follows: |
Revenues (in thousands) |
December 31, 2021 |
|||
Revenues pro forma adjustment |
$ | (37,456 | ) |
Salaries, commissions, and benefits (in thousands) |
For the year ended December 31, 2021 |
|||
Stock-based compensation related to the fair value replacement awards attributable to post combination service |
$ | 14,339 | ||
Pro forma Adjustment |
(413 | ) | ||
|
|
|||
To remove historical stock-based compensation |
$ | 13,926 | ||
|
|
Weighted Average Useful Life (Years) |
Fair Value |
For the year ended December 31, 2021 |
||||||||||
Trademarks |
15 | $ | 235,400 | $ | 15,693 | |||||||
Customer relationships |
8.4 | 88,500 | 32,473 | |||||||||
Technology |
7 | 181,000 | 27,641 | |||||||||
|
|
|
|
|||||||||
Total pro forma amortization expense |
504,900 | 75,807 | ||||||||||
To remove historical amortization expense of intangibles |
(13,575 | ) | ||||||||||
|
|
|||||||||||
Pro forma adjustment |
$ | 62,232 |
As of December 31, 2021 |
||||
2022 |
$ | 72,963 | ||
2023 |
60,573 | |||
2024 |
50,962 | |||
2025 |
45,308 | |||
2026 |
37,790 | |||
Thereafter |
161,498 | |||
|
|
|||
Total |
$ | 429,094 | ||
|
|
(in thousands) |
For the year ended December 31, 2021 |
|||
Record interest on the New Term Loan |
$ | 26,107 | ||
Eliminate historical interest expense |
(17,454 | ) | ||
|
|
|||
Pro forma adjustment |
$ | 8,653 | ||
|
|
5. |
Pro Forma Earnings Per Share Information |
For the year ended December 31, 2021 |
||||
Net income (loss) attributable to controlling interest |
$ | (18,508 | ) | |
Weighted average shares outstanding, controlling (basic, shares in thousands) |
82,233 | |||
Weighted average shares outstanding, controlling (diluted, shares in thousands) |
82,233 | |||
Income (loss) per share (basic) |
$ | (0.23 | ) | |
Income (loss) per share (diluted) |
$ | (0.23 | ) |
Year ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
(in thousands except for ratios) |
||||||||||||
Advertising spend |
$ | 509,599 | $ | 327,489 | $ | 260,935 | ||||||
O&O sessions |
3,366,783 | 2,821,726 | 2,992,923 | |||||||||
Network sessions |
1,203,284 | 1,520,367 | 1,258,985 | |||||||||
O&O CPS |
$ | 0.15 | $ | 0.12 | $ | 0.09 | ||||||
O&O RPS |
$ | 0.19 | $ | 0.16 | $ | 0.12 | ||||||
Network RPS |
$ | 0.03 | $ | 0.03 | $ | 0.03 | ||||||
Three months ended |
||||||||||||||||||||||||||||||||
December 31, 2021 |
September 30, 2021 |
June 30, 2021 |
March 31, 2021 |
December 31, 2020 |
September 30, 2020 |
June 30, 2020 |
March 31, 2020 |
|||||||||||||||||||||||||
(in thousands except for ratios) |
||||||||||||||||||||||||||||||||
Advertising spend |
$ | 152,653 | $ | 126,404 | $ | 123,244 | $ | 107,298 | $ | 93,800 | $ | 80,217 | $ | 69,406 | $ | 84,066 | ||||||||||||||||
O&O sessions |
999,975 | 859,392 | 766,293 | 741,122 | 691,279 | 644,780 | 670,112 | 815,554 | ||||||||||||||||||||||||
Network sessions |
286,291 | 278,460 | 312,406 | 326,127 | 318,930 | 323,878 | 484,653 | 392,906 | ||||||||||||||||||||||||
O&O CPS |
$ | 0.15 | $ | 0.15 | $ | 0.16 | $ | 0.14 | $ | 0.14 | $ | 0.12 | $ | 0.10 | $ | 0.10 | ||||||||||||||||
O&O RPS |
$ | 0.19 | $ | 0.19 | $ | 0.21 | $ | 0.19 | $ | 0.18 | $ | 0.17 | $ | 0.14 | $ | 0.14 | ||||||||||||||||
Network RPS |
$ | 0.03 | $ | 0.03 | $ | 0.03 | $ | 0.02 | $ | 0.03 | $ | 0.03 | $ | 0.02 | $ | 0.03 |
Year ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
($ in thousands) |
||||||||||||
Net income from continuing operations |
$ | 32,996 | $ | 16,364 | $ | 24,249 | ||||||
Income tax expense |
965 | 1,907 | 702 | |||||||||
Interest expense |
16,870 | 24,351 | 26,033 | |||||||||
Depreciation and amortization |
13,885 | 13,832 | 11,244 | |||||||||
Other expense (1) |
|
147 |
|
|
398 |
|
|
840 |
| |||
Stock-based compensation and distributions to members (2) |
9,591 | 9,474 | 12,246 | |||||||||
Terminated product lines (3) |
|
— |
|
|
556 |
|
|
(1,139 |
) | |||
Costs related to acquisitions/business combinations |
12,833 | 2,358 | 2,265 | |||||||||
Acquisition earnout |
158 | 2,713 | (73 | ) | ||||||||
Severance costs |
615 | 1,080 | 472 | |||||||||
Other costs, including restructuring |
206 | 396 | 87 | |||||||||
|
|
|
|
|
|
|||||||
Adjusted EBITDA |
$ | 88,266 | $ | 73,429 | $ | 76,926 | ||||||
|
|
|
|
|
|
Three months ended |
||||||||||||||||||||||||||||||||
December 31, 2021 |
September 30, 2021 |
June 30, 2021 |
March 31, 2021 |
December 31, 2020 |
September 30, 2020 |
June 30, 2020 |
March 31, 2020 |
|||||||||||||||||||||||||
($ in thousands) |
||||||||||||||||||||||||||||||||
Net income from continuing operations |
$ | 3,113 | $ | 11,368 | $ | 11,772 | $ | 6,743 | $ | 6,952 | $ | 3,892 | $ | (2,029 | ) | $ | 7,549 | |||||||||||||||
Income tax expense |
262 | 475 | 77 | 151 | 1,527 | 198 | (173 | ) | 355 | |||||||||||||||||||||||
Interest expense |
4,162 | 4,185 | 4,237 | 4,286 | 5,781 | 5,741 | 6,332 | 6,497 | ||||||||||||||||||||||||
Depreciation and amortization |
3,625 | 3,458 | 3,113 | 3,689 | 3,082 | 3,331 | 3,889 | 3,530 | ||||||||||||||||||||||||
Other income (1) . |
70 | (25 | ) | 256 | (154 | ) | 196 | 294 | 138 | (229 | ) | |||||||||||||||||||||
Stock-based compensation and distributions to Members (2) |
3,458 | 673 | 3,342 | 2,118 | 3,362 | 1,817 | 2,288 | 2,008 | ||||||||||||||||||||||||
Terminated product lines (3) |
— | — | — | — | — | — | (2 | ) | 559 | |||||||||||||||||||||||
Costs related to business acquisitions/business combinations |
7,970 | 2,755 | 623 | 1,484 | 1,033 | 222 | 71 | 1,032 | ||||||||||||||||||||||||
Acquisition earnout |
32 | 31 | 32 | 63 | 62 | 2,278 | 373 | — | ||||||||||||||||||||||||
Severance costs |
3 | 118 | 164 | 330 | 121 | 393 | 545 | 21 | ||||||||||||||||||||||||
Other costs, including restructuring |
— | 8 | 99 | 99 | 101 | 11 | 185 | 98 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Adjusted EBITDA |
$ | 22,695 | $ | 23,046 | $ | 23,715 | $ | 18,809 | $ | 22,217 | $ | 18,177 | $ | 11,617 | $ | 21,420 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Non-cash adjustments related to foreign exchange and asset disposals |
(2) | Comprised of distributions to equity holders and non-cash stock-based compensation |
(3) | In 2020, S1 Holdco terminated its Social Publishing product line, where it created quiz content primarily for the purpose of display advertising monetization. S1 Holdco has excluded revenue and direct costs associated with this product line for all periods presented. |
Three months ended |
||||||||||||||||||||||||||||||||
December 31, 2021 |
September 30, 2021 |
June 30, 2021 |
March 31, 2021 |
December 31, 2020 |
September 30, 2020 |
June 30, 2020 |
March 31, 2020 |
|||||||||||||||||||||||||
(in thousands except for ratios) |
||||||||||||||||||||||||||||||||
Billings |
$ | 38,443 | $ | 37,632 | $ | 40,473 | $ | 37,991 | $ | 31,126 | $ | 27,758 | $ | 26,458 | $ | 22,529 | ||||||||||||||||
Change in deferred revenue during period |
$ | (671 | ) | $ | (567 | ) | $ | 4,445 | $ | 6,792 | $ | 6,287 | $ | 2,591 | $ | 4,796 | $ | 4,409 | ||||||||||||||
Advertising spend |
$ | 17,986 | $ | 16,966 | $ | 17,884 | $ | 23,626 | $ | 17,562 | 18,059 | $ | 22,467 | $ | 18,575 | |||||||||||||||||
Beginning subscribers |
2,208 | 2,187 | 2,128 | 1,905 | 1,770 | 1,586 | 1,357 | 1,234 | ||||||||||||||||||||||||
Ending subscribers |
2,208 | 2,208 | 2,187 | 2,128 | 1,905 | 1,770 | 1,586 | 1,357 | ||||||||||||||||||||||||
New subscribers |
312 | 298 | 331 | 462 | 324 | 341 | 398 | 275 | ||||||||||||||||||||||||
CTA |
$ | 57.73 | $ | 56.91 | $ | 54.10 | $ | 51.10 | $ | 54.23 | $ | 52.95 | $ | 56.42 | $ | 67.53 | ||||||||||||||||
ARPU |
$ | 17.41 | $ | 17.13 | $ | 18.76 | $ | 18.84 | $ | 16.94 | $ | 16.54 | $ | 17.98 | $ | 17.39 |
Year ended December 31, |
||||||||
($ in thousands) |
2021 |
2020 |
||||||
Net income (loss) |
$ | 43,551 | $ | (13,258 | ) | |||
Income tax benefit |
(15,173 | ) | — | |||||
Interest expense, net |
(358 | ) | 435 | |||||
Depreciation and amortization |
245 | 141 | ||||||
Terminated product lines (1) |
81 | (1,777 | ) | |||||
Costs related to acquisitions/business combinations, primarily related to SPAC transaction costs |
1,690 | 32 | ||||||
Non-cash foreign exchange adjustments |
1,341 | 110 | ||||||
VAT accrual for previously uncollected VAT |
4,675 | 2,934 | ||||||
Director salary payments |
2,806 | — | ||||||
Other costs, including restructuring costs |
— | 458 | ||||||
|
|
|
|
|||||
Adjusted EBITDA |
$ | 38,858 | $ | (10,925 | ) | |||
|
|
|
|
Three months ended |
||||||||||||||||||||||||||||||||
($ in thousands) |
December 31, 2021 |
September 30, 2021 |
June 30, 2021 |
March 31, 2021 |
December 31, 2020 |
September 30, 2020 |
June 30, 2020 |
March 31, 2020 |
||||||||||||||||||||||||
Net income (loss) |
$ |
27,653 |
$ |
10,047 |
$ |
7,489 |
$ |
(1,638 |
) |
$ |
(394 |
) |
$ |
1,108 |
$ |
(8,184 |
) |
$ |
(5,789 |
) | ||||||||||||
Income tax expense/(benefit) |
(16,139 |
) |
966 |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||
Interest expense, net |
(56 | ) | (131 | ) | (165 | ) | (6 | ) | 93 | 131 | 176 | 35 | ||||||||||||||||||||
Depreciation and amortization |
73 | 69 | 65 | 39 | 37 | 35 | 35 | 34 | ||||||||||||||||||||||||
Terminated product lines (1) |
(13 |
) |
29 |
3 |
62 |
(336 |
) |
(1,691 |
) |
86 |
163 |
|||||||||||||||||||||
Costs related to acquisitions/business combinations, primarily related to SPAC transaction costs |
699 | 196 | 499 | 297 | 32 | — | — | — | ||||||||||||||||||||||||
Non-cash foreign exchange adjustments |
228 |
581 |
209 |
322 |
(194 |
) |
46 |
68 |
190 |
|||||||||||||||||||||||
VAT accrual for previously uncollected VAT |
956 | 1,110 | 1,492 | 1,116 | 615 | 866 | 1,408 | 46 | ||||||||||||||||||||||||
Director salary payments |
922 | 936 | 949 | — | — | — | — | |||||||||||||||||||||||||
Other costs, including restructuring charges |
— | — | — | 424 | 34 | — | — | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Adjusted EBITDA |
$ | 14,323 | $ | 13,803 | $ | 10,541 | $ | 192 | $ | 277 | $ | 529 | $ | (6,411 | ) | $ | (5,320 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Protected terminated its Network Protect VPN product. Protected has excluded revenue, direct costs and operating expenses associated with this product line from Adjusted EBITDA for all periods presented. |
For Years Ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Revenue: |
||||||||||||
Owned and Operated |
$ | 652,884 | $ | 437,501 | $ | 369,570 | ||||||
Partner Network |
35,505 | 38,476 | 37,923 | |||||||||
|
|
|
|
|
|
|||||||
$ | 688,389 | $ | 475,977 | $ | 407,493 | |||||||
|
|
|
|
|
|
|||||||
For Years Ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Segment Adjusted Gross Profit: |
||||||||||||
Owned and Operated |
$ | 143,284 | $ | 110,012 | $ | 108,635 | ||||||
Partner Network |
35,505 | 38,476 | 37,923 | |||||||||
|
|
|
|
|
|
|||||||
$178,789 | $148,488 | $146,558 | ||||||||||
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||
($ in thousands) |
2021 |
2020 |
2019 |
|||||||||
Revenue |
$ | 688,389 | $ | 475,977 | $ | 407,493 | ||||||
Operating expenses: |
||||||||||||
Cost of revenues |
521,113 | 340,996 | 275,770 | |||||||||
Salaries, commissions, and benefits |
66,747 | 55,548 | 48,389 | |||||||||
Selling, general, and administrative |
35,813 | 22,979 | 19,960 | |||||||||
Depreciation and amortization |
13,885 | 13,832 | 11,244 | |||||||||
|
|
|
|
|
|
|||||||
Total operating expenses |
637,558 | 433,355 | 355,363 | |||||||||
Operating income |
50,831 | 42,622 | 52,130 | |||||||||
Interest expense |
16,870 | 24,351 | 26,033 | |||||||||
Other expense |
— | — | 1,146 | |||||||||
|
|
|
|
|
|
|||||||
Income from continuing operations before income tax |
33,961 | 18,271 | 24,951 | |||||||||
Income tax expense |
965 | 1,907 | 702 | |||||||||
Net income from continuing operations |
32,996 | 16,364 | 24,249 | |||||||||
Income (loss) from discontinued operations, net of taxes |
— | 47,397 | (15,454 | ) | ||||||||
|
|
|
|
|
|
|||||||
Net income (loss) |
$ | 32,996 | $ | 63,761 | $ | 8,795 | ||||||
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Revenue |
100 | % | 100 | % | 100 | % | ||||||
Operating expenses: |
||||||||||||
Cost of revenues |
76 | 72 | 68 | |||||||||
Salaries, commissions, and benefits |
10 | 12 | 12 | |||||||||
Selling, general, and administrative |
5 | 5 | 5 | |||||||||
Depreciation and amortization |
2 | 3 | 3 | |||||||||
Total operating expenses |
93 | 92 | 87 | |||||||||
Operating income |
7 | 9 | 13 | |||||||||
Interest expense |
2 | 5 | 6 | |||||||||
Other expense (income) |
— | — | — | |||||||||
Income from continuing operations before income tax |
5 | 4 | 6 | |||||||||
Income tax expense (benefit) |
— | — | — | |||||||||
Net income from continuing operations |
5 | 3 | 6 | |||||||||
Income (loss) from discontinued operations, net of taxes |
— | 10 | (4 | ) | ||||||||
Net income (loss) |
5 | % | 13 | % | 2 | % |
Year Ended December 31, |
2021 vs 2020 Change |
2020 vs 2019 Change |
||||||||||||||||||||||||||
2021 |
2020 |
2019 |
$ |
% |
$ |
% |
||||||||||||||||||||||
( in thousands, except percentages ) |
||||||||||||||||||||||||||||
Revenue……………………………………… |
$ | 688,389 | $ | 475,977 | $ | 407,493 | $ | 212,412 | 45 | % | $ | 68,484 | 17 | % |
Year Ended December 31, |
2021 vs 2020 Change |
2020 vs 2019 Change |
||||||||||||||||||||||||||
2021 |
2020 |
2019 |
$ |
% |
$ |
% |
||||||||||||||||||||||
(in thousands, except percentages) |
||||||||||||||||||||||||||||
Cost of revenue |
$ | 521,113 | $ | 340,996 | $ | 275,770 | $ | 180,117 | 53 | % | $ | 65,226 | 24 | % | ||||||||||||||
Percent of revenue |
76 | % | 72 | % | 68 | % |
Year Ended December 31, |
2021 vs 2020 Change |
2020 vs 2019 Change |
||||||||||||||||||||||||||
2021 |
2020 |
2019 |
$ |
% |
$ |
% |
||||||||||||||||||||||
(in thousands, except percentages) |
||||||||||||||||||||||||||||
Salaries, commissions, and benefits |
$ | 66,747 | $ | 55,548 | $ | 48,389 | $ | 11,199 | 20 | % | $ | 7,159 | 15 | % | ||||||||||||||
Percent of revenue |
10 | % | 12 | % | 12 | % |
Year Ended December 31, |
2021 vs 2020 Change |
2020 vs 2019 Change |
||||||||||||||||||||||||||
2021 |
2020 |
2019 |
$ |
% |
$ |
% |
||||||||||||||||||||||
(in thousands, except percentages) |
||||||||||||||||||||||||||||
Selling, general, and administrative |
$ | 35,813 | $ | 22,979 | $ | 19,960 | $ | 12,834 | 56 | $ | 3,019 | 15 | % | |||||||||||||||
Percent of revenue |
5 | % | 5 | % | 5 | % |
Year Ended December 31, |
2021 vs 2020 Change |
2020 vs 2019 Change |
||||||||||||||||||||||||||
2021 |
2020 |
2019 |
$ |
% |
$ |
% |
||||||||||||||||||||||
(in thousands, except percentages) |
||||||||||||||||||||||||||||
Depreciation and amortization |
$ | 13,885 | $ | 13,832 | $ | 11,244 | $ | 53 | — | % | $ | 2,588 | 23 | % | ||||||||||||||
Percent of revenue |
2 | % | 3 | % | 3 | % |
Year Ended December 31, |
2021 vs 2020 Change |
2020 vs 2019 Change |
||||||||||||||||||||||||||
2021 |
2020 |
2019 |
$ |
% |
$ |
% |
||||||||||||||||||||||
(in thousands, except percentages) |
||||||||||||||||||||||||||||
Interest expense |
$ | 16,870 | $ | 24,351 | $ | 26,033 | $ | (7,481 | ) | (31 | )% | $ | (1,682 | ) | (6 | )% |
Year Ended December 31, |
2021 vs 2020 Change |
2020 vs 2019 Change |
||||||||||||||||||||||||||
2021 |
2020 |
2019 |
$ |
% |
$ |
% |
||||||||||||||||||||||
(in thousands, except percentages) |
||||||||||||||||||||||||||||
Other expense |
$ | — | $ | — | $ | 1,146 | $ | — | — | % | $ | (1,146 | ) | (100 | )% |
Year Ended December 31, |
2021 vs 2020 Change |
2020 vs 2019 Change |
||||||||||||||||||||||||||
