Delaware |
6770 |
85-2097088 | ||
(State or Other Jurisdiction of Incorporation or Organization) |
(Primary Standard Industrial Classification Code Number) |
(IRS Employer Identification Number) |
James R. Griffin, Esq. Weil, Gotshal & Manges LLP 200 Crescent Court, Suite 300 Dallas, TX 75201 (214) 746-7779 |
Kyle C. Krpata, Esq. Weil, Gotshal & Manges LLP 201 Redwood Shores Parkway Redwood Shores, CA 94065 (650) 802-3093 |
Mark B. Baudler Andrew D. Hoffman Christina L. Poulsen Jonathan Chan Wilson Sonsini Goodrich & Rosati Professional Corporation One Market Plaza Spear Tower, Suite 3300 San Francisco, CA 94105 (415) 947-2000 |
Sanjay Banker Ritesh Patel Phil Rothenberg Sonder Holdings Inc. 101 15th Street San Francisco, CA 94103 |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
☒ | Smaller reporting company | |||||
Emerging Growth Company |
Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) |
☐ |
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Exchange Act Rule 14d-1(d) (Cross Border Third-Party Tender Offer) |
☐ |
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Title of Each Class of Securities to be Registered |
Amount to be Registered |
Proposed Maximum Offering Price Per Share |
Proposed Maximum Aggregate Offering Price |
Amount of Registration Fee | ||||
Common Stock to be issued in the Business Combination |
243,768,315 (1)(3) |
N/A |
$2,409,649,793.78 (4) |
$262,892.79 (6) | ||||
Post-Combination Company Special Voting Common Stock to be issued in the Business Combination |
39,053,307 (2)(3) |
N/A |
$39.05 (5) |
$0.00 (7) | ||||
Total |
$262,892.79 (8) | |||||||
| ||||||||
|
(1) |
Represents the estimated maximum number of shares of common stock, par value $0.000001 per share (“ Common Stock Post-Combination Company the sum of : (a) (i) $2,176,603,000, divided by (ii) $10.00; and (b) 14,500,000 shares of Common Stock that may be issued as contingent consideration in the Business Combination pursuant to the Merger Agreement. |
(2) |
Represents the estimated maximum number of shares of Post-Combination Company Special Voting Common Stock, par value $0.000001 per share (“ Post-Combination Company Special Voting Common Stock multiplied by (b) 1.68930507853591, the Estimated Exchange Rate (as defined herein) for the purposes of calculating the maximum number of Post-Combination Company Special Voting Common Stock to be issued in connection with the Business Combination. |
(3) |
Pursuant to Rule 416(a) promulgated under the Securities Act, there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from share splits, share dividends or similar transactions. |
(4) |
Pursuant to Rules 457(c), 457(f)(1) and 457(f)(3) promulgated under the Securities Act and solely for the purpose of calculating the registration fee, the proposed aggregate maximum offering price is (i) $9.885 (the average of the high and low prices of Public Shares as reported on Nasdaq on June 28, 2021) multiplied by (ii) 243,768,315 shares of Common Stock to be registered. |
(5) |
Pursuant to Rules 457(c), 457(f)(1) and 457(f)(3) promulgated under the Securities Act and solely for the purpose of calculating the registration fee, the proposed aggregate maximum offering price is (i) $0.000001 (the book value of each share of Post-Combination-Company Special Voting Common Stock) multiplied by (ii) 39,053,307 shares of Post-Combination Company Special Voting Common Stock to be registered. |
(6) |
Computed in accordance with Rule 457(f) under the Securities Act to be $262,892.79, which is equal to 0.0001091 multiplied by the proposed maximum aggregate offering price of shares of Common Stock of $2,409,649,793.78. |
(7) |
Computed in accordance with Rule 457(f) under the Securities Act to be $0.00, which is equal to 0.0001091 multiplied by the proposed maximum aggregate offering price of shares of Post-Combination Company Special Voting Common Stock of $39.05. |
(8) |
Previously paid in connection with the initial filing of this Registration Statement. |
• |
at the closing of the Business Combination, First Merger Sub will merge with and into Sonder, with Sonder continuing as the Surviving Corporation (the “ First Merger |
• |
immediately following the First Merger and as part of the same overall transaction as the First Merger, the Surviving Corporation will merge with and into Second Merger Sub, with Second Merger Sub continuing as the Surviving Entity (the “ Second Merger Business Combination Post-Combination Company |
• |
in connection with the Business Combination, we will adopt the proposed Amended and Restated Certificate of Incorporation (the “ Amended and Restated Certificate of Incorporation Annex B , to provide for, among other things, the authorization of our Common Stock, par value $0.000001 per share (the “Common Stock Post-Combination Company Special Voting Common Stock |
• |
in connection with the Business Combination, the holders of Sonder’s (a) Common Stock, par value $0.000001 per share (“ Sonder Common Stock” Seed-1 Preferred Stock, (ii) Series Seed-1A Preferred Stock, (iii) Series Seed-2 Preferred Stock, (iv) Series Seed-2A Preferred Stock, (v) Series Seed-3 Preferred Stock, (vi) Series Seed-3A Preferred Stock, (vii) Series A Preferred Stock, (viii) Series A-1 Preferred Stock, (ix) Series B Preferred Stock, (x) Series B-1 Preferred Stock, (xi) Series C Preferred Stock, (xii) Series C-1 Preferred Stock, (xiii) Series D Preferred Stock, (xiv) Series D-1 Preferred Stock and (xv) Series E Preferred Stock, in each case, par value $0.000001 per share (collectively, such classes referred to in clause (b), the “Sonder Preferred Stock Sonder Special Voting Common Stock Seed-1 Stock, (iii) Special Voting Series Seed-2 Stock, (iv) Special Voting Series Seed-3 Stock, (v) Special Voting Series A Stock, (vi) Special Voting Series B Stock, (vii) Special Voting Series C Stock, (viii) Special Voting Series D Stock and (ix) Special Voting Series E Stock, in each case, par value $0.000001 per share (collectively, such classes and series referred to in clauses “(a),” “(b)” and “(c),” the “Sonder Stock Sonder Convertible Notes |
with respect to each share of Sonder Common Stock in accordance with the Per Share Sonder Common Stock Consideration (as defined below); |
• | “ Per Share Sonder Common Stock Consideration divided by divided by |
• | “ Sonder Stock Adjusted Fully Diluted Shares plus Sonder Canada Exchangeable Common Shares Sonder Canada Seed-1 Exchangeable Preferred Shares, (ii) Series Seed-2 Exchangeable Preferred Shares, (iii) Series Seed-3 Exchangeable Preferred Shares, (iv) Series A Exchangeable Preferred Shares, (v) Series B Exchangeable Preferred Shares, (vi) Series C Exchangeable Preferred Shares, (vii) Series D Exchangeable Preferred Shares and (viii) Series E Exchangeable Preferred Shares prior to Closing), plus Sonder Stock Options plus Sonder Warrants plus |
