ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) | |
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(Address of principal executive offices) |
(Zip Code) |
Title of Each Class |
Trading Symbol(s) |
Name of Each Exchange on Which Registered | ||
one-third of one redeemable warrant |
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Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☒ | Smaller reporting company | ||||
Emerging growth company |
• |
our ability to complete our initial Business Combination; |
• |
our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial Business Combination; |
• |
our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial Business Combination; |
• |
our potential ability to obtain additional financing to complete our initial Business Combination; |
• |
our Chief Executive Officer being subject to non-compete arrangements with his prior employer; |
• |
our pool of prospective target businesses; |
• |
the ability of our officers and directors to generate a number of potential investment opportunities; |
• |
our public securities’ potential liquidity and trading; |
• |
the lack of a market for our securities; |
• |
the use of proceeds not held in the trust account or available to us from interest income on the trust account balance; or |
• |
the trust account not being subject to claims of third parties. |
• |
“common stock” are to our Class A common stock and our Class B common stock, collectively; |
• |
“EGI” refers to the Equity Group Investments division of Chai Trust Company, LLC, the private investment firm founded by Sam Zell; |
• |
“equity-linked securities” are to any debt or equity securities that are convertible, exercisable or exchangeable for shares of our Class A common stock issued in connection with our initial Business Combination; |
• |
“founders” are to Sam Zell and Bill Galvin; |
• |
“founder shares” are to shares of our Class B common stock initially purchased by our sponsor in a private placement prior to our initial public offering, and the shares of our Class A common stock that will be issued upon the automatic conversion of the shares of our Class B common stock at the time of our initial Business Combination (for the avoidance of doubt, such shares of our Class A common stock will not be “public shares”); |
• |
“initial stockholders” are to our sponsor and any other holders of our founder shares (or their permitted transferees); |
• |
“management” or our “management team” are to our executive officers and directors; |
• |
“private placement warrants” are to the warrants issued to our sponsor in a private placement simultaneously with the closing of our initial public offering and upon conversion of working capital loans, if any; |
• |
“public shares” are to shares of our Class A common stock sold as part of the units in our initial public offering (whether they were purchased in such offering or thereafter in the open market); |
• |
“public stockholders” are to the holders of our public shares, including our initial stockholders and management team to the extent our initial stockholders and/or members of our management team purchase public shares, provided that each initial stockholder’s and member of our management team’s status as a “public stockholder” shall only exist with respect to such public shares; |
• |
“public warrants” are to our redeemable warrants sold as part of the units in our initial public offering (whether they were purchased in our initial public offering or thereafter in the open market) and to any private placement warrants or warrants issued upon conversion of working capital loans that are sold to third parties that are not initial purchasers or executive officers or directors (or permitted transferees) following the consummation of our initial Business Combination; |
• |
“sponsor” are to Equity Distribution Sponsor LLC, and references to the experience of our sponsor include the experience of our founders and the affiliated investment professionals of our sponsor; |
• |
“warrants” are to our redeemable warrants, which includes the public warrants as well as the private placement warrants to the extent they are no longer held by the initial purchasers of the private placement warrants or their permitted transferees; and |
• |
“we,” “our,” “us,” “Company” or “our Company” are to Equity Distribution Acquisition Corp. |
Item 1. |
Business. |
• | a track record of growing multi-billion dollar platforms in the public and private markets; |
• | identifying potential market dislocations, including counter-intuitive investment opportunities; |
• | partnering with management teams and business owners to drive sustainable, long-term value; |
• | driving innovation and increasing technology adoption throughout organizations; |
• | implementing operational improvement initiatives and executing turnarounds; |
• | executing transformational and smaller M&A transactions; |
• | driving strategic capital allocation decisions at the corporate level; |
• | understanding public market performance and requirements; |
• | cultivating deep relationships with sellers, financing providers and target management teams; and |