2021 |
2020 |
2019 |
$ |
% |
$ |
% |
||||||||||||||||||||||
(in thousands, except percentages) |
||||||||||||||||||||||||||||
Provision for income taxes |
$ | 965 | $ | 1,907 | $ | 702 | $ | (942 | ) | (49 | )% | $ | 1,205 | 172 | % | |||||||||||||
Effective tax rate |
3 | % | 10 | % | 3 | % |
Year Ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
($ in thousands) |
||||||||||||
Net cash provided by operating activities |
60,705 | 46,547 | 32,712 | |||||||||
Net cash provided by (used in) investing activities |
(6,535 | ) | 68,166 | (42,757 | ) | |||||||
Net cash provided by (used in) financing activities |
(34,585 | ) | (128,075 | ) | 26,147 |
Payments Due by Period |
||||||||||||||||||||
Less than 1 Year |
1 -3 Years |
3 - 5 Years |
More than 5 Years |
Total |
||||||||||||||||
( in thousands ) |
||||||||||||||||||||
Operating lease obligations |
$ | 1,957 | $ | 3,900 | $ | 1,663 | $ | — | $ | 7,520 |
• | Fair Value of Common Stock: As the Company’s common stock is not publicly traded, the fair value was determined by the Company’s management with input from contemporaneous valuation reports prepared by a third-party valuation specialist. |
• | Expected Term: The expected life of the option is estimated by considering the contractual term of the option, the vesting period of the option, the employees’ expected exercise behavior and the post- vesting employee turnover rate. For non-employees, the expected life equals the contractual term of the option. |
• | Risk-free Interest Rate: The risk-free interest rate is based on published U.S. Treasury Department interest rates for the expected terms of the underlying options. |
• | Volatility: The expected stock price volatility of the underlying shares over the expected term of the option is based upon historical share price data of an index of comparable publicly traded companies. |
Year ended December 31, |
||||||||
($ in thousands) |
2021 |
2020 |
||||||
Revenue |
$ | 144,541 | $ | 90,908 | ||||
Cost of revenues |
98,946 | 97,980 | ||||||
|
|
|
|
|||||
Gross income/(loss) |
45,595 | (7,072 | ) | |||||
Other Operating Income: |
||||||||
Gain on sale of intangible assets |
— | 1,580 | ||||||
Other operating income/(expense) |
(997 | ) | (86 | ) | ||||
|
|
|
|
|||||
Total other operating income/(expense) |
(997 | ) | 1,493 | |||||
Operating Expenses: |
||||||||
General and administrative expense |
15,912 | 6,711 | ||||||
Related party rent expense |
665 | 536 | ||||||
|
|
|
|
|||||
Total Operating Expenses |
16,577 | 7,247 | ||||||
Operating income/(loss) |
28,020 | (12,826 | ) | |||||
Non-operating income (expense) |
||||||||
Related party interest expense |
— | (406 | ) | |||||
Related party interest income |
941 | 2 | ||||||
Interest expense |
(583 | ) | (29 | ) | ||||
|
|
|
|
|||||
Total non-operating income (expense) |
358 | (433 | ) | |||||
|
|
|
|
|||||
Income/(loss) from continuing operations before income taxes |
28,378 | (13,258 | ) | |||||
Income tax benefit |
15,173 | — | ||||||
|
|
|
|
|||||
Net income/(loss) |
$ | 43,551 | $ | (13,258 | ) | |||
|
|
|
|
Year ended December 31, |
||||||||
(as a percentage of revenue) |
2021 |
2020 |
||||||
Revenue |
100 | % | 100 | % | ||||
Cost of revenues |
68 | 108 | ||||||
Gross income/(loss) |
32 | (8 | ) | |||||
Other Operating Income: |
||||||||
Gain on sale of intangible assets |
— | 2 | ||||||
|
|
|
|
|||||
Other operating income/(expense) |
(1 | ) | — | |||||
Total other operating income/(expense) |
(1 | ) | 2 | |||||
Operating Expenses: |
||||||||
General & administrative expenses |
11 | 7 | ||||||
Related party rent expenses |
— | 1 | ||||||
|
|
|
|
|||||
Total Operating Expenses |
11 | 8 | ||||||
Operating loss |
19 | (14 | ) | |||||
Non-operating income (expense) |
||||||||
Related party interest expense |
— | — | ||||||
Related party interest income |
1 | |||||||
Interest expense |
— | — | ||||||
Other income (expense) |
1 | — | ||||||
|
|
|
|
|||||
Total non-operating income/(expense) |
— | — | ||||||
Income/(loss) from continuing operations before income taxes |
20 | (15 | ) | |||||
Income tax benefit |
10 | — | ||||||
|
|
|
|
|||||
Net income (loss) |
30 | (15 | ) | |||||
|
|
|
|
Year ended December 31, |
2021 vs 2020 Change |
|||||||||||||||
($ in thousands, except percentages) |
2021 |
2020 |
$ |
% |
||||||||||||
Revenue |
$ | 144,541 | $ | 90,908 | $ | 53,633 | 59 | % |
Year ended December 31, |
2021 vs 2020 Change |
|||||||||||||||
($ in thousands, except percentages) |
2021 |
2020 |
$ |
% |
||||||||||||
Cost of Revenues |
$ | 98,946 | $ | 97,980 | $ | 966 | 1 | % | ||||||||
Percent of revenue |
68 |
% |
108 |
% |
Year ended December 31, |
2021 vs 2020 Change |
|||||||||||||||
($ in thousands, except percentages) |
2021 |
2020 |
$ |
% |
||||||||||||
Gain on Sale of Intangible Assets |
$ | — | $ | 1,580 | $ | (1,580 | ) | 100 | % | |||||||
Percent of revenue |
0 |
% |
2 |
% |
Year ended December 31, |
2021 vs 2020 Change |
|||||||||||||||
($ in thousands, except percentages) |
2021 |
2020 |
$ |
% |
||||||||||||
General and administrative expenses |
$ | 15,912 | $ | 6,711 | $ | 9,201 | 137 | % | ||||||||
Percent of revenue |
11 |
% |
7 |
% |
Year ended December 31, |
2021 vs 2020 Change |
|||||||||||||||
($ in thousands, except percentages) |
2021 |
2020 |
$ |
% |
||||||||||||
Related party Rent expenses |
$ | 665 | $ | 536 | $ | 129 | 24 | % | ||||||||
Percent of revenue |
0 |
% |
1 |
% |
Year ended December 2021 |
2021 vs 2020 Change |
|||||||||||||||
($ in thousands, except percentages) |
2021 |
2020 |
$ |
% |
||||||||||||
Other operating income/(expenses) |
$ | (997 | ) | $ | (86 | ) | $ | (911 | ) | (1060 | )% | |||||
Percent of revenue |
(1 |
)% |
— |
% |
Yearended December 31, |
2021 vs 2020 Change |
|||||||||||||||
($ in thousands, except percentages) |
2021 |
2020 |
$ |
% |
||||||||||||
Non-Operating Income/(Expense) |
$ | 358 | ($ | 433 | ) | $ | 790 | 182 | % |
Year ended December 31, |
||||||||
($ in thousands) |
2021 |
2020 |
||||||
Net cash provided by/(used in) operating activities |
$ | 43,887 | $ | (84 | ) | |||
Net cash provided used in investing activities |
(22,319 | ) | (8,773 | ) | ||||
Net cash provided by financing activities |
2,976 | 9,850 |
Name |
Age |
Position(s) | ||||
Executive Officers |
||||||
Michael Blend |
54 | Chief Executive Officer & Chairman | ||||
Brian Coppola |
49 | Chief Product Officer | ||||
Paul Filsinger |
47 | President | ||||
Tridivesh Kidambi |
40 | Chief Financial Officer | ||||
Jennifer Robinson |
45 | Chief Technology Officer | ||||
Elizabeth Sestanovich |
57 | Chief People Officer | ||||
Daniel Weinrot |
48 | General Counsel & Corporate Secretary | ||||
Non-Employee Directors |
||||||
John Civantos |
54 | Director | ||||
William P. Foley, II |
77 | Director | ||||
Dexter Fowler |
35 | Director | ||||
Caroline Horn |
51 | Director | ||||
Moujan Kazerani |
46 | Director | ||||
Frank R. Martire, Jr. |
74 | Director | ||||
Christopher Phillips |
36 | Director | ||||
Jennifer Prince |
48 | Director |
• | appointing, compensating, retaining, evaluating, terminating and overseeing our independent registered public accounting firm; |
• | discussing with our independent registered public accounting firm their independence from management; |
• | reviewing with our independent registered public accounting firm the scope and results of their audit; |
• | pre-approving all audit and permissible non-audit services to be performed by our independent registered public accounting firm; |
• | overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the interim and annual financial statements that System1 files with the SEC; |
• | reviewing and monitoring our accounting principles, accounting policies, financial and accounting controls and compliance with legal and regulatory requirements; |
• | establishing procedures for the confidential anonymous submission of concerns regarding questionable accounting, internal controls or auditing matters; and |
• | the performance of our internal function. |
• | reviewing and approving corporate goals and objectives relevant to the compensation of our Chief Executive Officer, evaluating the performance of our Chief Executive Officer in light of these goals and objectives and setting or making recommendations to the Board regarding the compensation of our Chief Executive Officer; |
• | reviewing and setting or making recommendations to our Board regarding the compensation of our other executive officers; |
• | making recommendations to our Board regarding the compensation of our directors; |
• | reviewing and approving or making recommendations to our Board regarding our incentive compensation and equity-based plans and arrangements; and |
• | appointing and overseeing any compensation consultants. |
• | identifying individuals qualified to become members of our Board, consistent with criteria approved by our Board; |
• | recommending to our Board the nominees for election to System1’s Board at annual meetings of our stockholders; |
• | overseeing an evaluation of our Board and its committees; and |
• | developing and recommending to our Board a set of corporate governance guidelines. We believe that the composition and functioning of our nominating and corporate governance committee meets the requirements for independence under the current the NYSE listing standards. |
• | any person who is, or at any time during the applicable period was, one of Our executive officers or a member of Our Board; |
• | any person who is known by System1 to be the beneficial owner of more than 5% of our voting stock; |
• | any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, daughter-in-law, brother-in-law sister-in-law |
• | any firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position or in which such person has a 10% or greater beneficial ownership interest. |
• | Ian Weingarten, Chief Executive Officer (2020-February 2021) |
• | Michael Blend, Chief Executive Officer (February 2021-present) |
• | Tridivesh Kidambi, Chief Financial Officer |
• | Jennifer Robinson, Chief Technology Officer |
Name and Principal Position |
Year |
Salary ($) |
Bonus ($) |
Option Awards ($)(3) |
Non-Equity Incentive Plan Compensation ($) (4) |
All Other Compensation ($) (5) |
Total ($) |
|||||||||||||||||||||
Ian Weingarten |
2021 | $ | 70,769 | (2) | — | — | — | 381,402 | $ | 452,171 | ||||||||||||||||||
Chief Executive Officer (2020) (1) |
2020 | $ | 400,000 | — | — | 104,000 | 10,600 | $ | 514,600 | |||||||||||||||||||
Michael Blend |
2021 | — | — | — | — | — | 0 | |||||||||||||||||||||
Chief Executive Officer (2021) |
2020 | — | — | — | — | — | 0 | |||||||||||||||||||||
Tridivesh Kidambi |
2021 | $ | 300,000 | — | 456,225 | 75,000 | 53,585 | $ | 884,810 | |||||||||||||||||||
Chief Financial Officer |
2020 | $ | 300,000 | — | — | 30,000 | 293,869 | $ | 623,869 | |||||||||||||||||||
Jennifer Robinson |
2021 | $ | 178,846 | (2) | $ | 80,000 | (6) | 251,600 | 75,288 | 5,077 | $ | 590,811 | ||||||||||||||||
Chief Technology Officer |
(1) | Mr. Weingarten terminated employment and ceased to be our Chief Executive Officer, effective as of February 22, 2021, and was succeeded by Michael Blend, who is also our Co-Founder and Executive Chairman of the Board. |
(2) | Amounts paid to Mr. Weingarten and Ms. Robinson reflect the pro-rated amount of their base salary paid to them in 2021, based on the length of their actual employment with us in 2021. |
(3) | Amounts reflect the full grant-date fair value of Series F Units in OpenMail and Value Creation Units (“VCUs”) granted during 2021, computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the named individual. We provide information regarding the assumptions used to calculate the value of grants made to executive officers in our Notes to the consolidated financial statements included in this prospectus. |
(4) | Non-equity incentive plan compensation consists of payments made pursuant to our annual incentive bonus program based on our pro-forma billings-based adjusted EBITDA performance. The 2021 bonus for Ms. Robinson was pro-rated to reflect her partial year of service. Neither Messrs. Weingarten nor Blend participated in our 2021 annual cash incentive program. |
(5) | For fiscal year 2021, all other compensation consists of: |
(6) | Represents a one-time signing bonus paid to Ms. Robinson in connection with her commencement of employment with us in May 2021. |
• | medical, dental and vision benefits; |
• | medical and dependent care flexible spending accounts; |
• | short-term and long-term disability insurance; and |
• | life insurance. |
Option Awards |
Stock Awards | |||||||||||||||||||||
Name |
Grant Date |
Number of Securities Underlying Unexercised Options (#) Exercisable |
Number of Securities Underlying Unexercised Options (#) Unexercisable |
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) |
Option Exercise Price / Distribution Threshold ($) |
Option Expiration Date |
Number of Shares or Units of Stock That Have Not Vested (#) |
Market Value of Shares or Units of Stock That Have Not Vested ($) |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | ||||||||||||
Ian Weingarten |
1/02/2018 (1) | 37,500] | 10.00 | 01/08/2024 | ||||||||||||||||||
4/15/2019 (2) | $2,824,500 | |||||||||||||||||||||
Tridivesh Kidambi |
||||||||||||||||||||||
4/17/2018 (3) | 3,125 | 7.09 | N/A | |||||||||||||||||||
4/18/2018 (1) | 25,000 | 10.00 | 4/19/2024 | |||||||||||||||||||
2/1/2019 (1) | 50,000 | 10.00 | 3/13/2025 | |||||||||||||||||||
2/1/2019 (4) | 300,000 | 9.23 | N/A | |||||||||||||||||||
5/1/2021 (5) | 52,500 | 9.23 | N/A | |||||||||||||||||||
Jennifer Robinson |
5/17/2021 (1) | 100,000 | 10.00 | N/A |
(1) | These S1 Holdco VCUs will fully vest upon satisfaction of both a service-vest and performance-vest (liquidity event) condition. The service-vest condition is satisfied based on continued service as a director of the Company or employment (as applicable) over a four-year period, with 25% of the VCUs service-vesting on the first anniversary of the vesting commencement date and the remaining 75% of the VCUs service-vesting in substantially equal quarterly increments for three years thereafter, subject to continued service or employment (as applicable) through the applicable service vesting date. The performance-vest condition is satisfied upon the occurrence of a change in control or certain public offerings of our securities (or those of our affiliate), in any case, occurring on or prior to the expiration date, which occurs six years from the date of grant. |
(2) | This amount reflects the value of an unvested profits interest granted to Mr. Weingarten in April 2019 (referred to below as the “Profits Interest”) in connection with his initial employment as our former Chief Executive Officer, which entitled Mr. Weingarten to 5% of distributions made by S1 Holdco, LLC after a return on invested capital to its existing investors, subject to a participation threshold of $300,000,000 (which threshold was subject to adjustment as set forth in System1 Holdco, LLC’s operating agreement). The Profits Interest was eligible to vest over a period of four years from the date of grant in substantially equal quarterly increments based on Mr. Weingarten’s continued employment through the applicable vesting date, subject to 50% accelerated vesting upon certain qualifying transactions (based on continued employment through the applicable transaction) and 100% accelerated vesting upon an involuntary termination within three months after a qualifying transaction. A portion of Mr. Weingarten’s Profits Interest was deemed vested in connection with his termination of employment, a portion was forfeited, and a portion remained unvested as of December 31, 2021, in each case, as described below under “Executive Compensation Arrangements.” |