• | in connection with the Business Combination, each share of Sonder Canada Exchangeable Common Shares will be exchanged into a new series of the same class of virtually identical Sonder Canada Exchangeable Common Shares (the “ Post-Combination Canada Exchangeable Common Shares |
• | at the closing of the Business Combination, the Company, Sponsor, Randall Bort, Michael Cramer, Joseph Gatto and certain Sonder Stockholders (the “ Registration Rights Holders Registration Rights Agreement Earn Out Shares |
• | following the closing of the Business Combination, the foregoing consideration to be paid to the Sonder equityholders may be further increased by amounts payable in respect of Earn Out Shares, of up to an aggregate of 14,500,000 shares of Common Stock. |
• | a proxy statement for the special meeting of the Company in lieu of the 2021 annual meeting of the Company being held on [●], 2021, (including any adjournment or postponement thereof, the “ Special Meeting |
• | a consent solicitation statement for Sonder, where Sonder will solicit the written consent of the Sonder Stockholders with respect to the adoption of the Merger Agreement; and |
• | a prospectus for the Common Stock that Sonder Stockholders will receive in the Business Combination. |
Sincerely, |
Dean Metropoulos |
Chairman of the Board of Directors |
1. | Business Combination Proposal Merger Agreement First Merger Sub Second Merger Sub Sonder Annex A , and approve the transactions contemplated thereby, including, among other things, (i) the merger of First Merger Sub with and into Sonder, with Sonder continuing as the surviving corporation (the “First Merger Second Merger Mergers Business Combination |
2. | Nasdaq Proposal Class A Stock Class F Stock Post-Combination Company Special Voting Common Stock |
3. | Charter Proposal Annex B (Proposal No. 3); |
4. | Governance Proposals non-binding advisory basis, a separate proposal with respect to certain governance provisions in the Amended and Restated Certificate of Incorporation in accordance with the United States Securities and Exchange Commission (“SEC |
5. | Management Equity Incentive Plan Proposal Management Equity Incentive Plan |
including the authorization of the initial share reserve under the Management Equity Incentive Plan (Proposal No. 5); |
6. | Incentive Plan Proposal Incentive Plan |
7. | ESPP Proposal ESPP |
8. | Director Election Proposal |
9. | Adjournment Proposal |
By Order of the Board of Directors |
Dean Metropoulos |
Chairman of the Board of Directors |
Boulder, Colorado |
[●], 2021 |
By Order of the Board of Directors, |
Francis Davidson |
Chief Executive Officer |
[●], 2021 |
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II-6 |
1. | Business Combination Proposal |
statement as Annex A , and the transactions contemplated thereby, including, among other things, the Business Combination (Proposal No. 1); |
2. | Nasdaq Proposal |
3. | Charter Proposal Annex B (Proposal No. 3); |
4. | Governance Proposals non-binding advisory basis, a separate proposal with respect to certain governance provisions in the Amended and Restated Certificate of Incorporation in accordance with SEC requirements (Proposal No. 4); |
5. | Management Equity Incentive Plan Proposal |
6. | Incentive Plan Proposal |
7. | ESPP Proposal |
8. | Director Election Proposal |
9. | Adjournment Proposal |
• | the fact that our Initial Stockholders have agreed not to redeem any of the Founder Shares in connection with a stockholder vote to approve a proposed initial business combination; |
• | the fact that our Initial Stockholders have agreed to waive their rights to conversion price adjustments with respect to any Founder Shares they may hold in connection with the consummation of the Business Combination. Therefore, shares of Class F Stock held by the Initial Stockholders will convert on a one-for-one basis in connection with the consummation of the Business Combination (including the PIPE Investment); |
• | the fact that our Sponsor paid an aggregate of $25,000 for 11,500,000 Founder Shares and (after giving effect to the cancellation of 250,000 Founder Shares on March 7, 2021) the remaining 11,250,000 Founder Shares will have a significantly higher value at the time of the Business Combination, which if unrestricted and freely tradable would be valued at approximately $112.5 million but, given the restrictions on such shares, we believe such shares have less value; |
• | the fact that given the differential in the purchase price that our Sponsor paid for the Founder Shares as compared to the price of the Public Units sold in the Company IPO and the substantial number of shares of Common Stock that our Sponsor will receive upon conversion of the Founder Shares in connection with the Business Combination, our Sponsor and its affiliates may earn a positive rate of return on their investment even if the Common Stock trades below the price initially paid for the Public Units in the Company IPO and the Public Stockholders experience a negative rate of return following the completion of the Business Combination; |
• | the fact that our Initial Stockholders have agreed to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if we fail to complete an initial business combination by January 22, 2023; |
• | the fact that our Sponsor paid an aggregate of approximately $11,000,000 for its 5,500,000 Private Placement Warrants to purchase shares of Class A Stock, and that such Private Placement Warrants will expire worthless if an initial business combination is not consummated by January 22, 2023; |
• | the continued right of our Sponsor to hold our Class A Stock and the shares of Class A Stock to be issued to our Sponsor upon exercise of its Private Placement Warrants following the Business Combination, subject to certain lock-up periods; |
• | the fact that if the Trust Account is liquidated, including in the event we are unable to complete an initial business combination within the required time period, our Sponsor has agreed to indemnify us to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which we have entered into an acquisition agreement or claims of any third party (other than our independent public accountants) for services rendered or products sold to us, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account; |
• | the continued indemnification of our existing directors and officers and the continuation of our directors’ and officers’ liability insurance after the Business Combination; |