• | an extensive history of accessing the capital markets across various business cycles, including financing businesses and assisting companies with transition to public ownership. |
• | have a strong competitive position, in an industry where technology plays an increasingly important role; |
• | have potential for attractive free cash flow characteristics and a desirable return on capital; |
• | have a strong management team that would benefit from our network or capabilities, such as additional management expertise, operational changes to drive improved financial performance, capital structure optimization or acquisition expertise; |
• | are fundamentally sound companies with a proven track record; |
• | will offer an attractive risk-adjusted return for our shareholders; and |
• | can benefit from being a publicly traded company, are prepared to be a publicly traded company and can utilize access to broader capital markets. |
• | conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and |
• | file proxy materials with the SEC. |
• | conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and |
• | file tender offer documents with the SEC prior to completing our initial Business Combination which contain substantially the same financial and other information about the initial Business Combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. |
Item 1A. |
Risk Factors. |
• | We are a recently incorporated company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective. |
• | Your only opportunity to affect the investment decision regarding a potential Business Combination may be limited to the exercise of your right to redeem your shares from us for cash. |
• | The requirement that we complete an initial Business Combination within 24 months after the closing of our initial public offering may give potential target businesses leverage over us in negotiating a Business Combination and may limit the time we have in which to conduct due diligence on potential Business Combination targets as we approach our dissolution deadline, which could undermine our ability to complete our initial Business Combination on terms that would produce value for our stockholders. |
• | We may not be able to complete an initial Business Combination within 24 months after the closing of our initial public offering, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public stockholders may only receive $10.00 per share, or less than such amount in certain circumstances, and our warrants will expire worthless. |
• | You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss. |
• | You will not be entitled to protections normally afforded to investors of many other blank check companies. |
• | If we seek stockholder approval of our initial Business Combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of stockholders are deemed to hold in excess of 15% of our Class A common stock, you will lose the ability to redeem all such shares in excess of 15% of our Class A common stock. |
• | Because of our limited resources and the significant competition for Business Combination opportunities, it may be more difficult for us to complete our initial Business Combination. |
• | If the net proceeds of our initial public offering and the sale of the private placement warrants not being held in the trust account are insufficient to allow us to operate for at least the next 24 months, it could limit the amount available to fund our search for a target business or businesses and complete our initial Business Combination, and we will depend on loans from our sponsor or management team to fund our search and to complete our initial Business Combination. |
• | The recent coronavirus (COVID-19) pandemic and the impact on business and debt and equity markets could have a material adverse effect on our search for a Business Combination, and any target business with which we ultimately consummate a Business Combination. |
• | We may not hold an annual meeting of stockholders until after the completion of our initial Business Combination. |
• | We are not registering the Class A common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time, and such registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants except on a cashless basis and potentially causing such warrants to expire worthless. |
• | The grant of registration rights to our sponsor may make it more difficult to complete our initial Business Combination, and the future exercise of such rights may adversely affect the market price of the shares of our Class A common stock. |
• | Because we are neither limited to evaluating a target business in a particular industry sector nor have we selected any specific target businesses with which to pursue our initial Business Combination, you will be unable to ascertain the merits or risks of any particular target business’s operations. |
• | Past performance by EGI, or its affiliates, Anixter or our management team, including the businesses referred to herein, may not be indicative of future performance of an investment in us or in the future performance of any business that we may acquire. |