(3) | These Openmail Series B-1 Units are intended to constitute “profits interests” for federal income tax purposes, and vest with respect to 25% of the award on the first anniversary of the vesting start date, and with respect to 75% of the award quarterly thereafter (referred to below as the “Openmail Vesting Schedule”), subject to the executive’s continued service through the applicable vesting date, and vested in full upon the closing of the Business Combination. |
(4) | These Openmail Series F Units are intended to constitute “profits interests” for federal income tax purposes, and vest upon the later of a liquidation event based on continued service through the liquidation event, except that if a liquidation event occurs within four years following the date of grant, then only the number of profits interests that would have vested as of the liquidation event based on the Openmail Vesting Schedule will vest upon the liquidation event, and the remainder of the award will vest on the Openmail Vesting Schedule based on continued service through the applicable vesting date. However, concurrently with the closing of the Business |
Combination, such Series F units were amended such that the Series F units became 50% vested upon the closing of the Business |
Combination, and the remaining 50% will vest in eight equal installments on each of the first eight quarterly anniversaries of the closing thereafter (subject to the applicable executive’s continued employment through such date). |
(5) | These Openmail Series F Units are intended to constitute “profits interests” for federal income tax purposes, and originally vested upon the later of (i) May 1, 2025 or (ii) the date on which Openmail disposes of its entire ownership interest in the applicable executive’s employer, in each case, subject to the applicable executive’s continued employment through the applicable vesting date. However, concurrently with the closing of the Business Combination, such Series F Units were amended such that the Series F Units will vest in full on May 1, 2022 (subject to Mr. Kidambi’s continued employment through such date). |
• | each person known by us to beneficially own more than 5% of the outstanding shares of our Common Stock; |
• | each of our directors; |
• | each of our named executive officers; and |
• | all of our directors and executive officers as a group. |
Name of Beneficial Owner |
Shares of Class A Common Stock+ |
Class A Common Stock Beneficial Ownership Percentage |
Voting Power Percentage++ |
|||||||||
Directors and Executive Officers |
||||||||||||
Michael Blend(1) |
760,000 | * | * | |||||||||
Brian Coppola(2) |
303,055 | * | * | |||||||||
Paul Filsinger(3) |
875,900 | 1.0 | % | * | ||||||||
Tridivesh Kidambi(4) |
929,836 | 1.1 | % | * | ||||||||
Jennifer Robinson |
4,074 | * | * | |||||||||
Elizabeth Sestanovich(5) |
267,436 | * | * | |||||||||
Daniel Weinrot(6) |
98,106 | * | * | |||||||||
John Civantos(7) |
266,146 | * | * | |||||||||
William P. Foley, II(8) |
9,305,129 | 10.3 | % | 8.2 | % | |||||||
Dexter Fowler |
— | — | — | |||||||||
Caroline Horn |
— | — | — | |||||||||
Moujan Kazerani(9) |
73,200 | * | * | |||||||||
Frank R. Martire, Jr.(10) |
5,877,699 | 6.7 | % | 5.3 | % | |||||||
Christopher Phillips(11) |
20,733,184 | 24.0 | % | 19.1 | % | |||||||
Jennifer Prince |
— | — | — | |||||||||
All Directors and Executive Officers (15 Individuals) |
39,493,757 | 40.5 | % | 33.5 | % | |||||||
Greater than 5% Holders |
||||||||||||
Cannae Holdings, LLC(12) |
27,181,770 | 31.9 | % | 25.4 | % | |||||||
Stanley Blend(13) |
16,573,322 | 17.6 | % | 15.4 | % | |||||||
Lone Star Friends Trust(14) |
14,840,169 | 13.3 | % | 11.5 | % | |||||||
Trasimene Trebia, LP(8) |
9,305,122 | 10.3 | % | 8.2 | % | |||||||
BGPT Trebia, LP(10) |
5,877,699 | 6.7 | % | 5.3 | % | |||||||
Nicholas Baker(15) |
7,699,449 | 9.0 | % | 7.2 | % | |||||||
CEE Holdings Trust(16) |
4,599,438 | 5.2 | % | 4.3 | % |
* | Denotes less than 1% |
+ | Represents shares of Class A Common Stock that the stockholders shown (i) beneficially own as of January 27, 2022 or (ii) have the right to acquire (a) upon exercise of Warrants held by the stockholder, |
(b) upon exercise of the stockholder’s redemption right of any Class B Units in S1 Holdco held by such stockholder or (c) upon exercise of vested performance-based restricted stock units (“RSUs”) granted to each of Michael Blend and Just Develop It Limited. The shares included in this column are deemed to be outstanding in calculating the percentage ownership of Class A Common Stock of such stockholder, but are not deemed to be outstanding as to any other stockholder. |
++ | Includes shares that the stockholders shown have the right to acquire as of January 27, 2022 or within 60 days thereafter as described in immediately preceding footnote above. Assumes redemption of all Class B Units by all members of S1 Holdco for shares of Class A Common Stock, which would have resulted in an additional 22,077,319 shares of Class A Common Stock outstanding as of January 27, 2022. Holders of Class B Units of S1 Holdco are entitled to have their Class B Units of S1 Holdco exchanged or redeemed for Class A Common Stock on a one-for-one basis or, at the election of the Company, a cash payment in an amount per Class B Unit of S1 Holdco redeemed and calculated based on the volume weighted average market price of a share of Class A Common Stock at the time of redemption. The Class B Units of S1 Holdco do not have voting rights, but holders of Class B Units of S1 Holdco own a corresponding number of shares of Class C Common Stock of the Company, which have voting rights and vote together with the shares of Class A Common Stock. |
(1) | Consists of 35,000 Public Warrants exercisable for 35,000 shares of Class A Common Stock at an exercise price of $11.50 per share and 725,000 fully vested RSUs, in each case held directly by Mr. Blend. Excludes (i) 172,440 shares of Class A Common Stock and 961,613 shares of Class A Common Stock issuable upon the exchange or redemption of 961,613 Class B Units of S1 Holdco (and cancellation of the corresponding shares of Class C Common Stock of the Company) held by OpenMail2, LLC (“OpenMail2”) and (ii) 45,077 shares of Class A Common Stock and 251,379 Class B Units of S1 Holdco (and the corresponding shares of Class C Common Stock of the Company), in each case, directly held by the Blend Family Foundation. OpenMail2 is jointly controlled by Michael Blend, Charles Ursini and Tridivesh Kidambi as members of the board of managers thereof and they may be deemed to jointly control the voting and dispositive power over the shares held by OpenMail2. The directors of the Blend Family Foundation are Michael Blend, Sandra Blend and Stanley Blend. The Public Warrants by their terms become exercisable (including by cash settlement) 30 days following the Closing Date. The terms of the Public Warrants are set forth in the Warrant Agreement filed with the SEC on June 22, 2020 as Exhibit 4.1 to the Issuer’s Current Report on Form 8-K. The RSUs vested on March 17, 2022, the first trading day on which the volume weighted average price of the Company’s Class A Common Stock exceeded $12.50 per share for 20 trading days within a period of 30 consecutive trading days. |
(2) | Consists of 77,086 shares of Class A Common Stock and 225,969 shares of Class A Common Stock issuable upon the exchange or redemption of 225,969 Class B Units of S1 Holdco (and cancellation of the corresponding shares of Class C Common Stock of the Company) held directly by Mr. Coppolla. |
(3) | Consists of 335,032 shares of Class A Common Stock and 540,868 shares of Class A Common Stock issuable upon the exchange or redemption of 540,868 Class B Units of S1 Holdco (and cancellation of the corresponding shares of Class C Common Stock of the Company) held by Mr. Filsinger. |
(4) | Consists of (i) 15,000 Public Warrants exercisable for 15,000 shares of Class A Common Stock at an exercise price of $11.50 per share held directly by Mr. Kidambi, (ii) 401,489 shares of Class A Common Stock and 436,093 shares of Class A Common Stock issuable upon the exchange or redemption of 436,093 Class B Units of S1 Holdco (and cancellation of the corresponding shares of Class C Common Stock of the Company), in each case held directly by Mr. Kidambi, (iii) 15,518 shares of Class A Common Stock held by Mr. Kidambi’s spouse (who is also an employee of the Company) and (iv) 61,736 shares of Class A Common Stock currently held by Lone Investment Holdings, LLC (“LIH”), which shares have been given pro forma effect to Mr. Kidambi and are expected to be distributed to Mr. Kidambi upon LIH’s scheduled dissolution. Excludes 172,440 shares of Class A Common Stock and 961,613 shares of Class A Common Stock issuable upon the exchange of 961,613 Class B Units of S1 Holdco (and cancellation of the corresponding shares of Class C Common Stock of the Company) held by OpenMail2. OpenMail2 is jointly controlled by Michael Blend, Charles Ursini and Tridivesh Kidambi as members of the board of managers thereof and they may be deemed to jointly control the voting and dispositive power over the shares held by OpenMail2. |
(5) | Consists of 58,841 shares of Class A Common Stock and 208,595 shares of Class A Common Stock issuable upon the exchange or redemption of 208,595 Class B Units of S1 Holdco (and cancellation of the corresponding shares of Class C Common Stock of the Company) held by Ms. Sestanovich. |
(6) | Consists of 38,464 shares of Class A Common Stock and 59,642 shares of Class A Common Stock issuable upon the exchange or redemption of 59,642 Class B Units of S1 Holdco (and cancellation of the corresponding shares of Class C Common Stock of the Company) held by Mr. Weinrot. |
(7) | Consists of (i) 61,209 shares of Class A common stock held directly by Mr. Civantos, (ii) 100,000 shares of Class A common stock issuable upon the exercise of 100,000 Warrants, (iii) 75,612 shares of Class A Common Stock securities held by the John Civantos 2011 Family Trust, which shares held by the trust Mr. Civantos disclaims beneficial interest in such securities except to any pecuniary interest therein and (iv) 29,325 shares of Class A Common Stock currently held by LIH, which shares have been given pro forma effect to Mr. Civantos and are expected to be distributed to Mr. Civantos upon LIH’s scheduled dissolution. |
(8) | Consists of (i) 3,737,205 shares of Class A Common Stock directly held by Trasimene Trebia, LP (the “Trebia Sponsor”), (ii) 4,734,167 shares of Class A Common Stock issuable upon the exercise of 4,734,167 Warrants directly held by the Trebia Sponsor and (iii) 833,750 shares of Class A Common Stock from the automatic conversion of 833,750 shares of Class D Common Stock held by the Trebia Sponsor. Under the Issuer’s Certificate of Incorporation, the Trebia Sponsor’s shares of Class D Common Stock automatically converted into Class A Common Stock on a one-for-one |
(9) | Consists of (i) 20,500 shares of Class A Common Stock and 40,700 shares of Class A Common Stock issuable upon exercise of 40,700 Public Warrants, in each case held directly by Mr. Kazerani, the spouse of Ms. Kazerani, and (ii) 12,000 shares of Class A Common Stock held by Ms. Kazerani’s in-laws, over which shares Ms. Kazerani’s spouse has voting and dispositive power pursuant to a power of attorney granted to him. |
(10) | Consists of (i) 2,762,282 shares of Class A Common Stock directly held by BGPT Trebia, LP (the “BGPT Sponsor”) (ii) 2,499,167 shares of Class A Common Stock issuable upon the exercise of 2,499,167 Warrants directly held by the BGPT Sponsor and (iii). 616,250 shares of Class A Common Stock from the automatic conversion of 616,250 shares of Class D Common Stock held by the BGPT Sponsor. Under the Issuer’s Certificate of Incorporation, the BGPT Sponsor’s shares of Class D Common Stock automatically converted into Class A Common Stock on a one-for-one |
(11) | Consists of (i) 725,000 fully vested RSUs and 500,000 shares of Class A Common Stock issuable upon the exercise of 500,000 Private Placement Warrants, in each case held directly by Just Develop It Limited (“JDIL”) and (ii) 19,508,184 shares of Class A Common Stock currently held by JDI & AFH Limited (“J&A”), which shares have been given pro forma effect to JDIL and are expected to be distributed to JDIL upon J&A’s scheduled dissolution. J&A’s controlling stockholder is JDIL and Mr. Phillips is a director of J&A. Mr. Phillips is the controlling shareholder and a director of JDIL. The RSUs vested on March 17, 2022, the first trading day on which the volume weighted average price of the Company’s Class A Common Stock equaled or exceeded $12.50 per share for 20 trading days within a period of 30 consecutive trading days. The Private Placement Warrants by their terms became exercisable (including by cash settlement) 30 days following the Closing Date. The terms of the Private Placement Warrants are set forth in the Warrant Agreement filed with the SEC on June 22, 2020 as Exhibit 4.1 to the Issuer’s Current Report on Form 8-K. |
(12) | Consists of 27,181,770 shares of Class A Common Stock issued to Cannae Holdings, LLC, a Delaware limited liability company (“CHL”) pursuant to the Business Combination Agreement, the Backstop Agreement and the A&R Sponsor Agreement. CHL is a wholly-owned subsidiary of Cannae Holdings, Inc. (“CHI”). The address of the principal business office of CHI is 1701 Village Center Circle, Las Vegas, Nevada 89134. |
(13) | Consists of (i) 3,537,147 shares of Class A Common Stock, 500,000 shares of Class A Common Stock issuable upon the exercise of 500,000 Warrants and 7,945,580 Class B Units of S1 Holdco (and the |
corresponding shares of Class C Common Stock of the Issuer), in each case, directly held by Lone Star Friends Trust (“Lone Star”), (ii) 592,514 shares of Class A Common Stock and 251,379 Class B Units of S1 Holdco (and the corresponding shares of Class C Common Stock of the Issuer) directly held by the Dante Jacob Blend Trust, for which Mr. Blend is the trustee (the “Dante Trust”), (iv) 592,514 shares of Class A Common Stock and 251,379 Class B Units of S1 Holdco (and the corresponding shares of Class C Common Stock of the Issuer) directly held by the Nola Delfina Blend Trust, for which Mr. Blend is the trustee (the “Nola Trust”), (v) 45,367 shares directly held by Mr. Blend in his individual capacity and (vi) 2,857,442 shares of Class A Common Stock currently held by LIH, which shares have been given pro forma effect to Mr. Blend and are expected to be distributed to Mr. Blend upon LIH’s scheduled dissolution. Mr. Blend is the trustee of each of Lone Star, the Dante Trust and the Nola Trust, and has voting and dispositive power over the shares held by each of Lone Star, the Dante Trust and the Nola Trust but disclaims beneficial interest in such shares except to the extent of any pecuniary interest therein (if any). Mr. Blend, an attorney at Clark Hill in San Antonio, Texas, is the father of Michael Blend, the Company’s co-founder, CEO and Chairman of the Board. Michael Blend and his family are the beneficiaries of Lone Star. |