• | the fact that, in exchange for serving on the Board, each of our independent directors, Messrs. Bort, Cramer and Gatto, received a nominal economic interest through the transfer from our Sponsor of 25,000 Founder Shares at their original purchase price of $0.002 per share. If the Company fails to complete an initial business combination by January 22, 2023, these Founder Shares will become worthless. As a result, our independent directors may have a conflict of interest in determining whether a particular business is an appropriate business with which to effectuate the Company’s initial business combination; |
• | the fact that our Sponsor, officers and directors will lose their entire investment in us and will not be reimbursed for any out-of-pocket |
• | the fact that our Sponsor, officers and directors would hold the following number of shares in the Post-Combination Company at the closing of the Business Combination: |
Name of Person/Entity |
Number of shares of Common Stock |
Value of Common Stock (1) |
||||||
Gores Metropoulos Sponsor II, LLC (2) |
15,175,000 | $ | 151,750,000 | |||||
Alec Gores (2) |
15,175,000 | $ | 151,750,000 | |||||
Dean Metropoulos |
0 | $ | 0 | |||||
Andrew McBride |
0 | $ | 0 | |||||
Randall Bort |
25,000 | $ | 250,000 | |||||
Michael Cramer |
25,000 | $ | 250,000 | |||||
Joseph Gatto |
25,000 | $ | 250,000 |
(1) | Assumes a value of $10.00 per share, the deemed value of the Common Stock in the Business Combination. |
(2) | Represents shares held by the Sponsor which is controlled indirectly by Mr. Gores. Mr. Gores may be deemed to beneficially own 11,175,000 shares of Class F Stock and 4,000,000 shares of Common Stock to be purchased under the Sponsor Subscription Agreement, provided, however, that the Sponsor may choose to syndicate such shares pursuant to the Sponsor Subscription Agreement (and the Company currently expects that all such shares will be syndicated), and ultimately exercises voting and dispositive power of the securities held by the Sponsor. Voting and disposition decisions with respect to such securities are made by Mr. Gores. Mr. Gores disclaims beneficial ownership of these securities except to the extent of any pecuniary interest therein. |
• | the fact that, at the closing of the Business Combination, we will enter into the Registration Rights Agreement with the Registration Rights Holders, which provides for registration rights to Registration Rights Holders and their permitted transferees; |
• | the fact that we entered into a Subscription Agreement with our Sponsor, pursuant to which our Sponsor has committed to purchase 4,000,000 shares of Class A Stock (which will be reclassified into Common Stock upon the effectiveness of the Amended and Restated Certificate of Incorporation) in the PIPE Investment for an aggregate commitment of approximately $40,000,000, provided that our Sponsor has the right to syndicate the Class A Stock (which will be reclassified into Common Stock upon the effectiveness of the Amended and Restated Certificate of Incorporation) purchased under such Sponsor Subscription Agreement in advance of the closing of the Business Combination; and |
• | the fact that we will reimburse our Sponsor for the fees and expenses it incurs in connection with the Business Combination. |
• | First Merger Sub will merge with and into Sonder, with Sonder continuing as the Surviving Corporation of the First Merger; |
• | immediately following the First Merger and as part of the same overall transaction as the First Merger, the Surviving Corporation will merge with and into Second Merger Sub, with Second Merger Sub continuing as the Surviving Entity of the Second Merger; |
• | in connection with the Business Combination, we will adopt the proposed Amended and Restated Certificate of Incorporation effective prior to the effective time of the First Merger; |
• | in connection with the Business Combination, holders of shares of Sonder Common Stock (following the conversion of each issued and outstanding share of Sonder Preferred Stock and the Sonder Convertible Notes into shares of Sonder Common Stock prior to the effective time of the First Merger) will be entitled to receive a number of shares of newly-issued Common Stock equal to the Per Share Sonder Common Stock Consideration for each such share of Sonder Common Stock held by such holder immediately prior to the effective time of the First Merger. Holders of shares of Sonder Special Voting Common Stock will be entitled to receive a number of shares of newly-issued Post-Combination Company Special Voting Common Stock equal to the Per Share Sonder Special Voting Stock Consideration for each such share of Sonder Special Voting Common Stock held by such holder immediately prior to the effective time of the First Merger; |
• | in connection with the Business Combination, each Sonder Stock Option, to the extent then outstanding and unexercised, will automatically be converted into an option, subject to the same terms and conditions |
as were applicable to the corresponding Sonder Stock Option prior to the closing of the Business Combination, to acquire a number of shares of Common Stock (rounded down to the nearest whole share) equal to (i) the number of shares of Sonder Common Stock subject to the Sonder Stock Option immediately prior to the effective time of the First Merger multiplied by (ii) the Option Exchange Ratio (rounded down to the nearest whole number of shares of Common Stock), at a per share exercise price equal to (x) the per share exercise price of the Sonder Stock Option immediately prior to the effective time of the First Merger divided by (y) the Option Exchange Ratio (rounded up to the nearest whole cent); |
• | in connection with the Business Combination, each share of Sonder Canada Exchangeable Common Shares will be exchanged into a new series of the same class of virtually identical Post-Combination Canada Exchangeable Common Shares exchangeable for Common Stock upon the completion of the First Merger; |
• | at the closing of the Business Combination, the Registration Rights Holders will enter into the Registration Rights Agreement, pursuant to which, (a) any (i) outstanding share of Common Stock or any Private Placement Warrants, (ii) shares of Common Stock issued or issuable upon the conversion of the Class F Stock and upon exercise of the Private Placement Warrants, and (iii) shares of Common Stock issued as Earn Out Shares or issuable upon the conversion of any Earn Out Shares, in each case, held by the Sonder Stockholders, and (b) any other equity security of the Company issued or issuable with respect to any such share of Common Stock by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise, will be entitled to registration rights; and |
• | following the closing of the Business Combination, the foregoing consideration to be paid to the Sonder equityholders may be further increased by amounts payable in respect of Earn Out Shares, of up to an aggregate of 14,500,000 shares of Common Stock. |