• | We may seek acquisition opportunities in industries or sectors which may be outside of our management’s area of expertise. |
• | Our ability to successfully effect our initial Business Combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some of whom may join us following our initial Business Combination. The loss of key personnel could negatively impact the operations and profitability of our post-combination business. |
• | Our executive officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests. |
• | We may issue notes or other debt securities, or otherwise incur substantial debt, to complete a Business Combination, which may adversely affect our leverage and financial condition and thus negatively impact the value of our stockholders’ investment in us. |
• | We may attempt to complete our initial Business Combination with a private company about which little information is available, which may result in a Business Combination with a company that is not as profitable as we suspected, if at all. |
• | Our management may not be able to maintain control of a target business after our initial Business Combination. Upon the loss of control of a target business, new management may not possess the skills, qualifications or abilities necessary to profitably operate such business. |
• | We do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete our initial Business Combination with which a substantial majority of our stockholders do not agree. |
• | We may be unable to obtain additional financing to complete our initial Business Combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon a particular Business Combination. |
• | Our sponsor controls a substantial interest in us and thus may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support. |
• | Our warrants and founder shares may have an adverse effect on the market price of the shares of our Class A common stock and make it more difficult to effectuate our initial Business Combination. |
• | a limited availability of market quotations for our securities; |
• | reduced liquidity for our securities; |
• | a determination that our Class A common stock are a “penny stock” which will require brokers trading in our Class A common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; |
• | a limited amount of news and analyst coverage; and |
• | a decreased ability to issue additional securities or obtain additional financing in the future. |
• | restrictions on the nature of our investments; and |
• | restrictions on the issuance of securities, each of which may make it difficult for us to complete our initial Business Combination. |
• | registration as an investment company; |
• | adoption of a specific form of corporate structure; and |
• | reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations. |
• | may significantly dilute the equity interest of investors; |
• | may subordinate the rights of holders of our Class A common stock if share of preferred stock are issued with rights senior to those afforded our Class A common stock; |
• | could cause a change in control if a substantial number of shares of our Class A common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; |
• | may adversely affect prevailing market prices for our units, Class A common stock and/or warrants; and |
• | will not result in adjustment to the exercise price of our warrants. |
• | default and foreclosure on our assets if our operating revenues after an initial Business Combination are insufficient to repay our debt obligations; |
• | acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
• | our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; |
• | our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding; |
• | our inability to pay dividends on our Class A common stock; |
• | using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A common stock if declared, our ability to pay expenses, make capital expenditures and acquisitions and fund other general corporate purposes; |
• | limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
• | increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and |
• | limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements and execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. |
• | solely dependent upon the performance of a single business, property or asset; or |
• | dependent upon the development or market acceptance of a single or limited number of products, processes or services. |
• | costs and difficulties inherent in managing cross-border business operations and complying with different commercial and legal requirements of overseas markets; |
• | rules and regulations regarding currency redemption; |
• | complex corporate withholding taxes on individuals; |
• | laws governing the manner in which future Business Combinations may be effected; |
• | exchange listing and/or delisting requirements; |
• | tariffs and trade barriers; |
• | regulations related to customs and import/export matters; |
• | local or regional economic policies and market conditions; |
• | unexpected changes in regulatory requirements; |