(14) | See Footnote (13) above. |
(15) | The shares held by Mr. Baker give pro forma effect to a distribution of shares currently held by J&A, which are expected to be distributed to Mr. Baker upon J&A’s scheduled dissolution. |
(16) | Consists of 1,191,217 shares of Class A Common Stock and 3,408,221 Class B Units of S1 Holdco (and the corresponding shares of Class C Common Stock of the Company), in each case, directly held by the CEE Holdings Trust. Jackson Hole Trust Co. is the trustee of the CEE Holdings Trust and has voting and dispositive power over the shares held by the CEE Holdings Trust but disclaims beneficial interest in such shares. |
Before the Offering |
Number of Securities Being Offered |
After the Offering |
||||||||||||||||||||||||||||||
Name of Selling Securityholder+ |
Number of Shares of Class A Common Stock |
Number of Warrants |
Number of Shares of Class A Common Stock Being Offered |
Number of Warrants Being Offered |
Number of Shares of Class A Common Stock |
Percentage of Outstanding Shares of Class A Common Stock++ |
Number of Warrants |
Percentage of Outstanding Warrants |
||||||||||||||||||||||||
Directors and Executive Officers |
||||||||||||||||||||||||||||||||
Michael Blend (1) |
760,000 |
35,000 |
760,000 |
35,000 |
— | — | — | — | ||||||||||||||||||||||||
Brian Coppola (2) |
303,055 |
— | 303,055 |
— | — | — | — | — | ||||||||||||||||||||||||
Paul Filsinger (3) |
875,900 |
— | 875,900 |
— | — | — | — | — | ||||||||||||||||||||||||
Tridivesh Kidambi (4) |
929,836 |
15,000 |
929,836 |
15,000 |
— | — | — | — | ||||||||||||||||||||||||
Jennifer Robinson (5) |
4,074 |
— | 4,074 |
— | — | — | — | — | ||||||||||||||||||||||||
Elizabeth Sestanovich (6) |
267,436 |
— | 267,436 |
— | — | — | — | — | ||||||||||||||||||||||||
Daniel Weinrot (7) |
98,106 |
— | 98,106 |
— | — | — | — | — | ||||||||||||||||||||||||
John Civantos (8) |
266,146 |
100,000 |
266,146 |
100,000 |
— | — | — | — | ||||||||||||||||||||||||
Moujan Kazerani (9) |
73,200 |
40,700 |
73,200 |
40,700 |
— | — | — | — | ||||||||||||||||||||||||
5% or More Securityholders and Registration Rights Holders |
||||||||||||||||||||||||||||||||
Cannae Holdings, LLC (10) |
27,181,770 |
— | 27,181,770 |
— | — | — | — | — | ||||||||||||||||||||||||
Just Develop It Limited (11) |
20,733,184 |
500,000 |
20,733,184 |
500,000 |
— | — | — | — | ||||||||||||||||||||||||
Lone Star Friends Trust (12) |
14,840,169 |
500,000 |
14,840,169 |
500,000 |
— | — | — | — | ||||||||||||||||||||||||
Trasimene Trebia, LP (13) |
9,305,122 |
4,734,167 |
9,305,122 |
4,734,167 |
— | — | — | — | ||||||||||||||||||||||||
Nicholas Baker (14) |
7,699,449 |
— | 7,699,449 |
— | — | — | — | — | ||||||||||||||||||||||||
BGPT Trebia, LP (15) |
5,877,699 |
2,499,167 |
5,877,699 |
2,499,167 |
— | — | — | — | ||||||||||||||||||||||||
CEE Holdings Trust (16) |
4,599,438 |
— | 4,599,438 |
— | — | — | — | — | ||||||||||||||||||||||||
Stanley Blend (17) |
1,733,153 |
— | 1,733,153 |
— | — | — | — | — | ||||||||||||||||||||||||
Charles Ursini (18) |
857,791 |
— | 857,791 |
— | — | — | — | — | ||||||||||||||||||||||||
The Blend Family Foundation (19) |
296,456 |
— | 296,456 |
— | — | — | — | — | ||||||||||||||||||||||||
Securityholders with more than 500,000 Shares of Class A Common Stock |
||||||||||||||||||||||||||||||||
Harvey’s Gaingels Protected LLC (20) |
4,050,675 |
— | 4,050,675 |
— | — | — | — | — | ||||||||||||||||||||||||
Mellow Mountain Holding Trust (21) |
2,535,781 |
— | 2,535,781 |
— | — | — | — | — | ||||||||||||||||||||||||
Marc Mezzacca (22) |
1,765,368 |
— | 1,765,368 |
— | — | — | — | — | ||||||||||||||||||||||||
OpenMail2 (23) |
1,134,053 |
— | 1,134,053 |
— | — | — | — | — | ||||||||||||||||||||||||
John Fries (24) |
1,012,005 |
— | 1,007,479 |
— | 4,526 |
* |
— | — | ||||||||||||||||||||||||
Dean DeBoer (25) |
893,135 |
— | 893,135 |
— | — | — | — | — |
Before the Offering |
Number of Securities Being Offered |
After the Offering |
||||||||||||||||||||||||||||||
Name of Selling Securityholder+ |
Number of Shares of Class A Common Stock |
Number of Warrants |
Number of Shares of Class A Common Stock Being Offered |
Number of Warrants Being Offered |
Number of Shares of Class A Common Stock |
Percentage of Outstanding Shares of Class A Common Stock++ |
Number of Warrants |
Percentage of Outstanding Warrants |
||||||||||||||||||||||||
Securityholders with up to 500,000 Shares of Class A Common Stock |
||||||||||||||||||||||||||||||||
Securityholders with beneficial ownership of more than 350,000 shares up to 500,000 shares |
2,010,641 |
— | 1,936,574 |
— | 74,067 |
* |
— | — | ||||||||||||||||||||||||
Securityholders with beneficial ownership of more than 200,000 shares up to 350,000 shares |
1,245,302 |
— | 1,225,534 |
— | 19,768 |
* |
— | — | ||||||||||||||||||||||||
Securityholders with beneficial ownership of more than 50,000 shares up to 200,000 shares |
2,620,041 |
— | 2,474,365 |
— | 145,676 |
* |
— | — | ||||||||||||||||||||||||
Securityholders with beneficial ownership of up to 50,000 shares |
2,159,047 |
— | 1,207,238 |
— | 951,809 |
* |
— | — |
(1) | Consists of 35,000 Public Warrants exercisable for 35,000 shares of Class A Common Stock at an exercise price of $11.50 per share and 725,000 fully vested RSUs, in each case held directly by Mr. Blend. The Public Warrants by their terms become exercisable (including by cash settlement) 30 days following the Closing Date. The terms of the Public Warrants are set forth in the Warrant Agreement filed with the SEC on June 22, 2020 as Exhibit 4.1 to the Issuer’s Current Report on Form 8-K. The RSUs vested on March 17, 2022, the first trading day on which the volume weighted average price of the Company’s Class A Common Stock exceeded $12.50 per share for 20 trading days within a period of 30 consecutive trading days. |
(2) | Consists of 77,086 shares of Class A Common Stock and 225,969 shares of Class A Common Stock issuable upon the exchange or redemption of 225,969 Class B Units of S1 Holdco (and cancellation of the corresponding shares of Class C Common Stock of the Company) held directly by Mr. Coppolla. |
(3) | Consists of 335,032 shares of Class A Common Stock and 540,868 shares of Class A Common Stock issuable upon the exchange or redemption of 540,868 Class B Units of S1 Holdco (and cancellation of the corresponding shares of Class C Common Stock of the Company) held by Mr. Filsinger. |
(4) | Consists of (i) 15,000 Public Warrants exercisable for 15,000 shares of Class A Common Stock at an exercise price of $11.50 per share held directly by Mr. Kidambi, (ii) 401,489 shares of Class A Common Stock and 436,093 shares of Class A Common Stock issuable upon the exchange or redemption of 436,093 Class B Units of S1 Holdco (and cancellation of the corresponding shares of Class C Common Stock of the Company), in each case held directly by Mr. Kidambi, (iii) 15,518 shares of Class A Common Stock held by Mr. Kidambi’s spouse (who is also an employee of the Company) and (iv) 61,736 shares of Class A Common Stock currently held by LIH, which shares have |
been given pro forma effect to Mr. Kidambi and are expected to be distributed to Mr. Kidambi upon LIH’s scheduled dissolution. |
(5) | Consists of shares of Class A Common Stock directly held by Ms. Robinson. |
(6) | Consists of 58,841 shares of Class A Common Stock and 208,595 shares of Class A Common Stock issuable upon the exchange or redemption of 208,595 Class B Units of S1 Holdco (and cancellation of the corresponding shares of Class C Common Stock of the Company) held by Ms. Sestanovich. |
(7) | Consists of 38,464 shares of Class A Common Stock and 59,642 shares of Class A Common Stock issuable upon the exchange or redemption of 59,642 Class B Units of S1 Holdco (and cancellation of the corresponding shares of Class C Common Stock of the Company) held by Mr. Weinrot. |
(8) | Consists of (i) 61,209 shares of Class A common stock held directly by Mr. Civantos, (ii) 100,000 shares of Class A common stock issuable upon the exercise of 100,000 Warrants and, (iii) 75,612 shares of Class A Common Stock securities held by the John Civantos 2011 Family Trust, which shares held by the trust Mr. Civantos disclaims beneficial interest in such securities except to any pecuniary interest therein and (iv) 29,325 shares of Class A Common Stock currently held by LIH, which shares have been given pro forma effect to Mr. Civantos and are expected to be distributed to Mr. Civantos upon LIH’s scheduled dissolution. |
(9) | Consists of (i) 20,500 shares of Class A Common Stock and 40,700 shares of Class A Common Stock issuable upon exercise of 40,700 Public Warrants, in each case held directly by Mr. Kazerani, the spouse of Ms. Kazerani, and (ii) 12,000 shares of Class A Common Stock held by Ms. Kazerani’s in-laws, over which shares Ms. Kazerani’s spouse has voting and dispositive power pursuant to a power of attorney granted to him. |
(10) | Consists of 27,181,770 shares of Class A Common Stock issued to CHL pursuant to the Business Combination Agreement, the Backstop Agreement and the A&R Sponsor Agreement. CHL is a wholly-owned subsidiary of CHI. The address of the principal business office of CHI is 1701 Village Center Circle, Las Vegas, Nevada 89134. |
(11) | Consists of (i) 725,000 fully vested RSUs and 500,000 shares of Class A Common Stock issuable upon the exercise of 500,000 Private Placement Warrants, in each case held directly by JDIL and (ii) 19,508,184 shares of Class A Common Stock currently held by J&A, which shares have been given pro forma effect to JDIL and are expected to be distributed to JDIL upon J&A’s scheduled dissolution. J&A’s controlling stockholder is JDIL and Christopher Phillips is a director of J&A. Mr. Phillips is the controlling shareholder and a director of JDIL. The RSUs vested on March 17, 2022, the first trading day on which the volume weighted average price of the Company’s Class A Common Stock equaled or exceeded $12.50 per share for 20 trading days within a period of 30 consecutive trading days. The Private Placement Warrants by their terms became exercisable (including by cash settlement) 30 days following the Closing Date. The terms of the Private Placement Warrants are set forth in the Warrant Agreement filed with the SEC on June 22, 2020 as Exhibit 4.1 to the Issuer’s Current Report on Form 8-K. |
(12) | Consists of (i) 3,537,147 shares of Class A Common Stock, 500,000 shares of Class A Common Stock issuable upon the exercise of 500,000 Warrants and 7,945,580 Class B Units of S1 Holdco (and the corresponding shares of Class C Common Stock of the Issuer), in each case, directly held by Lone Star and (ii) 2,857,442 shares of Class A Common Stock currently held by LIH, which shares have been given pro forma effect to Lone Star and are expected to be distributed to Lone Star upon LIH’s scheduled dissolution. Stanley Blend is the trustee of Lone Star. |
(13) | Consists of (i) 2,762,282 shares of Class A Common Stock directly held by the BGPT Sponsor, (ii) 2,499,167 shares of Class A Common Stock issuable upon the exercise of 2,499,167 Warrants directly held by the BGPT Sponsor and (iii) 616,250 shares of Class A Common Stock from the automatic conversion of 616,250 shares of Class D Common Stock held by the BGPT Sponsor. Under the Issuer’s Certificate of Incorporation, the BGPT Sponsor’s shares of Class D Common Stockautomatically converted into Class A Common Stock on a one-for-one |
(14) | The shares held by Mr. Baker give pro forma effect to a distribution of shares currently held by J&A, which are expected to be distributed to Mr. Baker upon J&A’s scheduled dissolution. |
(15) | Consists of (i) 3,737,205 shares of Class A Common Stock directly held by Trasimene Trebia, LP (the “Trebia Sponsor”), (ii) 4,734,167 shares of Class A Common Stock issuable upon the exercise of 4,734,167 Warrants directly held by the Trebia Sponsor and (iii) 833,750 shares of Class A Common Stock from the automatic conversion of 833,750 shares of Class D Common Stock held by the Trebia Sponsor. Under the Issuer’s Certificate of Incorporation, the Trebia Sponsor’s shares of Class D Common Stock automatically converted into Class A Common Stock on a one-for-one |
(16) | Consists of 1,191,217 shares of Class A Common Stock and 3,408,221 Class B Units of S1 Holdco (and the corresponding shares of Class C Common Stock of the Company), in each case, directly held by the CEE Holdings Trust. Jackson Hole Trust Co. is the trustee of the CEE Holdings Trust and has voting and dispositive power over the shares held by the CEE Holdings Trust but disclaims beneficial interest in such shares. |
(17) | Consists of (i) 592,514 shares of Class A Common Stock and 251,379 Class B Units of S1 Holdco (and the corresponding shares of Class C Common Stock of the Issuer) directly held by the Dante Trust, (ii) 592,514 shares of Class A Common Stock and 251,379 Class B Units of S1 Holdco (and the corresponding shares of Class C Common Stock of the Issuer) directly held by the Nola Trust and (v) 45,367 shares directly held by Mr. Blend in his individual capacity. |
(18) | Consists of (i) 65,196 shares of Class A Common Stock and 294,766 Class B Units of S1 Holdco (and the corresponding shares of Class C Common Stock of the Issuer), in each case held direcly by FGL Labs, of which Mr. Ursini is the managing member, (ii) 86,773 shares of Class A Common Stock and 368,458 Class B Units of S1 Holdco (and the corresponding shares of Class C Common Stock of the Issuer), in each case held directly by the Ursini Children’s Trust, of which Mr. Ursini is the trustee, and (iii) 42,598 shares of Class A Common Stock currently held by LIH, which shares have been given pro forma effect to Mr. Ursini and are expected to be distributed to Mr. Ursini upon LIH’s scheduled dissolution. |
(19) | Consists of (i) 45,077 shares of Class A Common Stock and 251,379 Class B Units of S1 Holdco (and the corresponding shares of Class C Common Stock of the Company), in each case, directly held by the Blend Family Foundation. The directors of the Blend Family Foundation are Michael Blend, Sandra Blend and Stanley Blend. |
(20) | Consists of shares of Class A Common Stock held directly by Harvey’s Gaingels Protected LLC (“HGP”). Joseph Jones has the sole voting and dispositive power over Harvey’s Angels, the managing member of HGP. |
(21) | Consists of 490,848 shares of Class A Common Stock and 2,044,933 Class B Units of S1 Holdco (and the corresponding shares of Class C Common Stock of the Company), in each case, directly held by the Mellow Mountain Holding Trust. Jackson Hole Trust Co. is the trustee of the Mellow Mountain Holding Trust and has voting and dispositive power over the shares held by the Mellow Mountain Holding Trust but disclaims beneficial interest in such shares. |
(22) | Consists of shares of Class A Common Stock held directly by the reporting person, received in connection with the acquisition of NextGen Shopping, Inc. |
(23) | Consists of 172,440 shares of Class A Common Stock and 961,613 shares of Class A Common Stock issuable upon the exchange of 961,613 Class B Units of S1 Holdco (and cancellation of the corresponding shares of Class C Common Stock of the Company) held by OpenMail2. OpenMail2 is jointly controlled by Michael Blend, Charles Ursini and Tridivesh Kidambi as members of the board of managers thereof and they may be deemed to jointly control the voting and dispositive power over the shares held by OpenMail2. |