(1) | For more information about the ownership interests of our Initial Stockholders, including our Sponsor, prior to the Business Combination, please see the section titled “ Beneficial Ownership of Securities |
(1) | All subsidiaries are directly or indirectly owned 100% by Sonder Holdings Inc. except (i) Sonder Canada Inc. as described in note (2) below, and (ii) Sonder’s Middle East subsidiaries which are beneficially owned and controlled by Sonder International Holdings Ltd and have a locally resident shareholder of record, as required under local ownership regulations. |
(2) | Sonder Group Holdings LLC owns 100% of the common shares of Sonder Canada Inc., which carry 100% of the voting rights. Canadian shareholders of Sonder Canada Inc. own non-voting exchangeable shares constituting less than 30% of the total shares outstanding of Sonder Canada Inc. |
(1) | For more information about the ownership interests of our Initial Stockholders, including our Sponsor, following the Business Combination, please see the section titled “ Beneficial Ownership of Securities. |
(2) | The PIPE Investors’ ownership percentage includes 4,000,000 shares of Class A Stock to be purchased under the Sponsor Subscription Agreement, and such shares are consequently excluded from the Initial Stockholders’ ownership percentage. |
(3) | The ownership interests of the Sonder Stockholders (i) include the Rollover Options, assuming an Option Exchange Ratio equal to the Per Share Sonder Common Stock Consideration and excluding any additional Discounted Earn Out Option Amount, which will be determined on or prior to the consummation of the Business Combination (please see the section titled “ Summary—Treatment of Sonder Equity Awards |
(4) | For more information about the ownership interests of the Sonder equityholders following the Business Combination, please see the section titled “ Beneficial Ownership of Securities |
(5) | These ownership percentages assume (i) no exercise of redemption rights by our Public Stockholders, (ii) no issuance of Earn Out Shares, (iii) inclusion of the Rollover Options calculated on the basis described in note (3) above, and (iv) the exercise of all outstanding Sonder warrants and conversion of Sonder convertible notes into Common Stock. |
(6) | All subsidiaries are directly or indirectly owned 100% by Sonder Holdings Inc. except (i) Sonder Canada Inc. as described in note (7) below, and (ii) Sonder’s Middle East subsidiaries, which are beneficially owned and controlled by Sonder International Holdings Ltd and have a locally resident shareholder of record, as required under local ownership regulations. |
(7) | Sonder Group Holdings LLC owns 100% of the common shares of Sonder Canada Inc., which carry 100% of the voting rights. Canadian shareholders of Sonder Canada Inc. own nonvoting exchangeable shares constituting less than 30% of the total shares outstanding of Sonder Canada Inc. |
($ and shares in thousands) |
Assuming No Earn Out Target |
Triggering Event I (3) Achieved |
Triggering Event II (4) Achieved |
Triggering Event III (5) Achieved |
Triggering Event IV (6) Achieved |
Triggering Event V (7) Achieved |
Triggering Event VI (8) Achieved |
|||||||||||||||||||||
Aggregate Company Stock Consideration |
$ | 2,176,603 | $ | 2,176,603 | $ | 2,176,603 | $ | 2,176,603 | $ | 2,176,603 | $ | 2,176,603 | $ | 2,176,603 | ||||||||||||||
Value of Earn Out Shares (1) |
$ | — | $ | 31,417 | $ | 68,875 | $ | 112,375 | $ | 161,917 | $ | 217,500 | $ | 279,125 | ||||||||||||||
Earn Out Shares |
0 | 2,417 | 4,833 | 7,250 | 9,667 | 12,083 | 14,500 | |||||||||||||||||||||
Aggregate Consideration (inclusive of $ Value of Earn Out Shares) |
$ | 2,176,603 | $ | 2,208,020 | $ | 2,245,478 | $ | 2,288,978 | $ | 2,338,520 | $ | 2,394,103 | $ | 2,455,728 | ||||||||||||||
Total Shares (Assuming No Redemptions) |
293,910 | 296,327 | 298,744 | 301,160 | 303,577 | 305,994 | 308,410 | |||||||||||||||||||||
Total Shares (Assuming Redemption of 15 Million Public Shares) |
278,909 | 281,326 | 283,742 | 286,159 | 288,576 | 290,992 | 293,409 | |||||||||||||||||||||
Post-Combination Company Stock Ownership of Public Stockholders Assuming No Redemptions (2) |
15.31 | % | 15.19 | % | 15.06 | % | 14.94 | % | 14.82 | % | 14.71 | % | 14.59 | % | ||||||||||||||
Post-Combination Company Stock Ownership of Public Stockholders Assuming Redemption of 15 Million Public Shares (2) |
10.76 | % | 10.66 | % | 10.57 | % | 10.48 | % | 10.40 | % | 10.31 | % | 10.22 | % |
(1) | Value of Earn-Out Shares based on Common Stock awarded at each Triggering Event multiplied by the applicable Common Share Price (i.e., the volume weighted average closing sale price of one share of Common Stock on the Nasdaq for a period of at least 10 days out of 20 consecutive trading days) required to be achieved at such Triggering Event. For example, Triggering Event IV will be met when the Common Share Price reaches $20.50, at which time approximately 2,416,667 Earn Out Shares will be issued with an implied value of approximately $49.54 million (based on a $20.50 stock price). The total Value of Earn Out Shares in Triggering Event IV would also include three tranches of approximately 2,416,667 Earn-Out shares per tranche with implied values, respectively, of approximately of $43.50 million (based on a $18.00 stock price from Triggering Event III), $37.46 million (based on a $15.50 stock price from Triggering Event II) and $31.42 million (based on a $13.00 stock price from Triggering Event I). |
(2) | Ownership numbers assume (a) no inclusion of any shares issuable upon the exercise of the Company Warrants, (b) an Option Exchange Ratio equal to the Per Share Company Common Stock Consideration (and excluding any Discounted Earn Out Option Amount), (c) the issuance of all shares of Common Stock reserved for issuance upon the exchange of Post-Combination Canada Exchangeable Shares following the Business Combination, (d) the issuance of all outstanding shares related to the exercise of Rollover Options are issued to former holders of Sonder stock options and (e) that no additional shares of Post-Combination Company Stock are issued between the closing of the Business Combination and the realization of any benchmark share prices for the Triggering Events in the earn out. |
(3) | “Triggering Event I” means the date on which the Common Share Price is greater than $13.00 within the Earn Out Period (i.e., the period beginning on the 180th day following the closing date of the Business Combination and ending on the fifth anniversary of such date). |
(4) | “Triggering Event II” means the date on which the Common Share Price is greater than $15.50 within the Earn Out Period. |
(5) | “Triggering Event III” means the date on which the Common Share Price is greater than $18.00 within the Earn Out Period. |