• | longer payment cycles; |
• | tax issues, such as tax law changes and variations in tax laws as compared to the United States; |
• | currency fluctuations and exchange controls; |
• | rates of inflation; |
• | challenges in collecting accounts receivable; |
• | cultural and language differences; |
• | employment regulations; |
• | underdeveloped or unpredictable legal or regulatory systems; |
• | corruption; |
• | protection of intellectual property; |
• | social unrest, crime, strikes, riots and civil disturbances; |
• | regime changes and political upheaval; |
• | terrorist attacks, natural disasters and wars; |
• | deterioration of political relations with the United States; and |
• | government appropriation of assets. |
Item 1B. |
Unresolved Staff Comments. |
Item 2. |
Properties. |
Item 3. |
Legal Proceedings. |
Item 4. |
Mine Safety Disclosures. |
Item 5. |
Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities. |
Item 6. |
Reserved. |
Item 7. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
(1) | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company, |
(2) | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company, |
(3) | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. |
Item 9B. |
Other Information. |
Item 9C. |
Disclosure Regarding Foreign Jurisdictions that Prevent Inspection |
Item 10. |
Directors, Executive Officers and Corporate Governance. |
Name |
Age |
Position | ||||
Sam Zell |
80 | Chairman of the Board of Directors | ||||
Bill Galvin |
59 | Chief Executive Officer and Director | ||||
Philip Tinkler |
56 | Chief Financial Officer | ||||
Joseph Miron |
53 | Secretary | ||||
Robert W. Grubbs |
65 | Director | ||||
Ellen Havdala |
56 | Director | ||||
Bill Simon |
62 | Director | ||||
Charles Swoboda |
55 | Director |
• | appointing, compensating and overseeing our independent registered public accounting firm; |
• | reviewing and approving the annual audit plan for the Company; |
• | overseeing the integrity of our financial statements and our compliance with legal and regulatory requirements; |
• | discussing the annual audited financial statements and unaudited quarterly financial statements with management and the independent registered public accounting firm; |
• | pre-approving all audit services and permitted non-audit services to be performed by our independent registered public accounting firm, including the fees and terms of the services to be performed; |
• | appointing or replacing the independent registered public accounting firm; |
• | establishing procedures for the receipt, retention and treatment of complaints (including anonymous complaints) we receive concerning accounting, internal accounting controls, auditing matters or potential violations of law; |
• | monitoring our environmental sustainability and governance practices; |
• | establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies; |
• | approving audit and non-audit services provided by our independent registered public accounting firm; |
• | discussing earnings press releases and financial information provided to analysts and rating agencies; |
• | discussing with management our policies and practices with respect to risk assessment and risk management; |
• | reviewing any material transaction between our Chief Financial Officer that has been approved in accordance with our Code of Ethics for our officers, and providing prior written approval of any material transaction between us and our President; and |
• | producing an annual report for inclusion in our proxy statement, in accordance with applicable rules and regulations. |
• | reviewing and approving corporate goals and objectives relevant to our Chief Executive Officer’s compensation (if any), evaluating our Chief Executive Officer’s performance in light of those goals and objectives, and setting our Chief Executive Officer’s compensation level (if any) based on this evaluation; |
• | setting salaries and approving incentive compensation and equity awards, as well as compensation policies, for all other officers who file reports of their ownership, and changes in ownership, of the Company’s common stock under Section 16(a) of the Exchange Act (the “Section 16 Officers”), as designated by our board of directors; |
• | making recommendations to the board with respect to incentive compensation programs and equity-based plans that are subject to board approval; |
• | approving any employment or severance agreements with our Section 16 Officers; |
• | granting any awards under equity compensation plans and annual bonus plans to the Section 16 Officers; |
• | approving the compensation of our directors; and |
• | producing an annual report on executive compensation for inclusion in our proxy statement, in accordance with applicable rules and regulations. |
• | identifying individuals qualified to become members of the board of directors and making recommendations to the board of directors regarding nominees for election; |
• | reviewing the independence of each director and making a recommendation to the board of directors with respect to each director’s independence; |