(24) | Consists of shares of Class A Common Stock held directly by the reporting person. |
(25) | Consists of shared of Class A Common Stock held directly by Altech IT Inc. (“Altech”), of which Mr. Deboer is the president. The principal address of Altech is 9539 Stein Roard, Custer, WA 98240. |
Redemption Fair Market Value of System1 Class A Share |
||||||||||||||||||||||||||||||||||||
Redemption Date (period to expiration of warrants) |
<$ | 10.00 | $ | 11.00 | $ | 12.00 | $ | 13.00 | $ | 14.00 | $ | 15.00 | $ | 16.00 | $ | 17.00 | >$ | 18.00 | ||||||||||||||||||
60 months |
0.261 | 0.280 | 0.297 | 0.311 | 0.324 | 0.337 | 0.348 | 0.358 | 0.361 | |||||||||||||||||||||||||||
57 months |
0.257 | 0.277 | 0.294 | 0.310 | 0.324 | 0.337 | 0.348 | 0.358 | 0.361 | |||||||||||||||||||||||||||
54 months |
0.252 | 0.272 | 0.291 | 0.307 | 0.322 | 0.335 | 0.347 | 0.357 | 0.361 | |||||||||||||||||||||||||||
51 months |
0.246 | 0.268 | 0.287 | 0.304 | 0.320 | 0.333 | 0.346 | 0.357 | 0.361 | |||||||||||||||||||||||||||
48 months |
0.241 | 0.263 | 0.283 | 0.301 | 0.317 | 0.332 | 0.344 | 0.356 | 0.361 | |||||||||||||||||||||||||||
45 months |
0.235 | 0.258 | 0.279 | 0.298 | 0.315 | 0.330 | 0.343 | 0.356 | 0.361 | |||||||||||||||||||||||||||
42 months |
0.228 | 0.252 | 0.274 | 0.294 | 0.312 | 0.328 | 0.342 | 0.355 | 0.361 | |||||||||||||||||||||||||||
39 months |
0.221 | 0.246 | 0.269 | 0.290 | 0.309 | 0.325 | 0.340 | 0.354 | 0.361 | |||||||||||||||||||||||||||
36 months |
0.213 | 0.239 | 0.263 | 0.285 | 0.305 | 0.323 | 0.339 | 0.353 | 0.361 | |||||||||||||||||||||||||||
33 months |
0.205 | 0.232 | 0.257 | 0.280 | 0.301 | 0.320 | 0.337 | 0.352 | 0.361 | |||||||||||||||||||||||||||
30 months |
0.196 | 0.224 | 0.250 | 0.274 | 0.297 | 0.316 | 0.335 | 0.351 | 0.361 | |||||||||||||||||||||||||||
27 months |
0.185 | 0.214 | 0.242 | 0.268 | 0.291 | 0.313 | 0.332 | 0.350 | 0.361 | |||||||||||||||||||||||||||
24 months |
0.173 | 0.204 | 0.233 | 0.260 | 0.285 | 0.308 | 0.329 | 0.348 | 0.361 | |||||||||||||||||||||||||||
21 months |
0.161 | 0.193 | 0.223 | 0.252 | 0.279 | 0.304 | 0.326 | 0.347 | 0.361 | |||||||||||||||||||||||||||
18 months |
0.146 | 0.179 | 0.211 | 0.242 | 0.271 | 0.298 | 0.322 | 0.345 | 0.361 | |||||||||||||||||||||||||||
15 months |
0.130 | 0.164 | 0.197 | 0.230 | 0.262 | 0.291 | 0.317 | 0.342 | 0.361 | |||||||||||||||||||||||||||
12 months |
0.111 | 0.146 | 0.181 | 0.216 | 0.250 | 0.282 | 0.312 | 0.339 | 0.361 | |||||||||||||||||||||||||||
9 months |
0.090 | 0.125 | 0.162 | 0.199 | 0.237 | 0.272 | 0.305 | 0.336 | 0.361 | |||||||||||||||||||||||||||
6 months |
0.065 | 0.099 | 0.137 | 0.178 | 0.219 | 0.259 | 0.296 | 0.331 | 0.361 | |||||||||||||||||||||||||||
3 months |
0.034 | 0.065 | 0.104 | 0.150 | 0.197 | 0.243 | 0.286 | 0.326 | 0.361 | |||||||||||||||||||||||||||
0 months |
— | — | 0.042 | 0.115 | 0.179 | 0.233 | 0.281 | 0.323 | 0.361 |
• | to our officer or directors, any affiliates or family member of any of our officers of directors, any members or partners of the Sponsors or its affiliates, any affiliates of the Sponsors or any employees of such affiliates; |
• | in the case of an individual, by gift to a member of the individual’s immediate family, or to a trust, the beneficiary of which is a member of one of the individual’s immediate family, or an affiliate of such person, or to a charitable organization; |
• | in the case of an individual, by virtue of laws of descent and distribution upon death of the individual; |
• | in the case of an individual, pursuant to a qualified domestic relations order; by virtue of the limited partnership agreements or other applicable organizational documents of the Sponsors upon dissolution of the Sponsors; as distributions to limited partners or members of the Sponsors; by virtue of laws of Delaware or either of the Sponsors’ respective organizational documents upon liquidation or dissolution of Trasimene Sponsor or BGPT Sponsor, as applicable; or in the event of our completion of a liquidation, merger, share exchange or other similar transaction which results in all of our stockholders having the right to exchange their Class A Common Stock for cash, securities or other property subsequent to the completion of the Business Combination; provided, however, that in each case (except for the final four bullets above or with the prior written consent of our group) prior to such registration for transfer, the warrant agent shall be presented with written documentation pursuant to which each permitted transferee must enter into a written agreement with us agreeing to be bound by these transfer restrictions. |
• | purchases by a broker dealer as principal and resale by such broker dealer for its own account pursuant to this prospectus; |
• | ordinary brokerage transactions and transactions in which the broker solicits purchasers; |
• | block trades in which the broker dealer so engaged will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
• | an over the counter distribution in accordance with the rules of the NYSE; |
• | through trading plans entered into by a Selling Securityholder pursuant to Rule 10b5 1 under the Exchange Act, that are in place at the time of an offering pursuant to this prospectus and any applicable prospectus supplement hereto that provide for periodic sales of their securities on the basis of parameters described in such trading plans; |
• | to or through underwriters or broker dealers; |
• | in “at the market” offerings, as defined in Rule 415 under the Securities Act, at negotiated prices, at prices prevailing at the time of sale or at prices related to such prevailing market prices, including sales made directly on a national securities exchange or sales made through a market maker other than on an exchange or other similar offerings through sales agents; |
• | in privately negotiated transactions; |
• | in options transactions; |
• | through a combination of any of the above methods of sale; or |
• | any other method permitted pursuant to applicable law. |
System1, Inc. (f/k/a Trebia Acquisition Corp.) |
||||
F-2 |
||||
F-3 |
||||
F-4 |
||||
F-5 |
||||
F-6 |
||||
F-7 |
S1 Holdco, LLC |
||||
F-26 | ||||
F-27 | ||||
F-28 | ||||
F-29 | ||||
F-30 | ||||
F-31 | ||||
F-32 |
F-63 | ||||
F-65 | ||||
F-66 | ||||
F-67 | ||||
F-68 | ||||
F-69 |
December 31, 2021 |
December 31, 2020 |
|||||||
ASSETS |
||||||||
Current assets |
||||||||
Cash |
$ | $ | ||||||
Prepaid e xpenses |
||||||||
Total Current Assets |
||||||||
Cash held in Trust Account |
||||||||
TOTAL ASSETS |
$ |
$ |
||||||
LIABILITIES AND SHAREHOLDERS’ DEFICIT |
||||||||
Current l iabilities |
||||||||
Accounts Payable and Accrued Expenses |
$ | $ | ||||||
Promissory note—related party |
||||||||
Total Current Liabilities |
||||||||
Warrant Liability |
||||||||
FPA Liability |
||||||||
Deferred Underwriting Fee Payable |
||||||||
Total Liabilities |
||||||||
Commitments |
||||||||
Class A Ordinary Shares subject to possible redemption, shares issued and outstanding at redemption value a s of2021 020and 2 |
||||||||
Shareholders’ Deficit |
||||||||
Prefer e shares, $nce |
||||||||
Class A ordinary share s , $shares authorized; shares subject to possible redemption) at December 31, 2021 and 2020 |
||||||||
Class B ordinary shares, $ shares issued and outstanding as of December 31, 2021 and 2020 |
||||||||
Accumulated deficit |
( |
) | ( |
) | ||||
Total Shareholders’ Deficit |
( |
) |
( |
) | ||||
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT |
$ |
$ |
||||||
Year Ended December 31, 2021 |
For the Period from February 11, 2020 (Inception) through December 31, 2020 |
|||||||
Operating and formation costs |
$ |
$ |
||||||
|
|
|
|
|||||
Loss from operations |
( |
) |
( |
) | ||||
|
|
|
|
|||||
Other income (expense): |
||||||||
Transaction costs allocated to warrant and FPA liabilities |
( |
) | ||||||
Change in fair value of warrant liability |
( |
) | ||||||
Change in fair value of FPA liability |
( |
) | ||||||
Gain on termination of FPA |
||||||||
|
|
|
|
|||||
Total other income (expense), net |
( |
) | ||||||
|
|
|
|
|||||
Net income (loss) |
$ |
$ |
( |
) | ||||
|
|
|
|
|||||
Basic and diluted weighted average shares outstanding, Class A ordinary shares |
||||||||
|
|
|
|
|||||
Basic and diluted net income (loss) per share, Class A ordinary shares |
$ |
$ |
( |
) | ||||
|
|
|
|
|||||
Basic and diluted weighted average shares outstanding, Class B ordinary shares |
||||||||
|
|
|
|
|||||
Basic and diluted net income (loss) per share, Class B ordinary shares |
$ |
$ |
( |
) | ||||
|
|
|
|
Class A Ordinary Shares |
Class B Ordinary Shares |
Additional Paid-in Capital |
Accumulated Deficit |
Total Shareholders’ Deficit |
||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||
Balance—February 11, 2020 (inception) |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||||||||||
Issuance of Class B ordinary shares to Sponsor |
— |
— |
— |
|||||||||||||||||||||||||
Contribution in excess of fair value of private warrants |
— |
— |
— |
— |
— |
|||||||||||||||||||||||
Remeasurement of Class A Common Stock subject to redemption to redemption value |
— |
— |
— |
— |
( |
) |
( |
) |
( |
) | ||||||||||||||||||
Net loss |
— |
— |
— |
— |
— |
( |
) |
( |
) | |||||||||||||||||||
Balance—December 31, 2020 |
— |
$ |
— |
$ |
$ |
— |
( |
) |
$ |
( |
) | |||||||||||||||||
Net income |
— |
— |
— |
— |
— |
|||||||||||||||||||||||
Balance—December 31, 2021 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||
Year Ended December 31, 2021 |
For the Period from February 11, 2020 (Inception) through December 31, 2020 |
|||||||
Cash Flows from Operating Activities: |
||||||||
Net income (loss) |
$ | $ | ( |
) | ||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: |
||||||||
Change in fair value of warrants |
( |
) | ||||||
Change in fair value of FPA |
( |
) | ||||||
Gain on termination of FPA |
( |
) | — | |||||
Transaction costs incurred in connection with IPO |
— | |||||||
Changes in operating assets and liabilities: |
||||||||
Prepaid expenses |
( |
) | ||||||
Accounts payable and accrued expenses |
||||||||
Net cash used in operating activities |
( |
) | ( |
) | ||||
Cash Flows from Investing Activities: |
||||||||
Investment of cash into trust Account |
— |
( |
) | |||||
Net cash used in investing activities |
— | ( |
) | |||||
Cash Flows from Financing Activities: |
||||||||
Proceeds from sale of Units, net of underwriting discounts paid |
— | |||||||
Proceeds from sale of Private Placement Warrants |
— | |||||||
Proceeds from issuance of Class B ordinary shares to Sponsor |
— | |||||||
Proceeds from promissory note—related party |
||||||||
Repayment of promissory note—related party |
( |
) |
||||||
Payment of offering costs |
( |
) | ||||||
Net cash provided by financing activities |
||||||||
Net Change in Cash |
( |
) |
||||||
Cash—Beginning |
— | |||||||
Cash—Ending |
$ |
$ |
||||||
Non-cash investing and financing activities: |
||||||||
Initial classification of warrant liability |
$ | — | $ | |||||
Initial classification of FPA liability |
$ | — | $ | |||||
Initial value of Class A Common Stock subject to possible redemption |
$ |
— | $ | |||||
Deferred underwriting fee payable |
$ |
$ | ||||||
Gross proceeds |
$ |
|||
Less: |
||||
Proceeds allocated to Public Warrants |
$ |
( |
) | |
Class A ordinary shares issuance costs |
( |
) | ||
Plus: |
||||
Remeasurement of carrying value to redemption value |
$ |
|||
|
|
|
||
Class A ordinary shares subject to possible redemption |
$ |
|||
|
|
Year Ended December 31, 2021 |
For the Period from February 11, 2020 (Inception) Through December 31, 2020 |
|||||||||||||||
Class A |
Class B |
Class A |
Class B |
|||||||||||||
Basic and diluted net income (loss) per ordinary share |
||||||||||||||||
Numerator: |
||||||||||||||||
Allocation of net income (loss), as adjusted |
$ |
$ |
$ |
( |
) |
$ |
( |
) | ||||||||
Denominator: |
||||||||||||||||
Basic and diluted weighted average shares outstanding |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Basic and diluted net income (loss) per ordinary share |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
• | Class A common stock, par value $ |
• | Class C common stock, par value $ |
• |
Class D common stock, par value $ one-for-one catch-up payments owed in respect thereof. |
• | in whole and not in part; |
• | at a price of $ |
• | upon not less than d ays’ prior written notice of redemption to each warrant holder and |
• | if, and only if, the last reported sale price of the Class A ordinary shares for any |
• | in whole and not in part; |
• | at $ d ays’ 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 the Class A ordinary shares; |
• | if, and only if, the Reference Value (as defined in the above under “Redemption of Warrants When the Price per Class A Ordinary Share Equals or Exceeds $ |
• | if the Reference Value is less than $ |
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Warrant liabilities: |
||||||||||||||||
Public Warrants |
$ | $ | — | $ | — | $ | ||||||||||
Private Warrants |
— | — | ||||||||||||||
Total Warrants Liabilities |
$ | $ | — | $ | $ | |||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Warrant liabilities: |
||||||||||||||||
Public Warrants |
$ | |
$ | — | $ | — | $ | |
||||||||
Private Warrants |
— | — | ||||||||||||||
Total Warrants Liabilities |
$ | $ | — | $ | $ | |||||||||||
FPA Liability |
— | — | ||||||||||||||
Grand Total |
$ | $ | — | $ | |
$ | ||||||||||
Private Placement Warrant Liability |
||||
Fair value, December 31, 2020 |
$ |
|||
Change in fair value |
( |
) | ||
Fair value, December 31, 2021 |
$ |
|||
FPA Liability |
||||
Fair value, December 31, 2020 |
$ | |||
|
|
|||
Change in fair value |
( |
) | ||
|
|
|||
Gain on termination of FPA |
( |
) | ||
|
|
|||
Fair value, December 31, 2021 |
$ | |||
|
|
|
|
|
As of December 31, |
||||||||
2021 |
2020 |
|||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 47,896 | $ | 29,013 | ||||
Accounts receivable, net of allowance for doubtful accounts |
90,203 | 71,140 | ||||||
Prepaid expenses and other current assets |
7,689 | 3,016 | ||||||
|
|
|
|
|||||
Total current assets |
145,788 | 103,169 | ||||||
|
|
|
|
|||||
Restricted cash |
743 | — | ||||||
Property and equipment, net |
830 | 1,057 | ||||||
Internal-use software development costs, net |
11,213 | 9,660 | ||||||
Intangible assets, net |
50,368 | 59,009 | ||||||
Goodwill |
44,820 | 44,820 | ||||||
Due from related party |
2,469 | 969 | ||||||
Other non-current assets |
680 | — | ||||||
|
|
|
|
|||||
Total assets |
$ | 256,911 | $ | 218,684 | ||||
|
|
|
|
|||||
LIABILITIES AND MEMBERS’ DEFICIT |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 72,846 | $ | 52,104 | ||||
Accrued expenses and other current liabilities |
33,255 | 19,039 | ||||||
Notes payable, current |
170,453 | 9,374 | ||||||
|
|
|
|
|||||
Total current liabilities |
276,554 | 80,517 | ||||||
|
|
|
|
|||||
Notes payable, non-current |
— | 170,595 | ||||||
Other liabilities |
8,758 | 15,801 | ||||||
|
|
|
|
|||||
Total liabilities |
285,312 | 266,913 | ||||||
|
|
|
|
|||||
Commitments and contingencies (Note 11) |
||||||||
Members deficit: |
||||||||
Members’ deficit in S1 Holdco |
(28,829 | ) | (47,886 | ) | ||||
Accumulated other comprehensive income (loss) |
428 | (343 | ) | |||||
|
|
|
|
|||||
Total members’ deficit |