(6) | “Triggering Event IV” means the date on which the Common Share Price is greater than $20.50 within the Earn Out Period. |
(7) | “Triggering Event V” means the date on which the Common Share Price is greater than $23.00 within the Earn Out Period. |
(8) | “Triggering Event VI” means the date on which the Common Share Price is greater than $25.00 within the Earn Out Period. |
• | the applicable waiting period(s) under the HSR Act (and any extensions thereof, including any agreement with a governmental authority to delay consummation of the Business Combination) in respect of the Business Combination shall have expired or been terminated; |
• | there shall not have been enacted or promulgated any governmental order, statute, rule or regulation enjoining or prohibiting the consummation of the Business Combination; |
• | the Company shall have at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) remaining after the completion of the redemption offer and prior to the closing of the First Merger; |
• | the approval by the Company Stockholders of the Business Combination Proposal, the Nasdaq Proposal, the Charter Proposal and the Director Election Proposal shall have been obtained; |
• | the Sonder Requisite Approval to adopt the Merger Agreement and approve the transactions contemplated thereby, including the Business Combination, shall have been obtained; |
• | the Canadian Approvals shall have been delivered; |
• | the Common Stock to be issued in connection with the Business Combination (including the Common Stock to be issued pursuant to the earn out) shall have been approved for listing on Nasdaq, subject only to the requirement to have a sufficient number of round lot holders and official notice of listing; and |
• | the registration statement, of which this proxy statement/prospectus/consent solicitation statement is a part, shall have become effective under the Securities Act and no stop order suspending the effectiveness of the registration statement, of which this proxy statement/prospectus/consent solicitation statement is a part, shall have been issued and no proceedings for that purpose shall have been initiated or threatened by the SEC and not withdrawn. |
• | (i) the representations and warranties of the Company, First Merger Sub and Second Merger Sub (other than the representations and warranties of the Company, First Merger Sub and Second Merger Sub, with respect to corporate organization, due authorization, the Trust Account, brokers’ fees and capitalization) shall be true and correct (without giving effect to any limitation as to “materiality,” “material adverse effect” or any similar limitation) as of the date of the Merger Agreement and as of the closing date of the Business Combination as though then made (except to the extent such representations and warranties expressly relate to an earlier date, and in such case, shall be true and correct on and as of such earlier date), except, where the failure of such representations and warranties to be so true and correct, individually or in the aggregate, has not had, and would not reasonably be expected to result in, a material adverse effect on the Company, First Merger Sub and Second Merger Sub, taken as a whole, or a material adverse effect on the Company’s, First Merger Sub’s and Second Merger Sub’s ability to consummate the Business Combination, including the Mergers, and (ii) the representations and warranties of the Company, First Merger Sub and Second Merger Sub with respect to corporate organization, due authorization, the Trust Account, brokers’ fees and capitalization, shall be true and correct (without giving effect to any limitation as to “materiality,” “material adverse effect” or any similar limitation) in all material respects as of the date of the Merger Agreement and as of the closing date of the Business Combination as though then made (except to the extent such representations and warranties expressly relate to an earlier date, and in such case, shall be true and correct on and as of such earlier date); |
• | each of the covenants of the Company to be performed or complied with as of or prior to the closing of the Business Combination shall have been performed or complied with in all material respects; |
• | the receipt of a certificate signed by the chief executive officer of the Company certifying that the conditions in the two preceding bullets have been satisfied; |
• | the Current Company Certificate shall be amended and restated in the form of the Amended and Restated Certificate of Incorporation; and |
• | the Company shall have Closing Cash equal to or exceeding $500,000,000. “ Closing Cash |
• | (i) certain representations and warranties of Sonder with respect to due incorporation and the representations and warranties of Sonder with respect to due incorporation, due authorization, capitalization, brokers’ fees and affiliate arrangements shall be true and correct (without giving any effect to any limitation as to “materiality” or “Material Adverse Effect” or any similar limitation) in all material respects as of the date of the Merger Agreement and as of the closing date of the Business Combination as though then made (except to the extent such representations and warranties expressly |
relate to an earlier date, and in such case, shall be true and correct on and as of such earlier date), (ii) the representations and warranties of Sonder with respect to the lack of a Material Adverse Effect shall be true and correct in all respects as of the date of the Merger Agreement and as of the closing date of the Business Combination as though then made, and (iii) all other representations and warranties of Sonder shall be true and correct (without giving any effect to any limitation as to “materiality” or “Material Adverse Effect” or any similar limitation) as of the date of the Merger Agreement and as of the closing date of the Business Combination as though then made (except to the extent such representations and warranties expressly relate to an earlier date, and in such case, shall be true and correct on and as of such earlier date), except, where the failure of such representations and warranties to be so true and correct, individually and in the aggregate, has not had, and would not reasonably be expected to result in, a Material Adverse Effect; |
• | each of the covenants of Sonder to be performed or complied with as of or prior to the closing of the Business Combination shall have been performed or complied with in all material respects; and |
• | the receipt of a certificate signed by an officer of Sonder certifying that the conditions in the two preceding bullets have been satisfied. |
• | Ability to Transform the Hospitality Industry on a Global Scale . |
• | Resiliency in Adverse Economic Conditions. |
• | Market Leadership. |
• | Significant, Long-Term Growth Potential. |