• | developing and recommending to the board of directors the corporate governance principles applicable to us and reviewing our corporate governance guidelines at least annually; |
• | making recommendations to the board of directors with respect to the membership of the audit, compensation and corporate governance and nominating committees; |
• | overseeing the evaluation of the performance of the board of directors and its committees on a continuing basis, including an annual self-evaluation of the performance of the corporate governance and nominating committee; |
• | considering the adequacy of our governance structures and policies, including as they relate to our environmental sustainability and governance practices; |
• | considering director nominees recommended by stockholders; and |
• | reviewing our overall corporate governance and reporting to the board of directors on its findings and any recommendations. |
• | should possess personal qualities and characteristics, accomplishments and reputation in the business community; |
• | should have current knowledge and contacts in the communities in which we do business and in our industry or other industries relevant to our business; |
• | should have the ability and willingness to commit adequate time to the board of directors and committee matters; |
• | should demonstrate ability and willingness to commit adequate time to the board of directors and committee matters; |
• | should possess the fit of the individual’s skills and personality with those of other directors and potential directors in building a board of directors that is effective, collegial and responsive to our needs; and |
• | should demonstrate diversity of viewpoints, background, experience, and other demographics, and all aspects of diversity in order to enable the board to perform its duties and responsibilities effectively, including candidates with a diversity of age, gender, nationality, race, ethnicity, and sexual orientation. |
• | the corporation could financially undertake the opportunity; |
• | the opportunity is within the corporation’s line of business; and |
• | it would not be fair to our Company and its stockholders for the opportunity not to be brought to the attention of the corporation. |
Item 11. |
Executive Compensation. |
Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. |
• | each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock; |
• | each of our executive officers and directors that beneficially owns shares of our common stock; and |
• | all our executive officers and directors as a group. |
Class A Common Stock |
Class B Common Stock |
|||||||||||||||
Name and Address of Beneficial Owner (1)(2) |
Number of Shares Beneficially Owned |
Percentage of Class A Common Stock |
Number of Shares Beneficially Owned |
Percentage of Class B Common Stock | ||||||||||||
Falcon Edge Capital, LP(3) |
5,340,000 | 12.9 | % | — | — | |||||||||||
Anson Funds Management LP(4) |
2,969,179 | 7.2 | % | |||||||||||||
Bank of Montreal(5) |
2,328,500 | 5.6 | % | — | — | |||||||||||
Integrated Core Strategies (US) LLC(6) |
1,227,334 | 3.0 | % | — | — | |||||||||||
Equity Distribution Sponsor LLC(7) |
— | — | 10,242,000 | 99.0 | % | |||||||||||
Sam Zell(7) |
— | — | 10,242,000 | 99.0 | % | |||||||||||
Bill Galvin |
— | — | — | — | % | |||||||||||
Philip Tinkler |
— | — | — | — | % | |||||||||||
Joseph Miron |
— | — | — | — | % | |||||||||||
Robert W. Grubbs |
— | — | 36,000 | * | % | |||||||||||
Ellen Havdala |
— | — | — | — | % | |||||||||||
Bill Simon |
— | — | 36,000 | * | % | |||||||||||
Charles Swoboda |
— | — | 36,000 | * | % | |||||||||||
All officers and directors as a group (eight individuals) |
— |
— |
10,350,000 |
100 |
% |
* | Less than one percent. |
(1) | Unless otherwise noted, the business address of each of our stockholders is Two North Riverside Plaza, Suite 600, Chicago, IL 60606. |
(2) | Interests shown consist solely of founder shares, classified as Class B common stock. Such shares will automatically convert into Class A common stock at the time of our initial Business Combination. |
(3) | According to a Schedule 13G filed on October 13, 2020 on behalf of Falcon Edge Capital, LP. Falcon Edge Capital, LP is the investment manager of certain affiliate funds shares held by such funds. Mr. Richard Gerson serves as the Chairman and Chief Investment Officer of Falcon Edge Capital, LP. Accordingly, Falcon Edge Capital, LP and Richard Gerson have the right or the power to direct the receipt of dividends from, or the proceeds from the sale of the shares. The business address of such holders is 660 Madison Avenue, 19th Floor, New York, New York 10065. |