(28,401 | ) | (48,229 | ) | ||||
|
|
|
|
|||||
Total liabilities and members’ deficit |
$ | 256,911 | $ | 218,684 | ||||
|
|
|
|
For the Years Ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Revenue |
$ | 688,389 | $ | 475,977 | $ | 407,493 | ||||||
|
|
|
|
|
|
|||||||
Operating costs and expenses: |
||||||||||||
Cost of revenues (exclusive of depreciation and amortization shown separately below) |
521,113 | 340,996 | 275,770 | |||||||||
Salaries, commissions, and benefits |
66,747 | 55,548 | 48,389 | |||||||||
Selling, general, and administrative |
35,813 | 22,979 | 19,960 | |||||||||
Depreciation and amortization |
13,885 | 13,832 | 11,244 | |||||||||
|
|
|
|
|
|
|||||||
Total operating costs and expenses |
637,558 | 433,355 | 355,363 | |||||||||
|
|
|
|
|
|
|||||||
Operating income |
50,831 | 42,622 | 52,130 | |||||||||
Interest expense |
16,870 | 24,351 | 26,033 | |||||||||
Other expense |
— | — | 1,146 | |||||||||
|
|
|
|
|
|
|||||||
Income from continuing operations before income tax |
33,961 | 18,271 | 24,951 | |||||||||
Income tax expense |
965 | 1,907 | 702 | |||||||||
|
|
|
|
|
|
|||||||
Net income from continuing operations |
32,996 | 16,364 | 24,249 | |||||||||
Income (loss) from discontinued operations, net of taxes |
— | 47,397 | (15,454 | ) | ||||||||
|
|
|
|
|
|
|||||||
Net income |
$ | 32,996 | $ | 63,761 | $ | 8,795 | ||||||
|
|
|
|
|
|
|||||||
Net income per unit from continuing operations attributable to S1 Holdco, LLC: |
||||||||||||
Basic and Diluted |
$ | 1.61 | $ | 0.80 | $ | 1.18 | ||||||
|
|
|
|
|
|
|||||||
Net income (loss) per unit from discontinued operations attributable to S1 Holdco, LLC: |
||||||||||||
Basic and Diluted |
$ | — | $ | 2.31 | $ | (0.75 | ) | |||||
|
|
|
|
|
|
|||||||
Weighted average membership units outstanding |
||||||||||||
Basic and Diluted |
20,488 | 20,488 | 20,488 | |||||||||
|
|
|
|
|
|
For the Years Ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Net income |
$ | 32,996 | $ | 63,761 | $ | 8,795 | ||||||
Other comprehensive income (loss) |
||||||||||||
Foreign currency translation adjustments |
771 | (224 | ) | (119 | ) | |||||||
|
|
|
|
|
|
|||||||
Comprehensive income |
$ | 33,767 | $ | 63,537 | $ | 8,676 | ||||||
|
|
|
|
|
|
Members’ Capital |
Accumulated Other Comprehensive Income (Loss) |
Noncontrolling Interest |
Total Members’ Deficit |
|||||||||||||
BALANCE—January 1, 2019 |
$ | (77,530 | ) | $ | — | $ | 17,873 | $ | (59,657 | ) | ||||||
Net income |
8,795 | — | — | 8,795 | ||||||||||||
Accumulated other comprehensive income |
— | (119 | ) | — | (119 | ) | ||||||||||
Share-based compensation expense |
1,764 | — | — | 1,764 | ||||||||||||
Change in non-controlling interest |
— | — | (15,455 | ) | (15,455 | ) | ||||||||||
Distribution to Court Square Capital Partners |
(1,489 | ) | — | — | (1,489 | ) | ||||||||||
Contribution from OpenMail |
7,257 | — | — | 7,257 | ||||||||||||
Distribution to OpenMail |
(7,166 | ) | — | — | (7,166 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
BALANCE—December 31, 2019 |
$ | (68,369 | ) | $ | (119 | ) | $ | 2,418 | $ | (66,070 | ) | |||||
Net income |
63,761 | — | — | 63,761 | ||||||||||||
Disposal of noncontrolling interest in Protected |
— | — | (2,418 | ) | (2,418 | ) | ||||||||||
Distributions to members from sale of Protected |
(28,765 | ) | — | — | (28,765 | ) | ||||||||||
Share-based compensation expense |
1,012 | — | — | 1,012 | ||||||||||||
Accumulated other comprehensive income |
— | (224 | ) | — | (224 | ) | ||||||||||
Distribution to Court Square Capital Partners |
(11,975 | ) | — | — | (11,975 | ) | ||||||||||
Contribution from OpenMail |
2,255 | — | — | 2,255 | ||||||||||||
Distribution to OpenMail |
(5,805 | ) | — | — | (5,805 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
BALANCE—December 31, 2020 |
$ | (47,886 | ) | $ | (343 | ) | $ | — | $ | (48,229 | ) | |||||
Net income |
32,996 | — | — | 32,996 | ||||||||||||
Share-based compensation expense |
413 | — | — | 413 | ||||||||||||
Accumulated other comprehensive income |
— | 771 | — | 771 | ||||||||||||
Distribution to Court Square Capital Partners |
(8,257 | ) | — | — | (8,257 | ) | ||||||||||
Contribution from OpenMail |
227 | — | — | 227 | ||||||||||||
Distribution to OpenMail |
(6,322 | ) | — | — | (6,322 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
BALANCE—December 31, 2021 |
$ | (28,829 | ) | $ | 428 | $ | — | $ | (28,401 | ) | ||||||
|
|
|
|
|
|
|
|
For the Years Ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Cash Flows from Operating Activities: |
||||||||||||
Net income |
$ | 32,996 | $ | 63,761 | $ | 8,795 | ||||||
Net income (loss) from discontinued operations |
— | 47,397 | (15,454 | ) | ||||||||
|
|
|
|
|
|
|||||||
Net income from continuing operations |
32,996 | 16,364 | 24,249 | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||||
Depreciation and amortization |
13,885 | 13,832 | 11,244 | |||||||||
Share-based compensation |
413 | 1,192 | 1,764 | |||||||||
Amortization of debt issuance costs |
2,261 | 3,521 | 2,548 | |||||||||
Write-down of contingent consideration liability |
— | — | (800 | ) | ||||||||
Change in fair value of contingent consideration and former CEO equity interest |
7,054 | 5,950 | 1,727 | |||||||||
Deferred tax (benefits) expense |
(981 | ) | 32 | (2,143 | ) | |||||||
Changes in operating assets and liabilities-net of effect of acquisitions: |
||||||||||||
Accounts receivable, net of allowance for doubtful accounts |
(19,064 | ) | 6,833 | (10,950 | ) | |||||||
Due from related party |
— | (28 | ) | — | ||||||||
Prepaids and other assets |
(4,968 | ) | (1,076 | ) | 516 | |||||||
Accounts payable |
20,756 | 4,234 | 3,739 | |||||||||
Accrued expenses and other current liabilities |
12,113 | 1,143 | (3,318 | ) | ||||||||
Deferred revenue |
82 | 415 | (169 | ) | ||||||||
Other long-term liabilities |
(3,842 | ) | (5 | ) | 430 | |||||||
|
|
|
|
|
|
|||||||
Net cash provided by operating activities of continuing operations |
60,705 | 52,407 | 28,837 | |||||||||
Net cash provided by (used for) operating activities of discontinued operations |
— | (5,860 | ) | 3,875 | ||||||||
|
|
|
|
|
|
|||||||
Net cash provided by operating activities |
60,705 | 46,547 | 32,712 | |||||||||
|
|
|
|
|
|
|||||||
Cash Flows from Investing Activities: |
||||||||||||
Purchases of property and equipment |
(49 | ) | (19 | ) | (1,186 | ) | ||||||
Proceeds from sale of Protected |
— | 74,544 | — | |||||||||
Expenditures for internal-use software development costs |
(6,486 | ) | (6,112 | ) | (5,510 | ) | ||||||
Purchase of business—net of cash acquired |
— | — | (35,941 | ) | ||||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used for) investing activities of continuing operations |
(6,535 | ) | 68,413 | (42,637 | ) | |||||||
Net cash used for investing activities of discontinued operations |
— | (247 | ) | (120 | ) | |||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used for) investing activities |
(6,535 | ) | 68,166 | (42,757 | ) | |||||||
|
|
|
|
|
|
|||||||
Cash Flows from Financing Activities: |
||||||||||||
Proceeds from term loan |
— | — | 35,000 | |||||||||
Proceeds from line of credit |
— | 20,000 | 32,000 | |||||||||
Repayment of term loan |
(11,636 | ) | (63,423 | ) | (6,380 | ) | ||||||
Repayment of line of credit |
— | (34,862 | ) | (32,000 | ) | |||||||
Payments for deferred financing cost |
(382 | ) | — | — | ||||||||
Related party loan |
(1,500 | ) | — | — | ||||||||
Member capital contributions |
227 | 2,255 | 7,257 | |||||||||
Payments on contingent consideration from purchase of companies |
(6,715 | ) | (5,500 | ) | — | |||||||
Payments for financing costs |
— | — | (1,075 | ) | ||||||||
Distributions to members from sale of Protected |
— | (28,765 | ) | — | ||||||||
Distributions to members |
(14,579 | ) | (17,780 | ) | (8,655 | ) | ||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used for) financing activities |
(34,585 | ) | (128,075 | ) | 26,147 | |||||||
Effect of exchange rate changes in cash, cash equivalent and restricted cash |
41 | (450 | ) | (148 | ) | |||||||
|
|
|
|
|
|
|||||||
Net Increase (decrease) in cash |
19,626 | (13,812 | ) | 15,954 | ||||||||
Cash and cash equivalents and restricted cash, beginning of year |
29,013 | 42,825 | 26,871 | |||||||||
|
|
|
|
|
|
|||||||
Cash and cash equivalents and restricted cash, end of year |
$ | 48,639 | $ | 29,013 | $ | 42,825 | ||||||
|
|
|
|
|
|
|||||||
Reconciliation of cash, cash equivalents and restricted cash to the Consolidated Balance Sheets: |
||||||||||||
Cash and cash equivalents |
$ | 47,896 | $ | 29,013 | $ | 39,136 | ||||||
Restricted cash |
$ | 743 | $ | — | $ | 3,689 | ||||||
|
|
|
|
|
|
|||||||
Total cash, cash equivalents and restricted cash |
$ | 48,639 | $ | 29,013 | $ | 42,825 | ||||||
|
|
|
|
|
|
|||||||
Supplemental cash flow information: |
||||||||||||
Cash paid for interest |
$ | 14,740 | $ | 22,227 | $ | 21,442 | ||||||
Cash paid for taxes |
$ | 2,750 | $ | 4,397 | $ | 55 |
Contingent consideration |
Former CEO equity interest* |
|||||||
Fair value of liabilities at January 1, 2019 |
$ | (8,900 | ) | $ | — | |||
Additions |
(2,200 | ) | — | |||||
Change in fair value |
73 | (1,000 | ) | |||||
|
|
|
|
|||||
Fair value of liabilities at December 31, 2019 |
$ | (11,027 | ) | $ | (1,000 | ) | ||
Settlements |
5,500 | — | ||||||
Change in fair value |
(2,713 | ) | (3,236 | ) | ||||
|
|
|
|
|||||
Fair value of liabilities at December 31, 2020 |
$ | (8,240 | ) | $ | (4,236 | ) | ||
Settlements |
6,716 | — | ||||||
Change in fair value |
(158 | ) | (6,896 | ) | ||||
|
|
|
|
|||||
Fair value at December 31, 2021 |
$ | (1,682 | ) | $ | (11,132 | ) | ||
|
|
|
|
* | Former CEO equity interest as further described in executive compensation Note 11. |
Useful Life | ||||||||
(Years) | ||||||||
Developed technology |
4 | |||||||
Customer relationships |
5 | — |
10 | |||||
Trademarks and trade names |
10 | — |
12 | |||||
Noncompete |
2 | |||||||
Professional service agreement |
3 | |||||||
Other intangibles |
3 |
• | Identification of a contract with a customer, |
• | Identification of the performance obligations in the contract, |
• | Determination of the transaction price, |
• | Allocation of the transaction price to the performance obligations in the contract, and |
• | Recognition of revenue when or as the performance obligations are satisfied. |
• | Fair Value of Common Stock: As the Company’s common stock is not publicly traded, the fair value was determined by management and contemporaneous valuation reports prepared by a third-party valuation specialist. |
• | Expected Term: The expected life of the option is estimated by considering the contractual term of the option, the vesting period of the option, the employees’ expected exercise behavior and the post-vesting employee turnover rate. For non-employees, the expected life equals the contractual term of the option. |
• | Risk-free Interest Rate: The risk-free interest rate is based on published U.S. Treasury Department interest rates for the expected terms of the underlying options. |
• | Volatility: The expected stock price volatility of the underlying shares over the expected term of the option is based upon historical share price data of an index of comparable publicly traded companies. |
Concourse |
MapQuest |
Waterfox |
||||||||||
Cash |
$ | 139 | $ | — | $ | 187 | ||||||
Accounts receivable |
1,365 | 4,349 | 60 | |||||||||
Other current assets |
196 | — | — | |||||||||
Property and equipment |
43 | — | — | |||||||||
Intangible assets |
4,000 | 16,900 | 1,850 | |||||||||
Goodwill |
5,049 | 7,113 | — | |||||||||
Accounts payable |
(583 | ) | — | — | ||||||||
Accrued expenses and other liabilities |
— | (148 | ) | (247 | ) | |||||||
Deferred revenue |
— | (1,643 | ) | — | ||||||||
Other noncurrent liabilities |
(1,700 | ) | — | (295 | ) | |||||||
|
|
|
|
|
|
|||||||
Consideration transferred |
$ |
8,509 |
$ |
26,571 |
$ |
1,555 |
||||||
|
|
|
|
|
|
Concourse |
MapQuest |
Waterfox |
||||||||||
Revenue |
$ | 15,193 | $ | 5,035 | $ | — | ||||||
Net loss |
$ | 3,705 | $ | 3,549 | $ | — |
As of December 31, |
||||||||
2021 |
2020 |
|||||||
Computer equipment |
$ | 415 | $ | 332 | ||||
Furniture and equipment |
475 | 1,382 | ||||||
Leasehold improvements |
976 | 1,173 | ||||||
|
|
|
|
|||||
Property and equipment—gross |
1,866 | 2,887 | ||||||
Less accumulated depreciation |
(1,036 | ) | (1,830 | ) | ||||
|
|
|
|
|||||
Property and equipment—net |
$ | 830 | $ | 1,057 | ||||
|
|
|
|
Owned and Operated |
Partner Network |
Total |
||||||||||
Goodwill at January 1, 2020 |
$ | 24,403 | $ | 20,417 | $ | 44,820 | ||||||
Additions |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Goodwill at December 31, 2020 |
24,403 | 20,417 | 44,820 | |||||||||
Additions |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Goodwill at December 31, 2021 |
$ | 24,403 | $ | 20,417 | $ | 44,820 | ||||||
|
|
|
|
|
|
December 31, 2021 |
||||||||||||
Gross Carrying Amount |
Accumulated Amortization |
Net Carrying Amount |
||||||||||
Total internal-use software development costs |
$ | 21,274 | $ | (10,061 | ) | $ | 11,213 | |||||
|
|
|
|
|
|
|||||||
Intangible assets: |
||||||||||||
Developed technology |
$ | 8,398 | $ | (7,242 | ) | $ | 1,156 | |||||
Trademarks and trade names |
69,007 | (21,375 | ) | 47,632 | ||||||||
Professional service agreement |
3,100 | (2,359 | ) | 741 | ||||||||
Customer relationships |
1,500 | (661 | ) | 839 | ||||||||
|
|
|
|
|
|
|||||||
Total intangible costs |
$ | 82,005 | $ | (31,637 | ) | $ | 50,368 | |||||
|
|
|
|
|
|
December 31, 2020 |
||||||||||||
Gross Carrying Amount |
Accumulated Amortization |
Net Carrying Amount |
||||||||||
Total internal-use software development costs |
$ | 16,026 | $ | (6,366 | ) | $ | 9,660 | |||||
|
|
|
|
|
|
|||||||
Intangible assets: |
||||||||||||
Developed technology |
$ | 8,398 | $ | (6,699 | ) | $ | 1,699 | |||||
Trademarks and trade names |
69,007 | (14,541 | ) | 54,466 | ||||||||
Professional service agreement |
3,100 | (1,326 | ) | 1,774 | ||||||||
Customer relationships |
1,500 | (430 | ) | 1,070 | ||||||||
|
|
|
|
|
|
|||||||
Total intangible costs |
$ | 82,005 | $ | (22,996 | ) | $ | 59,009 | |||||
|
|
|
|
|
|
Amortization Expense |
||||
2022 |
$ | 13,612 | ||
2023 |
11,652 | |||
2024 |
8,993 | |||
2025 |
6,904 | |||
2026 |
6,646 | |||
Thereafter |
13,774 | |||
|
|
|||
$61,581 | ||||
|
|
As of December 31, |
||||||||
2021 |
2020 |
|||||||
Former CEO profit interest |
$ | 11,132 | $ | — | ||||
Payable to employees |
10,091 | 6,757 | ||||||
Accrued legal service fees |
6,242 | — | ||||||
Deferred revenue |
1,971 | 1,889 | ||||||
Contingent consideration |
1,682 | 6,682 | ||||||
Other liabilities |
1,543 | 3,454 | ||||||
Accrued tax liability |
361 | 257 | ||||||
Deferred rent |
233 | — | ||||||
|
|
|
|
|||||
Accrued expenses and other current liabilities |
$ | 33,255 | $ | 19,039 | ||||
|
|
|
|
As of December 31, |
||||||||
2021 |
2020 |
|||||||
Deferred tax liability |
$ | 7,789 | $ | 9,409 | ||||
Former CEO profit interest |
— | 4,237 | ||||||
Contingent consideration |
— | 1,558 | ||||||
Deferred rent |
969 | 597 | ||||||
|
|
|
|
|||||
Other liabilities |
$ | 8,758 | $ | 15,801 | ||||
|
|
|
|
B units |
OM VCUs |
S1 VCUs | ||||||||
Fair market value of stock |
$ | 6.59 | $ | 5.91 | $5.91 — $10.46 | |||||
Volatility |
65 | % | 65 | % | 40% — 65% | |||||
Expected term |
4 | 4.00 | 1.25 — 4.00 | |||||||
Expected dividend yield |
NA | NA | NA | |||||||
Risk-free rate |