• | Vertical Integration of Hospitality Services Drives Exceptional Economics and Value for Customers and Suppliers . |
• | Proven Leadership Team with Deep Technology, Operations and Hospitality Experience. |
• | Opinion of our Financial Advisor. The Business Combination—Opinion of the Company’s Financial Advisor |
• | Other Alternatives. |
• | Due Diligence. |
• | Stockholder Approval. |
• | Negotiated Terms of the Merger Agreem ent . |
• | Independent Director Role. |
• | Benefits May Not Be Achieved. |
• | Stockholder Vote. |
• | Redemption Risk. |
• | Closing Conditions. |
• | Litigation. |
• | Fees and Expenses. |
• | Liquidation of the Company. |
opportunities, which, if the Business Combination is not consummated, could result in us being unable to effect an initial business combination by January 22, 2023 and force us to liquidate and the Public Warrants to expire worthless. |
• | Other Risks. Risk Factors |
• | Interests of Certain Persons. The Business Combination—Interests of Certain Persons in the Business Combination—Interests of the Company Initial Stockholders and the Company’s Other Current Officers and Directors |
• | Evaluation of Alternative Transactions. |
• | Terms of the Merger Agreement. |
• | Consideration Received by Sonder Stockholders. |
• | Size of Post-Combination Company. |
• | Access to Capital. |
• | Benefit from Being a Public Company. |
• | Opportunity to Increase Earnings and Expand Prospects. |
• | Insider Letters. Insiders |
• | Primary Lock-Up Agreements Lock-Up Shares |
• | Conversion Share Lock-Up Agreements. |
their Conversion Shares until the earlier of (i) 180 days after the consummation of the Business Combination or (ii) the date that the resale registration statement on Form S-1 registering the PIPE Shares is declared effective by the SEC. |
• | Registration Rights Agreement. The Merger Agreement and Related Agreements—Registration Rights Agreement. |
• | Risk that the Business Combination may not be completed . |
• | Effects on reputation, business and employees if the Business Combination is not completed. |
• | Expenses and challenges . |
• | Costs of being a public company . |
• | Restrictions on operation of Sonder’s business prior to the closing. |
• | Interests of Sonder executive officers and directors . Interests of Certain Persons in the Business Combination—Interests of the Sonder Officers and Directors |
• | Other risks . Risk Factors |
1. | Business Combination Proposal Annex A , and the transactions contemplated thereby, including, among other things, the Business Combination (Proposal No. 1); |
2. | Nasdaq Proposal |
3. | Charter Proposal Annex B (Proposal No. 3); |
4. | Governance Proposals |
5. | Management Equity Incentive Plan Proposal |
6. | Incentive Plan Proposal |
7. | ESPP Proposal |
8. | Director Election Proposal |
9. | Adjournment Proposal |
• | the fact that our Initial Stockholders have agreed not to redeem any of the Founder Shares in connection with a stockholder vote to approve a proposed initial business combination; |
• | the fact that our Initial Stockholders have agreed to waive their rights to conversion price adjustments with respect to any Founder Shares they may hold in connection with the consummation of the Business Combination. Therefore, shares of Class F Stock held by the Initial Stockholders will convert on a one-for-one basis in connection with the consummation of the Business Combination (including the PIPE Investment); |
• | the fact that our Sponsor paid an aggregate of $25,000 for 11,500,000 Founder Shares and (after giving effect to the cancellation of 250,000 Founder Shares on March 7, 2021) the remaining 11,250,000 Founder Shares will have a significantly higher value at the time of the Business Combination, which if unrestricted and freely tradable would be valued at approximately $112.5 million but, given the restrictions on such shares, we believe such shares have less value; |
• | the fact that given the differential in the purchase price that our Sponsor paid for the Founder Shares as compared to the price of the Public Units sold in the Company IPO and the substantial number of shares of Common Stock that our Sponsor will receive upon conversion of the Founder Shares in connection with the Business Combination, our Sponsor and its affiliates may earn a positive rate of return on their investment even if the Common Stock trades below the price initially paid for the Public Units in the Company IPO and the Public Stockholders experience a negative rate of return following the completion of the Business Combination; |
• | the fact that our Initial Stockholders have agreed to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if we fail to complete an initial business combination by January 22, 2023; |
• | the fact that our Sponsor paid an aggregate of approximately $11,000,000 for its 5,500,000 Private Placement Warrants to purchase shares of Class A Stock, and that such Private Placement Warrants will expire worthless if an initial business combination is not consummated by January 22, 2023; |
• | the continued right of our Sponsor to hold our Class A Stock and the shares of Class A Stock to be issued to our Sponsor upon exercise of its Private Placement Warrants following the Business Combination, subject to certain lock-up periods; |
• | the fact that if the Trust Account is liquidated, including in the event we are unable to complete an initial business combination within the required time period, our Sponsor has agreed to indemnify us to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which we have entered into an acquisition agreement or claims of any third party (other than our independent public accountants) for services rendered or products sold to us, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account; |
• | the continued indemnification of our existing directors and officers and the continuation of our directors’ and officers’ liability insurance after the Business Combination; |
• | the fact that, in exchange for serving on the Board, each of our independent directors, Messrs. Bort, Cramer, and Gatto, received a nominal economic interest through the transfer from our Sponsor of 25,000 Founder Shares at their original purchase price of $0.002 per share. If the Company fails to complete an initial business combination by January 22, 2023, these Founder Shares will become worthless. As a result, our independent directors may have a conflict of interest in determining whether a particular business is an appropriate business with which to effectuate the Company’s initial business combination; |
• | the fact that our Sponsor, officers and directors will lose their entire investment in us and will not be reimbursed for any out-of-pocket expenses if an initial business combination is not consummated by January 22, 2023; |