(4) | According to a Schedule 13G filed on February 11, 2022 on behalf of Anson Funds Management LP (d/b/a Anson Funds), a Texas limited partnership, Anson Management GP LLC, a Texas limited liability company, Mr. Bruce R. Winson, the principal of Anson Funds Management LP and Anson Management GP LLC, Anson Advisors Inc., an Ontario, Canada corporation, Mr. Amin Nathoo, a director of Anson Advisors Inc., and Mr. Moez Kassam, a director of Anson Advisors Inc. Anson Funds Management LP and Anson Advisors Inc. serve as co-investment advisors (the “Fund”). Anson Funds Management LP and Anson Advisors Inc. serve as co-investment advisors to the Fund and may direct the vote and disposition of the 2,969,179 shares of Common Stock held by the Fund. As the general partner of Anson Funds Management LP, Anson Management GP LLC may direct the vote and disposition of the 2,969,179 shares of Common Stock held by the Fund. As the principal of Anson Fund Management LP and Anson Management GP LLC, Mr. Winson may direct the vote and disposition of the 2,969,179 shares of Common Stock held by the Fund. As directors of Anson Advisors Inc., Mr. Nathoo and Mr. Kassam may each direct the vote and disposition of the 2,969,179 shares of Common Stock held by the Fund. The business address of the Fund, Anson Management GP LLC and Mr. Winson is 16000 Dallas Parkway, Suite 800 Dallas, Texas 75248. The business address of Anson Advisors Inc., Mr. Nathoo and Mr. Kassam is 155 University Ave, Suite 207 Toronto, M5H 3B7, Ontario, Canada. |
(5) | According to a Schedule 13G filed on February 15, 2022 on behalf of Bank of Montreal and BMO Nesbitt Burns Inc. Bank of Montreal and BMO Nesbitt Burns Inc. are the record holders of the shares reported herein. Each of Bank of Montreal and BMO Nesbitt Burns Inc. may be deemed to have sole voting power and sole dispositive power over all of the securities owned. The business address of such holders is 100 King Street West, 21st Floor, Toronto, M5X 1A1, Ontario, Canada. |
(6) | According to a Schedule 13G/A filed on February 2, 2022 on behalf of Integrated Core Strategies (US) LLC. Integrated Core Strategies (US) LLC may be deemed to have shared voting power and shared dispositive power with respect to 157,914 shares, Riverview Group LLC may be deemed to have shared voting power and shared dispositive power with respect to 925,000 shares, ICS Opportunities, Ltd. may be deemed to have shared voting power and shared dispositive power with respect to 140,000 shares, ICS Opportunities II LLC may be deemed to have shared voting power and shared dispositive power with respect to 4,420 shares, Millennium International Management LP may be deemed to have shared voting power and shared dispositive power with respect to 144,420 shares, Millenium Management LLC may be deemed to have shared voting power and shared dispositive power with respect to 1,227,334 shares, Millennium Group Management LLC may be deemed to have shared voting power and shared dispositive power with respect to 1,227,334 shares and Israel A. Englander may be deemed to have shared voting power and shared dispositive power with respect to 1,227,334 shares. The securities disclosed herein as potentially beneficially owned by Millennium Management LLC, Millennium Group Management LLC and Mr. Englander are held by entities subject to voting control and investment discretion by Millennium Management LLC and/or other investment managers that may be controlled by Millennium Group Management LLC (the managing member of Millennium Management LLC) and Mr. Englander (the sole voting trustee of the managing member of Millennium Group Management LLC). The foregoing should not be construed in and of itself as an admission by Millennium Management LLC, Millennium Group Management LLC or Mr. Englander as to beneficial ownership of the securities held by such entities. The business address of such holders is 399 Park Avenue, New York, New York, 10022. |
(7) | Equity Distribution Sponsor LLC is the record holder of the shares reported herein. Equity Distribution Sponsor LLC is majority-owned by EGI-Fund C, L.L.C. Chai Trust Company, LLC is the managing member of EGI-Fund C, L.L.C. Accordingly, each of EGI-Fund C, L.L.C. and Chai Trust Company, LLC may be deemed to beneficially own the reported shares held directly by Equity Distribution Sponsor LLC. Equity Distribution Sponsor LLC is managed by a board of managers, which is controlled by the manager designated by EGI-Fund C, L.L.C., which is Sam Zell. Accordingly, Sam Zell may also be deemed to beneficially own the reported shares held directly by Equity Distribution Sponsor LLC. Sam Zell disclaims beneficial ownership of such shares except to the extent, if any, of his pecuniary interest therein. The business address of such holders is Two North Riverside Plaza, Suite 600, Chicago Illinois, 60606. |
Item 13. |
Certain Relationships and Related Transactions, and Director Independence. |
Item 14. |
Principal Accounting Fees and Services. |
Item 15. |
Exhibits and Financial Statement Schedules. |
(a) | The following documents are filed as part of this Form 10-K: |
(1) | Financial Statements: |
Page | ||||
Report of Independent Registered Public Accounting Firm |
F-2 |
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Balance Sheets |
F-3 |
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Statements of Operations |
F-4 |
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Statements of Changes in Stockholders’ Deficit |
F-5 |
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Statements of Cash Flows |