2.53 | % | 2.53 | % | 0.1% — 2.53% |
Number of Units |
||||||||||||||||||||
Class B Units |
Class B-1 Units |
Class B-2 Units |
Class B-3 Units |
Class B-4 Units |
||||||||||||||||
Outstanding—January 1, 2019 |
2,780,299 | 576,198 | 125,000 | 192,000 | 271,277 | |||||||||||||||
Canceled |
(22,367 | ) | — | — | — | (9,285 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Outstanding—December 31, 2019 |
2,757,932 | 576,198 | 125,000 | 192,000 | 261,992 | |||||||||||||||
Canceled |
(3,750 | ) | — | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Outstanding—December 31, 2020 |
2,754,182 | 576,198 | 125,000 | 192,000 | 261,992 | |||||||||||||||
Canceled |
— | — | — | — | (6,972 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Outstanding—December 31, 2021 |
2,754,182 | 576,198 | 125,000 | 192,000 | 255,020 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
Weighted-Average Exercise Price |
||||||||||||||||||||
Class B Units |
Class B-1 Units |
Class B-2 Units |
Class B-3 Units |
Class B-4 Units |
||||||||||||||||
Outstanding—January 1, 2019 |
$ | 0.51 | $ | 2.57 | $ | 1.42 | $ | 1.42 | $ | 7.09 | ||||||||||
Canceled |
1.30 | — | — | 1.42 | 7.09 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Outstanding—December 31, 2019 |
0.50 | 2.57 | 1.42 | 1.42 | 7.09 | |||||||||||||||
Canceled |
1.15 | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Outstanding—December 31, 2020 |
0.50 | 2.57 | 1.42 | 1.42 | 7.09 | |||||||||||||||
Canceled |
— | 7.09 | — | — | 7.09 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Outstanding—December 31, 2021 |
$ | 0.50 | $ | 2.57 | $ | 1.42 | $ | 1.42 | $ | 7.09 | ||||||||||
|
|
|
|
|
|
|
|
|
|
S1 Holdco VCUs |
Weighted- Average Exercise Price |
OpenMail VCUs |
Weighted- Average Exercise Price |
|||||||||||||
Outstanding—January 1, 2019 |
1,157,741 | $ | 10.00 | 469,683 | $ | 1.15 | ||||||||||
Granted |
921,500 | 10.00 | — | — | ||||||||||||
Canceled |
(119,226 | ) | 10.00 | (25,378 | ) | 1.15 | ||||||||||
|
|
|
|
|||||||||||||
Outstanding—December 31, 2019 |
1,960,015 | 10.00 | 444,305 | 1.15 | ||||||||||||
Granted |
926,000 | 10.00 | — | — | ||||||||||||
Canceled |
(202,907 | ) | 10.00 | (4,844 | ) | 1.15 | ||||||||||
|
|
|
|
|
|
|||||||||||
Outstanding—December 31, 2020 |
2,683,108 | 10.00 | 439,461 | 1.15 | ||||||||||||
Granted |
1,178,350 | 10.00 | — | — | ||||||||||||
Canceled |
(372,870 | ) | 10.00 | (2,930 | ) | 1.15 | ||||||||||
|
|
|
|
|
|
|||||||||||
Outstanding—December 31, 2021 |
3,488,588 | 10.00 | 436,531 | 1.15 | ||||||||||||
|
|
|
|
|
|
Number of Class B Units |
Number of Class B-1 Units |
Number of Class B-4 Units |
Number of of S1 VCUs |
Number OpenMail VCUs |
||||||||||||||||
Nonvested—January 1, 2019 |
359,673 | 194,413 | 193,362 | 1,157,741 | 469,683 | |||||||||||||||
Granted |
— | — | — | 921,500 | — | |||||||||||||||
Vested |
(201,698 | ) | (66,627 | ) | (62,069 | ) | — | — | ||||||||||||
Canceled |
(22,367 | ) | — | (9,285 | ) | (119,226 | ) | (25,378 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Nonvested—December 31, 2019 |
135,608 | 127,786 | 122,008 | 1,960,015 | 444,305 | |||||||||||||||
Granted |
— | — | — | 926,000 | — | |||||||||||||||
Vested |
(114,329 | ) | (59,906 | ) | (65,678 | ) | — | — | ||||||||||||
Canceled |
(3,750 | ) | — | — | (202,907 | ) | (4,844 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Nonvested—December 31, 2020 |
17,529 | 67,880 | 56,330 | 2,683,108 | 439,461 | |||||||||||||||
Granted |
— | — | — | 1,178,350 | — | |||||||||||||||
Vested |
(17,145 | ) | (51,174 | ) | (49,050 | ) | — | — | ||||||||||||
Canceled |
— | (7,812 | ) | (6,972 | ) | (372,870 | ) | (2,930 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Nonvested—December 31, 2021 |
384 | 8,894 | 308 | 3,488,588 | 436,531 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Domestic |
$ | 30,521 | $ | 15,336 | $ | 17,448 | ||||||
Foreign |
3,440 | 2,935 | 7,503 | |||||||||
|
|
|
|
|
|
|||||||
Income before income taxes |
$ | 33,961 | $ | 18,271 | $ | 24,951 | ||||||
|
|
|
|
|
|
2021 |
2020 |
2019 |
||||||||||
Current: |
||||||||||||
Federal |
$ | — | $ | — | $ | — | ||||||
State |
55 | — | — | |||||||||
Foreign |
1,882 | 1,875 | 2,845 | |||||||||
|
|
|
|
|
|
|||||||
Total |
$ | 1,937 | $ | 1,875 | $ | 2,845 | ||||||
Deferred: |
||||||||||||
Federal |
$ | — | $ | — | $ | — | ||||||
State |
— | — | — | |||||||||
Foreign |
(972 | ) | 32 | (2,143 | ) | |||||||
|
|
|
|
|
|
|||||||
Total |
$ | (972 | ) | $ | 32 | $ | (2,143 | ) | ||||
Income tax expense |
$ | 965 | $ | 1,907 | $ | 702 | ||||||
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||||||||||||||
(In thousands, except percentages) | 2021 |
% |
2020 |
% |
2019 |
% |
||||||||||||||||||
Federal tax expense at U.S. statutory rate |
$ | 7,131 | 21.0 | % | $ | 3,836 | 21.0 | % | $ | 5,239 | 21.0 | % | ||||||||||||
Federal tax expense effect of flow-through entity |
(6,409 | ) | -18.9 | % | (3,289 | ) | -18.0 | % | (4,045 | ) | -16.2 | % | ||||||||||||
Deferred tax impact of foreign rate change |
254 | 0.7 | % | 1,158 | 6.3 | % | (1,100 | ) | -4.4 | % | ||||||||||||||
Foreign rate differential |
88 | 0.3 | % | 137 | 0.8 | % | 291 | 1.2 | % | |||||||||||||||
Transaction cost |
— | — | — | — | 267 | 1.0 | % | |||||||||||||||||
Other |
(99 | ) | -0.3 | % | 65 | 0.3 | % | 50 | 0.2 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total income tax expense |
$ |
965 |
2.8 |
% |
$ |
1,907 |
10.4 |
% |
$ |
702 |
2.8 |
% | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, |
||||||||
(In thousands) | 2021 |
2020 |
||||||
Deferred tax assets: |
||||||||
Interest expense carry forwards |
$ | 165 | $ | 165 | ||||
Other |
5 | 5 | ||||||
Total deferred tax assets |
170 | 170 | ||||||
|
|
|
|
|||||
Valuation allowance |
(170 | ) | (170 | ) | ||||
Total net deferred tax assets |
— | — | ||||||
|
|
|
|
|||||
Deferred tax liabilities: |
||||||||
Intangibles |
7,789 | 9,408 | ||||||
Total deferred tax liabilities |
7,789 | 9,408 | ||||||
|
|
|
|
|||||
Net deferred tax assets (liabilities) |
$ | (7,789 | ) | $ | (9,408 | ) | ||
|
|
|
|
Year ending December 31, |
Amount |
|||
2022 |
$ | 1,957 | ||
2023 |
$ | 1,950 | ||
2024 |
$ | 1,950 | ||
2025 |
$ | 1,663 |
For the Years Ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Numerator: |
||||||||||||
Net income from continuing operations |
$ | 32,996 | $ | 16,364 | $ | 24,249 | ||||||
Net income (loss) from discontinued operations |
$ | — | $ | 47,397 | $ | (15,454 | ) | |||||
Denominator: |
||||||||||||
Weighted-average membership units outstanding: |
||||||||||||
Weighted-average membership units outstanding—basic and diluted (units in thousands) |
20,488 | 20,488 | 20,488 | |||||||||
Income (loss) earnings per membership units |
||||||||||||
Income from continuing operations per membership units – basic and diluted |
$ | 1.61 | $ | 0.80 | $ | 1.18 | ||||||
Income (loss) from discontinued operations membership units – basic and diluted |
$ | — | $ | 2.31 | $ | (0.75 | ) | |||||
Income per membership units – basic and diluted |
$ | 1.61 | $ | 3.11 | $ | 0.43 |
2021 |
2020 |
|||||||
Owned and Operated |
$ | 214,968 | $ | 184,236 | ||||
Partner Network |
41,943 | 34,448 | ||||||
|
|
|
|
|||||
$256,911 | $218,684 | |||||||
|
|
|
|
2021 |
2020 |
2019 |
||||||||||
Owned and Operated |
$ | 652,884 | $ | 437,501 | $ | 369,570 | ||||||
Partner Network |
35,505 | 38,476 | 37,923 | |||||||||
|
|
|
|
|
|
|||||||
Revenue |
$ | 688,389 | $ | 475,977 | $ | 407,493 | ||||||
|
|
|
|
|
|
2021 |
2020 |
2019 |
||||||||||
Owned and Operated |
$ | 143,284 | $ | 110,012 | $ | 108,635 | ||||||
Partner Network |
35,505 | 38,476 | 37,923 | |||||||||
|
|
|
|
|
|
|||||||
Adjusted gross margin |
$ | 178,789 | $ | 148,488 | $ | 146,558 | ||||||
|
|
|
|
|
|
|||||||
Other cost of revenues |
11,513 | 13,507 | 14,835 | |||||||||
Salaries, commissions and benefits |
66,747 | 55,548 | 48,389 | |||||||||
Selling, general and administrative |
35,813 | 22,979 | 19,960 | |||||||||
Depreciation and amortization |
13,885 | 13,832 | 11,244 | |||||||||
Interest expense |
16,870 | 24,351 | 26,033 | |||||||||
Other expense |
— | — | 1,146 | |||||||||
|
|
|
|
|
|
|||||||
Net income from continuing operations before income tax |
$ | 33,961 | $ | 18,271 | $ | 24,951 | ||||||
|
|
|
|
|
|
For the year ended December 31, |
||||||||
2020 |
2019 |
|||||||
Revenue |
$ | 72,937 | $ | 45,222 | ||||
|
|
|
|
|||||
Cost of revenues (exclusive of depreciation and amortization shown separately below) |
79,958 | 67,272 | ||||||
Salaries, commissions, and benefits |
1,835 | 1,678 | ||||||
Selling, general, and administrative |
4,047 | 4,289 | ||||||
Depreciation and amortization |
2,412 | 2,891 | ||||||
|
|
|
|
|||||
Total operating costs and expenses |
88,252 | 76,130 | ||||||
|
|
|
|
|||||
Operating loss |
(15,315 | ) | (30,908 | ) | ||||
Gain on disposal of Protected |
55,070 | — | ||||||
Noncontrolling interest |
7,642 | 15,454 | ||||||
Income tax |
— | — | ||||||
|
|
|
|
|||||
Income (loss) from discontinued operations, net of income taxes |
$ | 47,397 | $ | (15,454 | ) | |||
|
|
|
|
For the year ended December 31, |
||||||||
2020 |
2019 |
|||||||
Depreciation |
$ | 59 | $ | 29 | ||||
Amortization |
2,353 | 2,862 | ||||||
Capital expenditures |
29 | 171 | ||||||
Noncontrolling interest |
7,642 | 15,454 |
• | Exercise professional judgment and maintain professional skepticism throughout the audit. |
• | Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. |
• | Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed. |
• | Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements. |
• | Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time. |
At December 31, |
||||||||
2021 |
2020 |
|||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 35,067,389 | $ | 6,252,719 | ||||
Restricted cash |
1,333,456 | 5,603,764 | ||||||
Prepaid expenses and other current assets [Note 3] |
546,352 | 359,329 | ||||||
Deposits |
15,365 | 3,000,000 | ||||||
|
|
|
|
|||||
Total current assets |
36,962,562 | 15,215,812 | ||||||
Due from related parties [Note 16] |
33,081,720 | 10,229,719 | ||||||
Property, plant, and equipment [Note 4] |
616,092 | 270,495 | ||||||
Intangible assets [Note 5] |
369,179 | 53,230 | ||||||
Deferred Tax Assets [Note 13] |
17,236,520 | — | ||||||
Goodwill [Note 5] |
283,809 | — | ||||||
|
|
|
|
|||||
Total assets |
$ | 88,549,882 | $ | 25,769,256 | ||||
|
|
|
|
|||||
Liabilities and Shareholders’ Deficit |
||||||||
Accounts payable |
$ | 216,035 | $ | 3,004,879 | ||||
Accrued expenses and other liabilities [Note 6] |
10,162,350 | 6,704,093 | ||||||
VAT tax liability [Note 17] |
11,403,760 | 6,366,454 | ||||||
Deferred revenue [Note 10] |
57,405,368 | 47,430,897 | ||||||
Related party deferred revenue [Note 16] |
165,594 | 167,712 | ||||||
Current portion of note payable [Note 7] |
2,812,500 | 1,500,000 | ||||||
Due to related party [Note 16] |
22,509 | 4,389 | ||||||
Refund liability [Note 10] |
536,753 | 511,779 | ||||||
|
|
|
|
|||||
Total current liabilities |
82,724,869 | 65,690,203 | ||||||
Note payable, net of current portion and deferred financing costs [Note 7] |
10,546,448 | 8,351,806 | ||||||
|
|
|
|
|||||
Total liabilities |
93,271,317 | 74,042,009 | ||||||
|
|
|
|
|||||
Commitments and Contingencies [Note 8] |
||||||||
Shareholders’ Deficit : |
||||||||
Class A Preferred shares, par value £0.001 per share, 7,992,009 shares authorized, issued, and outstanding on December 31, 2021 and December 31, 2020, respectively |
10,515 | 10,515 | ||||||
Class B Common shares, par value £0.001 per share, 7,960,105 shares authorized, issued, and outstanding on December 31, 2021 and December 31, 2020, respectively |
10,558 | 10,558 | ||||||
Additional paid-in capital |
40,953,320 | 40,953,320 | ||||||
Accumulated deficit |
(45,695,828 | ) | (89,247,146 | ) | ||||
|
|
|
|
|||||
Total Shareholders’ Deficit |
(4,721,435 | ) | (48,272,753 | ) | ||||
|
|
|
|
|||||
Total Liabilities and Shareholders’ Deficit |
$ | 88,549,882 | $ | 25,769,256 | ||||
|
|
|
|
Year Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Continuing operations |
||||||||
Revenue [Note 10] |
$ | 144,541,221 | $ | 90,908,297 | ||||
Cost of revenue |
98,946,484 | 97,980,269 | ||||||
|
|
|
|
|||||
Gross profit (loss) |
45,594,737 | (7,071,972 | ) | |||||
Operating Expenses |
||||||||
General and administrative expenses [Note 14] |
15,912,393 | 6,711,066 | ||||||
Related party rent expense [Note 16] |
664,697 | 536,200 | ||||||
|
|
|
|
|||||
Total operating expenses |
16,577,090 | 7,247,266 | ||||||
Other Operating (Expense) Income |
||||||||
Gain on sale of intangible assets [Note 11] |
— | 1,580,000 | ||||||
Foreign currency transaction loss |
(1,340,513 | ) | (134,514 | ) | ||||
Other operating income |
343,268 | 48,054 | ||||||
|
|
|
|
|||||
Total other operating (expense) income, net |
(997,245 | ) | 1,493,540 | |||||
|
|
|
|
|||||
Operating income (loss) |
28,020,402 | (12,825,698 | ) | |||||
|
|
|
|
|||||
Non-Operating Income (Expense) |
||||||||
Related party interest expense [Note 16] |
— | (405,767 | ) | |||||
Interest expense [Note 7] |
(583,428 | ) | (29,085 | ) | ||||
Related party interest income [Note 16] |
941,416 | 2,285 | ||||||
|
|
|
|
|||||
Total non-operating income (expense) |
357,988 | (432,567 | ) | |||||
|
|
|
|
|||||
Income (Loss) before income taxes |
28,378,390 | (13,258,265 | ) | |||||
Income tax benefit [Note 13] |
15,172,928 | — | ||||||
|
|
|
|
|||||
Net Income (Loss) and Comprehensive Income (Loss) |
$ | 43,551,318 | $ | (13,258,265 | ) | |||
|
|
|
|
Preferred shares |
Common shares |
Additional Paid-in Capital |
Accumulated Deficit |
Shareholders’ Total Deficit |
||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||
Balance on January 1, 2020 |
7,992,009 | $ | 10,515 | 7,960,105 | $ | 10,558 | $ | 40,953,320 | $ | (75,988,881 | ) | $ | (35,014,488 | ) | ||||||||||||||
Net loss and comprehensive loss |
— | — | — | — | — | (13,258,265 | ) | (13,258,265 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance on December 31, 2020 |
7,992,009 | $ | 10,515 | 7,960,105 | $ | 10,558 | $ | 40,953,320 | $ | (89,247,146 | ) | $ | (48,272,753 | ) | ||||||||||||||
Net income and comprehensive income |
— | — | — | — | — | 43,551,318 | 43,551,318 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance on December 31, 2021 |
7,992,009 | $ | 10,515 | 7,960,105 | $ | 10,558 | $ | 40,953,320 | $ | (45,695,828 | ) | $ | (4,721,435 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||||||
2021 |
2020 |
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
Net income (loss) |
$ | 43,551,318 | $ | (13,258,265 | ) | |||
Adjustments to reconcile net income (loss) to net cash used in operating activities: |
||||||||
Depreciation |
151,347 | 74,652 | ||||||
Amortization |
93,953 | 66,646 | ||||||
Amortization of deferred financing costs |
82,142 | 1,806 | ||||||
Financing fee income on loan with System1 SS Protect Holdings, Inc. |
(77,121 | ) | (2,285 | ) | ||||
Gain on sale of Network Protect intangible assets |
— | (1,580,000 | ) | |||||
Change in operating assets and liabilities: |
||||||||
Deposits |
2,984,635 | (3,000,000 | ) | |||||
Prepaid expenses and other current assets |
(275,168 | ) | (176,637 | ) | ||||
Accounts payable |
(3,117,740 | ) | (55,698 | ) | ||||
Accrued expenses |
3,543,626 | 2,072,446 | ||||||
VAT tax liability |
5,037,306 | (1,801,173 | ) | |||||
Refund liability |
24,974 | 95,239 | ||||||
Deferred revenue |
9,974,471 | 17,727,066 | ||||||
Deferred tax assets |
(17,236,520 | ) | — | |||||