• | the fact that our Sponsor, officers and directors would hold the following number of shares in the Post-Combination Company at the closing of the Business Combination: |
Name of Person/Entity |
Number of shares of Common Stock |
Value of Common Stock (1) |
||||||
Gores Metropoulos Sponsor II, LLC (2) |
15,175,000 | $ | 151,750,000 | |||||
Alec Gores (2) |
15,175,000 | $ | 151,750,000 | |||||
Dean Metropoulos |
0 | $ | 0 | |||||
Andrew McBride |
0 | $ | 0 | |||||
Randall Bort |
25,000 | $ | 250,000 | |||||
Michael Cramer |
25,000 | $ | 250,000 | |||||
Joseph Gatto |
25,000 | $ | 250,000 |
(1) | Assumes a value of $10.00 per share, the deemed value of the Common Stock in the Business Combination. |
(2) | Represents shares held by the Sponsor which is controlled indirectly by Mr. Gores. Mr. Gores may be deemed to beneficially own 11,175,000 shares of Class F Stock and 4,000,000 shares of Common Stock to be purchased under the Sponsor Subscription Agreement, provided, however, that the Sponsor may choose to syndicate such shares pursuant to the Sponsor Subscription Agreement (and the Company currently expects that all such shares will be syndicated), and ultimately exercises voting and dispositive power of the securities held by the Sponsor. Voting and disposition decisions with respect to such securities are made by Mr. Gores. Mr. Gores disclaims beneficial ownership of these securities except to the extent of any pecuniary interest therein. |
• | the fact that, at the closing of the Business Combination, we will enter into the Registration Rights Agreement with the Registration Rights Holders, which provides for registration rights to Registration Rights Holders and their permitted transferees; |
• | the fact that we entered into a Subscription Agreement with our Sponsor, pursuant to which our Sponsor has committed to purchase 4,000,000 shares of Class A Stock (which will be reclassified into Common Stock upon the effectiveness of the Amended and Restated Certificate of Incorporation) in the PIPE Investment for an aggregate commitment of approximately $40,000,000, provided that our |
Sponsor has the right to syndicate the Class A Stock (which will be reclassified into Common Stock upon the effectiveness of the Amended and Restated Certificate of Incorporation) purchased under such Sponsor Subscription Agreement in advance of the closing of the Business Combination; and |
• | the fact that we will reimburse our Sponsor for the fees and expenses it incurs in connection with the Business Combination. |
• | Certain of Sonder’s executive officers hold shares of Sonder Stock, the treatment of which is described in the section titled “ Proposal No. 1 The Business Combination Proposal. Beneficial Ownership of Securities |
• | Certain of Sonder’s executive officers and non-employee directors hold restricted stock units and/or options to purchase shares of Sonder Common Stock, which will be assumed by the Company upon the consummation of the Business Combination. The treatment of such equity awards in connection with the Business Combination is described in the section titled “ Proposal No. 1 The Business Combination Proposal. Beneficial Ownership of Securities |
• | The non-employee directors of Sonder have a direct or indirect ownership interest in Sonder Stock, which are described in the section titled “ Beneficial Ownership of Securities |
• | Sonder’s executive officers will be eligible to receive equity grants under the Management Equity Incentive Plan, under which 14,500,000 shares of Common Stock may be awarded. One-sixth of the share pool becomes available for issuance based on (including prior to but contingent on) the |
occurrence of each of six distinct triggering events, which occur if the stock price of the Common Stock is equal to or greater than $13.00, $15.50, $18.00, $20.50, $23.00, or $25.50, respectively, within the five year period after the expiration of the lock up period. For additional information, please see the section titled “ Proposal No. 5—The Management Equity Incentive Plan Proposal |
• | Sonder’s Chief Executive Officer, Francis Davidson, has agreed to sell 1,829,268 shares of Common Stock acquired in connection with the Business Combination to certain purchasers immediately following the consummation of the Business Combination for $8.20 per share for the purpose of satisfying personal tax liabilities related to his stock ownership and departure tax related to his move from Canada to the United States. The sales are conditioned upon the consummation of the Business Combination. |
• | Certain of Sonder’s directors and executive officers are expected to become directors and/or executive officers of the Post-Combination Company upon the consummation of the Business Combination. Specifically, the following individuals who are currently executive officers of Sonder are expected to become executive officers of the Post-Combination Company upon the consummation of the Business Combination, serving in the offices set forth opposite their names below. |
Name |
Position | |
Francis Davidson |
Chief Executive Officer and Director | |
Sanjay Banker |
President and Chief Financial Officer | |
Nicole LaFlamme |
Vice President of Human Resources | |
Satyen Pandya |
Chief Technology Officer | |
Ritesh Patel |
Vice President, Corporate Controller | |
Martin Picard |
Global Head of Real Estate | |
Philip Rothenberg |
General Counsel and Secretary |
• | In addition, the following individuals who are currently directors of Sonder are expected to become directors of the Post-Combination Company upon the consummation of the Business Combination: Manon Brouillette, Francis Davidson, Nabeel Hyatt and Frits Dirk van Paasschen. |
• | At the closing of the Business Combination, the Company will enter into the Registration Rights Agreement with the Registration Rights Holders (in which certain members of Sonder’s Board and affiliates are included), which provides for registration rights to Registration Rights Holders and their permitted transferees. |
Name |
Age |
Position | ||||
Dean Metropoulos |
74 | Chairman | ||||
Alec Gores |
68 | Chief Executive Officer and Director | ||||
Andrew McBride |
40 | Chief Financial Officer and Secretary | ||||
Randall Bort |
56 | Director | ||||
Michael Cramer |
68 | Director | ||||
Joseph Gatto |
63 | Director |
Name |
Age |
Position | ||||
Executive Officers |
||||||
Francis Davidson |
28 | Chief Executive Officer and Director | ||||
Sanjay Banker |
46 | President and Chief Financial Officer | ||||
Nicole LaFlamme |
41 | Vice President of Human Resources | ||||
Satyen Pandya |
47 | Chief Technology Officer | ||||
Ritesh Patel |
40 | Vice President, Corporate Controller | ||||
Martin Picard |
35 | Global Head of Real Estate | ||||
Philip Rothenberg |