F-6 |
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Notes to Financial Statements |
F-7 |
(2) | Financial Statement Schedules: |
(3) | Exhibits |
* | Filed herewith. |
** | Furnished herewith. |
(1) | Previously filed as an exhibit to our Current Report on Form 8-K filed on September 21, 2020 and incorporated by reference herein. |
(2) | Previously filed as an exhibit to our Registration Statement on Form S-1 filed on August 28, 2020 and incorporated by reference herein. |
(3) | Previously filed as an exhibit to our Annual Report on Form 10-K filed on March 17, 2021 and incorporated by reference herein. |
Item 16. |
Form 10-K Summary. |
Not | applicable. |
F-2 | ||
Financial Statements: |
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F-3 | ||
F-4 | ||
F-5 | ||
F-6 | ||
F-7 to F-1 9 |
December 31, |
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2021 |
2020 |
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ASSETS |
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Current Assets |
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Cash |
$ | $ | ||||||
Prepaid expenses |
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Prepaid income taxes |
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Total Current Assets |
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Marketable securities held in Trust Account |
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TOTAL ASSETS |
$ |
$ |
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LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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Current Liabilities |
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Accrued expenses |
$ | $ | ||||||
Promissory note-related party |
||||||||
|
|
|
|
|||||
Total Current Liabilities |
||||||||
Warrant liability |
||||||||
Deferred underwriting fee payable |
||||||||
|
|
|
|
|||||
Total Liabilities |
||||||||
|
|
|
|
|||||
Commitments and Contingencies (Note 6) |
||||||||
Class A common stock subject to possible redemption |
||||||||
|
|
|
|
|||||
Stockholders’ Deficit |
||||||||
Preferred stock, $ |
||||||||
Class A common stock, $ |
||||||||
Class B common stock, $ |
||||||||
Accumulated Deficit |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total Stockholders’ Deficit |
( |
) |
( |
) | ||||
|
|
|
|
|||||
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT |
$ |
$ |
||||||
|
|
|
|
Year Ended December 31, 2021 |
For the Period from July 7, 2020 (Inception) Through December 31, 2020 |
|||||||
Operating and formation costs |
$ | $ | ||||||
|
|
|
|
|||||
Loss from operations |
( |
) |
( |
) | ||||
Other income: |
||||||||
Interest earned on marketable securities held in Trust Account |
||||||||
Change in fair value of warrant liability |
||||||||
Transaction costs associated with Initial Public Offering |
( |
) | ||||||
Unrealized gain on marketable securities held in Trust Account |
||||||||
|
|
|
|
|||||
Total other income, net |
||||||||
|
|
|
|
|||||
Income (loss) before provision for income taxes |
( |
) | ||||||
Provision for income taxes |
||||||||
|
|
|
|
|||||
Net income (loss) |
$ |
$ |
( |
) | ||||
|
|
|
|
|||||
Weighted average shares outstanding, Class A common stock |
||||||||
|
|
|
|
|||||
Basic and diluted net income (loss) per share, Class A common stock |
$ |
$ |
( |
) | ||||
|
|
|
|
|||||
Weighted average shares outstanding, Class B common stock |
$ | $ | ||||||
|
|
|
|
|||||
Basic and diluted net income (loss) per share, Class B common stock |
$ |
$ |
( |
) | ||||
|
|
|
|
Class A Common Stock |
Class B Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Total Stockholders’ Deficit |
||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||
Balance – July 7, 2020 (Inception) |
$ | $ | $ | $ | $ | |||||||||||||||||||||||
Issuance of Class B common stock to Sponsor |
||||||||||||||||||||||||||||
Accretion for Class A common stock to redemption value |
— | — | — | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||
Net loss |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
Balance – December 31, 2020 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||
Remeasurement of Class A common stock to redemption value |
— | — | — | — | — | |||||||||||||||||||||||
Net income |
— | — | — | — | — | |||||||||||||||||||||||
Balance – December 31, 2021 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||
Year Ended December 31, 2021 |
For the Period from July 7, 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: |
||||||||
Interest earned on marketable securities held in Trust Account |
( |
) | ( |
) | ||||
Change in fair value of warrant liability |
( |
) | ( |
) | ||||
Warrant liability in excess of purchase price of Private Placement Warrants |
||||||||
Transaction costs associated with Initial Public Offering |
||||||||
Unrealized gain on marketable securities held in Trust Account |
( |
) | ( |
) | ||||
Changes in operating assets and liabilities: |
||||||||
Prepaid expenses |
( |
) | ||||||
Prepaid income taxes |
( |
) | ||||||
Accrued expenses |
||||||||
Net cash (used in) operating activities |
( |
) |
( |
) | ||||
Cash Flows from Investing Activities: |