Related party deferred revenue |
(2,118 | ) | 167,712 | |||||
Due from related party |
(866,240 | ) | (165,215 | ) | ||||
Due to related party |
18,120 | (250,348 | ) | |||||
|
|
|
|
|||||
Net cash provided by (used in) operating activities |
43,886,985 | (84,054 | ) | |||||
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||
Cash received in acquisition of Host Plus Limited, net |
13,393 | — | ||||||
Loan advanced to Just Develop It Limited |
(29,634,886 | ) | — | |||||
Repayment of loan by Just Develop It Limited |
29,634,886 | — | ||||||
Loan advanced to Company director |
(2,216,341 | ) | — | |||||
Repayment of loan by Company director |
2,216,341 | — | ||||||
Loan advance to System1 SS Protect Holdings, Inc. |
(21,908,640 | ) | (10,059,719 | ) | ||||
Proceeds from sale of intangibles |
100,000 | 1,500,000 | ||||||
Purchases of intangibles, property, plant, and equipment |
(523,846 | ) | (212,966 | ) | ||||
|
|
|
|
|||||
Net cash used in investing activities |
(22,319,093 | ) | (8,772,685 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||
Proceeds from loan |
5,000,000 | 10,000,000 | ||||||
Repayment of principal on bank loan |
(1,500,000 | ) | — | |||||
Payment of financing costs |
(75,000 | ) | (150,000 | ) | ||||
Proceeds from related party loans |
— | 10,999,947 | ||||||
Repayment of related party loan |
(448,530 | ) | (10,999,947 | ) | ||||
|
|
|
|
|||||
Net cash provided by financing activities |
2,976,470 | 9,850,000 | ||||||
Effect of exchange rate changes on cash |
||||||||
Net change in cash |
24,544,362 | 993,261 | ||||||
Cash and restricted cash, beginning of year |
11,856,483 | 10,863,222 | ||||||
|
|
|
|
|||||
Cash and restricted cash, end of year |
$ | 36,400,845 | $ | 11,856,483 | ||||
|
|
|
|
|||||
Supplemental disclosure of cash and non-cash investing and financing activities |
||||||||
Cash paid for interest |
$ | (501,610 | ) | $ | (474,663 | ) | ||
|
|
|
|
|||||
Receivable from the sale of Network Protect Limited intangible assets |
— | 100,000 | ||||||
|
|
|
|
1. |
BUSINESS AND LIQUIDITY |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: |
As of December 31, |
||||||||
2021 |
2020 |
|||||||
Cash held at banks |
$ | 33,482,467 | $ | 4,391,673 | ||||
Cash held with merchants |
1,584,922 | 1,861,046 | ||||||
|
|
|
|
|||||
Subtotal Cash and Cash Equivalents |
$ | 35,067,389 | $ | 6,252,719 | ||||
Restricted Cash |
1,333,456 | 5,603,764 | ||||||
|
|
|
|
|||||
Total |
$ | 36,400,845 | $ | 11,856,483 | ||||
|
|
|
|
Asset Type |
Depreciation Method |
Estimated Useful Life | ||
Computers |
Straight-line | 3 years | ||
Furniture and Fixtures |
Straight-line | 4 years | ||
Motor Vehicles |
Straight-line | 4 years | ||
Office Equipment |
Straight-line | 3 years |
3. |
PREPAID EXPENSES AND OTHER CURRENT ASSETS |
As of December 31, |
||||||||
2021 |
2020 |
|||||||
Prepaid Advertising |
$ | 97,800 | $ | 39,689 | ||||
Prepaid Subscriptions |
235,825 | 168,289 | ||||||
Prepaid Technical Support |
131,760 | — | ||||||
Other Prepaid Expenses |
80,967 | 151,351 | ||||||
|
|
|
|
|||||
Total |
$ | 546,352 | $ | 359,329 | ||||
|
|
|
|
4. |
PROPERTY, PLANT, AND EQUIPMENT |
As of December 31, |
||||||||
2021 |
2020 |
|||||||
Computers |
$ | 265,511 | $ | 113,684 | ||||
Furniture & Fixtures |
316,209 | 217,008 | ||||||
Motor Vehicles |
179,585 | — | ||||||
Office Equipment |
114,127 | 47,796 | ||||||
|
|
|
|
|||||
$ | 875,432 | $ | 378,488 | |||||
Less: Accumulated Depreciation |
(259,340 | ) | (107,993 | ) | ||||
|
|
|
|
|||||
$ | 616,092 | $ | 270,495 | |||||
|
|
|
|
December 31, 2021 |
||||||||||||||||||||||||
Estimated Useful Life |
Beginning Balance |
Additions |
Disposals |
Accumulated Depreciation |
Net Book Value |
|||||||||||||||||||
Computers |
3 years | $ | 113,684 | $ | 149,389 | — | $ | (94,220 | ) | $ | 168,853 | |||||||||||||
Furniture and fixtures |
4 years | 217,008 | 99,202 | — | (125,270 | ) | 190,940 | |||||||||||||||||
Motor Vehicles |
4 years | — | 179,585 | — | (3,741 | ) | 175,844 | |||||||||||||||||
Office equipment |
3 years | 47,796 | 68,768 | — | (36,109 | ) | 80,455 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
$ | 378,488 | $ | 496,944 | $ | — | $ | (259,340 | ) | $ | 616,092 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
December 31, 2020 |
||||||||||||||||||||||||
Estimated Useful Life |
Beginning Balance |
Additions |
Disposals |
Accumulated Depreciation |
Net Book Value |
|||||||||||||||||||
Computers |
3 years | $ | 56,151 | $ | 57,533 | — | $ | (41,069 | ) | $ | 72,615 | |||||||||||||
Furniture and fixtures |
4 years | 90,818 | 126,190 | — | (52,396 | ) | 164,612 | |||||||||||||||||
Office equipment |
3 years | 26,314 | 21,482 | — | (14,528 | ) | 33,268 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
$ | 173,283 | $ | 205,205 | $ | — | $ | (107,993 | ) | $ | 270,495 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
5. |
GOODWILL AND INTANGIBLE ASSETS |
As of December 31, |
||||||||
2021 |
2020 |
|||||||
Software |
$ | 275,668 | $ | 255,668 | ||||
Technology |
312,000 | — | ||||||
Domain Name |
100,089 | 22,187 | ||||||
|
|
|
|
|||||
$ | 687,757 | $ | 277,855 | |||||
Less: Accumulated amortization |
(318,578 | ) | (224,625 | ) | ||||
|
|
|
|
|||||
$ | 369,179 | $ | 53,230 | |||||
|
|
|
|
December 31, 2021 |
||||||||||||||||||||||||
Estimated Useful Life |
Beginning Balance |
Additions |
Sales |
Accumulated Amortization |
Net Book Value |
|||||||||||||||||||
Software |
3 years | $ | 255,668 | $ | 20,000 | $ | — | $ | (249,496 | ) | $ | 26,172 | ||||||||||||
Technology |
5 years | — | 312,000 | — | (46,800 | ) | 265,200 | |||||||||||||||||
Domain Names |
5 years | 22,187 | 77,902 | — | (22,282 | ) | 77,807 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
$ | 277,855 | $ | 409,902 | $ | — | $ | (318,578 | ) | $ | 369,179 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
December 31, 2020 |
||||||||||||||||||||||||
Estimated Useful Life |
Beginning Balance |
Additions |
Sales |
Accumulated Amortization |
Net Book Value |
|||||||||||||||||||
Software |
3 years | $ | 243,168 | $ | 12,500 | $ | — | $ | (210,445 | ) | $ | 45,223 | ||||||||||||
Domain Names |
5 years | 47,187 | — | (25,000 | ) | (14,180 | ) | 8,007 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
$ | 290,355 | $ | 12,500 | $ | (25,000 | ) | $ | (224,625 | ) | $ | 53,230 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
Goodwill |
||||
Balance at January 1, 2021 |
$ | — | ||
Additions |
283,809 | |||
|
|
|||
Balance at December 31, 2021 |
$ | 283,809 | ||
|
|
As of December 31, |
||||||||
2021 |
2020 |
|||||||
Marketing |
$ | 5,344,603 | $ | 4,361,567 | ||||
Income taxes payable |
2,063,592 | — | ||||||
Payroll |
661,187 | 632,880 | ||||||
Network Protected Limited post-deal activity |
3,285 | 433,063 | ||||||
Accounting and professional fees |
959,599 | 570,069 | ||||||
License and royalties |
809,584 | 387,017 | ||||||
Software |
78,000 | 74,500 | ||||||
Administrative |
243,500 | 223,400 | ||||||
Other |
214,872 | 134,610 | ||||||
|
|
|
|
|||||
Total accrued expenses and other liabilities |
$ | 10,162,350 | $ | 6,704,093 | ||||
|
|
|
|
i. | Delivery of Antivirus Software |
ii. | Delivery of additional add-on service(s) |
For the Year Ended |
||||||||
December 31, |
||||||||
2021 |
2020 |
|||||||
Major products/service lines |
||||||||
Antivirus software revenue |
$ | 114,892,069 | $ | 66,729,758 | ||||
Additional add-on service revenue |
29,649,152 | 24,178,539 | ||||||
|
|
|
|
|||||
Total revenue |
$ | 144,541,221 | $ | 90,908,297 | ||||
|
|
|
|
For the Year Ended |
||||||||
December 31, |
||||||||
2021 |
2020 |
|||||||
Geographic Region |
||||||||
Germany |
$ | 14,862,815 | $ | 10,938,787 | ||||
United Kingdom |
22,162,283 | 13,222,636 | ||||||
Rest of Europe |
23,860,130 | 17,638,111 | ||||||
United States |
62,170,066 | 35,983,970 | ||||||
Rest of North America |
7,862,060 | 4,917,152 | ||||||
Other |
13,623,867 | 8,207,641 | ||||||
|
|
|
|
|||||
Total revenue |
$ | 144,541,221 | $ | 90,908,297 | ||||
|
|
|
|
For the Year Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Deferred revenue at beginning of period |
$ | 47,430,897 | $ | 29,703,831 | ||||
Deferred revenue recognized during period |
(145,733,685 | ) | (58,088,574 | ) | ||||
Additions to deferred revenue during period |
155,708,156 | 75,815,640 | ||||||
|
|
|
|
|||||
Deferred revenue at end of period |
$ | 57,405,368 | $ | 47,430,897 | ||||
|
|
|
|
Cash |
$ | 138 | ||
Host Plus debt assumed at closing |
448,530 | |||
|
|
|||
Total consideration |
$ | 448,668 | ||
|
|
Consolidated Fair Value |
||||
Cash Consideration |
$ | 138 | ||
Host Plus Debt Assumed at Acquisition |
448,530 | |||
|
|
|||
Total Purchase Price |
448,668 | |||
Current Assets Acquired |
||||
Net Working Capital (Including Cash) |
$ | (218,141 | ) | |
|
|
|||
Total Current Identifiable Assets |
(218,141 | ) | ||
Non-Current Assets Acquired |
||||
Technology |
312,000 | |||
Domain Name |
71,000 | |||
|
|
|||
Total Non-Current Identifiable Assets |
383,000 | |||
Goodwill |
$ | 283,809 |
For the Years Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Statutory United Kingdom income tax rate |
19.0 | % | 19.0 | % | ||||
Permanent items |
0.9 | % | -0.1 | % | ||||
Change in UK tax law to deferred taxes |
-8.5 |
% | — | |||||
Prior year adjustments |
-5.5 | % | — | |||||
Change in valuation allowance |
-59.4 | % | -18.9 | % | ||||
|
|
|
|
|||||
Effective tax rate |
-53.5 |
% | — | % | ||||
|
|
|
|
December 31, |
||||||||
2021 |
2020 |
|||||||
United Kingdom: |
||||||||
Current |
$ | 2,170,803 | $ | — | ||||
Deferred |
(17,343,731 | ) | — | |||||
|
|
|
|
|||||
Total |
$ | (15,172,928 | ) | $ | — | |||
|
|
|
|
December 31, |
||||||||
2021 |
2020 |
|||||||
Deferred tax assets/(liabilities): |
||||||||
Net operating loss carryforwards |
$ | 17,346,628 | $ | 16,869,434 | ||||
Deferred financing costs |
(26,800 | ) | (28,157 | ) | ||||
Property, plant and equipment |
(20,105 | ) | (335 | ) | ||||
Intangible assets |
(63,203 | ) | — | |||||
|
|
|
|
|||||
17,236,520 | 16,840,942 | |||||||
Valuation allowance |
— | (16,840,942 | ) | |||||
|
|
|
|
|||||
Deferred tax assets, net of allowance |
$ | 17,236,520 | $ | — | ||||
|
|
|
|
For the Years Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Depreciation and amortization |
$ | 245,299 | $ | 141,298 | ||||
Value-added tax provision (Note 17) |
4,602,494 | 2,934,307 | ||||||
SPAC transaction costs |
1,163,786 | — | ||||||
Software |
1,050,479 | 1,051,157 | ||||||
Salaries and benefits |
5,332,195 | 793,779 | ||||||
Legal fees |
813,468 | 515,318 | ||||||
Other general and administrative expenses |
2,704,672 | 1,275,207 | ||||||
|
|
|
|
|||||
Total |
$ | 15,912,393 | $ | 6,711,066 | ||||
|
|
|
|
For the Years Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Operating Income (Loss) |
$ | 28,020,402 | $ | (12,825,698 | ) | |||
Depreciation and amortization |
245,300 | 141,298 | ||||||
Terminated product lines |
(80,775 | ) | (1,777,261 | ) | ||||
VAT accrual for previously uncollected VAT |
4,674,727 | 2,934,307 | ||||||
Director Salary Payments |
2,806,497 | — | ||||||
Non-cash foreign exchange adjustments |
1,340,513 | 110,090 | ||||||
Non-recurring expense, primarily related to acquisitions, financing and SPAC transaction costs |
1,690,426 | 489,955 | ||||||
Changes in deferred revenue |
9,974,471 | 18,083,645 | ||||||
|
|
|
|
|||||
Adjusted operating income |
$ | 48,671,561 | $ | 7,156,336 | ||||
|
|
|
|
Amount |
||||
Securities and Exchange Commission registration fee |
108,003 | |||
FINRA filing fee |
* | |||
Accountants’ fees and expenses |
2,500,000 | |||
Legal fees and expenses |
300,000 | |||
Transfer Agent’s fees and expenses |
15,000 | |||
Printing and engraving expenses |
35,000 | |||
Miscellaneous |
41,997 | |||
|
|
|||
Total expenses |
* | |||
|
|
* | These fees are calculated based on the securities offered and the number of issuances and accordingly cannot be defined at this time. |
Exhibit Number |
Incorporated by Reference |
Filed or Furnished Herewith | ||||||||||
Description |
Form |
File No. |
Exhibit |
Filing Date | ||||||||
10.8 | Protected Support Agreement, dated as of June 28, 2021, by and among each of the Persons listed on Exhibit A thereto, JDI & AFH Limited, Protected.net Group Limited, Protected Security Holdings, LLC and Trebia Acquisition Corp. | S-4 |
333-260714 |
10.8 | December 16, 2021 | |||||||
10.9 | Mutual Termination Agreement, dated as of June 28, 2021, by and between Trebia Acquisition Corp. and Cannae Holdings, Inc. | S-4 |
333-260714 |
10.9 | December 16, 2021 | |||||||
10.10 | Form of Indemnification Agreement | 8-K | 001-39331 | 10.4 | March 2, 2022 | |||||||
21.1 | Subsidiaries of the registrant | X | ||||||||||
23.1 | Consent of Latham & Watkins LLP (included as part of Exhibit 5.1) | X | ||||||||||
23.2 | Consent of PricewaterhouseCoopers LLP | X | ||||||||||
23.3 | Consent of Marcum LLP | X | ||||||||||
23.4 | Consent of BDO LLP, independent accountants | X | ||||||||||
24.1 | Power of Attorney | S-1 | 333-262608 |
24.1 | February 9, 2022 | |||||||
101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | X | ||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | X | ||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | X | ||||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | X |
Exhibit Number |
Incorporated by Reference |
Filed or Furnished Herewith | ||||||||||
Description |
Form |
File No. |
Exhibit |
Filing Date | ||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | X | ||||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | X | ||||||||||
107 | Calculation of Registration Fee | X |
X | Filed or furnished herewith |
^ | Indicates management contract or compensatory plan |
(a) | that, for the purpose of determining any liability under the Securities Act, each such post effective amendment 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; |
(b) | to remove from registration by means of a post effective amendment any of the securities being registered which remain unsold at the termination of the offering; |
(c) | that, for the purpose of determining liability under the Securities Act to any purchaser: |
(d) | Each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use; and |
(e) | that, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
(f) | any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
(g) | any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
(h) | the portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of an undersigned registrant; and |
(i) | any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
SYSTEM1, INC. | ||
By: | /s/ Michael Blend | |
Michael Blend | ||
Chief Executive Officer and Chairman |
Signature |
Title |
Date | ||
/s/ |
Chief Executive Officer and Chairman |
April 1, 2022 | ||
Michael Blend | (Principal Executive Officer) |
|||
/s/ |
Chief Financial Officer |
April 1, 2022 | ||
Tridivesh Kidambi | (Principal Financial and Accounting Officer) |
|||
|
Director |
|||
John Civantos | ||||
* |
Director |
April 1, 2022 | ||
William P. Foley, II | ||||
* |
Director |
April 1, 2022 | ||
Frank R. Martire, Jr. | ||||
* |
Director |
April 1, 2022 | ||
Dexter Fowler | ||||
* |
Director |
April 1, 2022 | ||
Jennifer Prince | ||||
* |
Director |
April 1, 2022 | ||
Moujan Kazerani | ||||
* |
Director |
April 1, 2022 | ||
Caroline Horn | ||||
* |
Director |
April 1, 2022 | ||
Christopher Phillips |
*By: | /s/ Michael Blend | |
Michael Blend, Attorney-in-Fact |