||||||||
Investment of cash in Trust Account |
( |
) | ||||||
Cash withdrawn from Trust Account to pay franchise and income taxes |
||||||||
Net cash provided by (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 promissory notes – related party |
||||||||
Repayment of promissory notes – related party |
( |
) | ||||||
Payment of offering costs |
( |
) | ||||||
Net cash provided by financing activities |
||||||||
Net Change in Cash |
( |
) |
||||||
Cash – Beginning |
||||||||
Cash – Ending |
$ |
$ |
||||||
Supplemental cash flow information: |
||||||||
Cash paid for income taxes |
$ | $ | ||||||
Non-cash Investing and Financing activities: |
||||||||
Initial classification of Class A common stock subject to possible redemption |
$ | $ | ||||||
Change in value of Class A common stock subject to possible redemption |
$ | ( |
) | $ | ||||
Initial classification of warrant liability |
$ | $ | ||||||
Deferred underwriting fee payable |
$ | $ | ||||||
Payment of offering costs by the Sponsor in exchange for the issuance of Class B common stock to the Sponsor |
$ | $ | ||||||
Gross proceeds |
$ | |||
Less: |
||||
Proceeds allocated to Public Warrants |
( |
) | ||
Class A common stock issuance costs |
( |
) | ||
Plus: |
||||
Accretion of carrying value to redemption value |
||||
Class A common stock subject to possible redemption |
$ |
|||
Less: |
||||
Remeasurement of carrying value to redemption value |
( |
) | ||
Class A common stock subject to possible redemption |
$ |
|||
Year Ended December 31, 2021 |
For the Period from July 7, 2020 (Inception) Through December 31, 2020 |
|||||||||||||||
Class A |
Class B |
Class A |
Class B |
|||||||||||||
Basic and diluted net income (loss) per common share |
||||||||||||||||
Numerator: |
||||||||||||||||
Allocation of net income (loss), as adjusted |
$ | $ | $ | ( |
) | $ | ( |
) | ||||||||
Denominator: |
||||||||||||||||
Basic and diluted weighted average shares outstanding |
||||||||||||||||
Basic and diluted net income (loss) per common share |
$ |
$ |
$ |
( |
) |
$ |
( |
) | ||||||||
• | in whole and not in part; |
• | at a price of $ |
• | upon not less than |
• | if, and only if, the reported last reported sale price of the Class A common stock for any |
• | in whole and not in part; |
• | at $ |
• | if, and only if, the Reference Value equals or exceeds $ |
• | if the Reference Value is less than $ |
December 31, 2021 |
December 31, 2020 |
|||||||
Deferred tax assets |
||||||||
Net operating loss carryforward |
$ | $ | ||||||
Startup and organizational expenses |
||||||||
Unrealized gain on marketable securities |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total deferred tax assets |
||||||||
Valuation Allowance |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Deferred tax assets, net of allowance |
$ | $ | ||||||
|
|
|
|
December 31, 2021 |
December 31, 2020 |
|||||||
Federal |
||||||||
Current |
$ | $ | ||||||
Deferred |
( |
) | ( |
) | ||||
State and Local |
||||||||
Current |
||||||||
Deferred |
||||||||
Change in valuation allowance |
||||||||
|
|
|
|
|||||
Income tax provision |
$ | $ | ||||||
|
|
|
|
December 31, 2021 |
December 31, 2020 |
|||||||
Statutory federal income tax rate |
% | % | ||||||
State taxes, net of federal tax benefit |
% | % | ||||||
Change in fair value of warrant liability |
( |
)% | ( |
)% | ||||
Valuation allowance |
% | ( |
)% | |||||
|
|
|
|
|||||
Income tax provision |
( |
)% | ( |
)% | ||||
|
|
|
|
Level 1: | Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. | |
Level 2: | Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. | |
Level 3: | Unobservable inputs based on the Company’s assessment of the assumptions that market participants would use in pricing the asset or liability. |
Description |
Level |
December 31, 2021 |
December 31, 2020 |
|||||||||
Assets: |
||||||||||||
Marketable securities held in Trust Account |
1 | $ | $ | |||||||||
Liabilities: |
||||||||||||
Warrant Liability – Public Warrants |
1 | $ | $ | |||||||||
Warrant Liability – Private Placement Warrants |
2 | $ | $ |
Input |
September 18, 2020 (Initial Measurement) |
|||
Risk-free interest rate |
% | |||
Expected term (years) |
||||
Expected volatility |
% | |||
Exercise price |
$ | |||
Fair value of Units |
$ |
February 24, 2022 | EQUITY DISTRIBUTION ACQUISITION CORP. | |||||
By: | /s/ William A. Galvin | |||||
Name: William A. Galvin | ||||||
Title: Chief Executive Officer and Director |
Name |
Position |
Date | ||
/s/ Sam Zell |
Chairman of the Board of Directors | February 24, 2022 | ||
Sam Zell | ||||
/s/ William A. Galvin |
Chief Executive Officer and Director | February 24, 2022 | ||
William A. Galvin | (Principal Executive Officer) | |||
/s/ Philip Tinkler |
Chief Financial Officer | February 24, 2022 | ||
Philip Tinkler | (Principal Financial and Accounting Officer) | |||
/s/ Robert W. Grubbs |
Director | February 24, 2022 | ||
Robert W. Grubbs | ||||
/s/ Ellen Havdala |
Director | February 24, 2022 | ||
Ellen Havdala | ||||
/s/ Bill Simon |
Director | February 24, 2022 | ||
Bill Simon | ||||
/s/ Charles Swoboda |
Director | February 24, 2022 | ||
Charles Swoboda |