51 | General Counsel and Secretary | ||||
Non-Employee Directors |
||||||
Manon Brouillette |
53 | Director | ||||
Nabeel Hyatt |
44 | Director | ||||
Vivek Pattipati |
35 | Director | ||||
Frits Dirk van Paasschen |
60 | Director |
Name |
Age |
Position | ||||
Executive Officers |
||||||
Francis Davidson |
28 | Chief Executive Officer and Director | ||||
Sanjay Banker |
46 | President and Chief Financial Officer | ||||
Nicole LaFlamme |
41 | Vice President of Human Resources | ||||
Satyen Pandya |
47 | Chief Technology Officer | ||||
Ritesh Patel |
40 | Vice President, Corporate Controller | ||||
Martin Picard |
35 | Global Head of Real Estate | ||||
Philip Rothenberg |
51 | General Counsel and Secretary | ||||
Non-Employee Directors |
||||||
Manon Brouillette |
53 | Director | ||||
Nabeel Hyatt |
44 | Director | ||||
Frits Dirk van Paasschen |
60 | Director |
• | Sonder’s actual results may differ materially from its forecasts and projections. |
• | Sonder’s results could be negatively affected by changes in travel, hospitality, real estate and vacation markets. |
• | Sonder may be unable to negotiate satisfactory leases or other arrangements to operate new properties, onboard new properties in a timely manner, or renew or replace existing properties on satisfactory terms or at all. |
• | Delays in real estate development and construction projects related to Sonder’s leases could adversely affect Sonder’s ability to generate revenue from such leased buildings. |
• | Newly leased properties may generate revenue later than Sonder estimated, and may be more difficult or expensive to integrate into Sonder’s operations than expected. |
• | Sonder’s limited operating history and evolving business make it difficult to evaluate its future prospects and challenges. |
• | Sonder may be unable to effectively manage its growth. |
• | The COVID-19 pandemic and efforts to reduce its spread have had, and will likely continue to have, a negative impact on Sonder. |
• | Sonder has incurred net losses each year since its inception, including net losses of $152.5 million and $122.5 million for the six months ended June 30, 2021 and 2020, respectively, and $250.3 million and $178.2 million for the years ended December 31, 2020 and December 31, 2019, respectively and an accumulated deficit of $672.9 million as of June 30, 2021, and Sonder may not be able to achieve or maintain future profitability. |
• | Costs relating to the opening, operation and maintenance of its leased properties could be higher than expected. |
• | Sonder depends on landlords to deliver properties in a suitable condition and to manage and maintain its properties. |
• | Sonder’s long-term and fixed-cost leases limit its flexibility. |
• | Under certain circumstances, Sonder’s leases may be subject to termination prior to the scheduled expiration of the term, which can be disruptive and costly. |
• | Sonder may be unable to attract new guests or generate repeat bookings. |
• | Sonder may be unable to introduce upgraded amenities, services or features for its guests in a cost-efficient manner. |
• | Sonder operates in the highly competitive hospitality market. |
• | Sonder uses third-party distribution channels to market its units, and these channels have historically accounted for a substantial percentage of Sonder’s bookings. |
• | Sonder’s results of operations vary from period-to-period, and historical performance may not be indicative of future performance. |
• | Sonder’s long-term success depends, in part, on Sonder’s ability to expand internationally, and Sonder’s business is susceptible to risks associated with international operations. |
• | Sonder’s business depends on its reputation and the strength of its brand, and any deterioration could adversely impact its market share, revenues, business, financial condition, or results of operations. |
• | Claims, lawsuits, and other proceedings could adversely affect Sonder’s business. |
• | Sonder may be subject to liability or reputational damage for the activities of its guests or other incidents at Sonder’s properties. |
• | Sonder is subject to claims and liabilities associated with potential health and safety issues and hazardous substances at properties. |
• | Sonder must attract and retain sufficient, highly skilled personnel and is subject to risks associated with the employment of hospitality personnel, including unionized labor. |
• | Sonder has identified material weaknesses in its internal control over financial reporting and may identify material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, which may result in material misstatements of its consolidated financial statements. |
• | Sonder relies on third parties for important services and technologies, and their availability and performance are uncertain. |
• | Sonder’s processing, storage, use and disclosure of personal data exposes it to risks of internal or external security breaches and could give rise to liabilities and/or damage to reputation. |
• | Failure to comply with privacy, data protection, consumer protection, marketing and advertising laws could adversely affect Sonder. |
• | Sonder faces risks related to its intellectual property. |
• | Sonder’s business is highly regulated across multiple jurisdictions, including evolving and sometimes uncertain short-term rental regulations and tax laws, which may limit Sonder’s growth or otherwise negatively affect it. |
• | Sonder’s indebtedness and credit facilities contain financial covenants and other restrictions that may limit its operational flexibility or otherwise adversely affect its results of operations. |
• | Our Initial Stockholders have agreed to vote in favor of the Business Combination described in this proxy statement/prospectus/consent solicitation statement, regardless of how our Public Stockholders vote. |
• | Because the Post-Combination Company will become a publicly listed company by virtue of a merger as opposed to an underwritten initial public offering (which uses the services of one or more underwriters), less due diligence on the Post-Combination Company may have been conducted. |
• | Our Sponsor, certain members of our Board and our officers have interests in the Business Combination that are different from or are in addition to other stockholders in recommending that stockholders vote in favor of approval of the Business Combination Proposal and approval of the other proposals described in this proxy statement/prospectus/consent solicitation statement. |
• | Our Sponsor, directors or officers or their affiliates may elect to purchase shares from Public Stockholders, which may influence a vote on a proposed Business Combination and the other proposals described in this proxy statement/prospectus/consent solicitation statement and reduce the public “float” of our Class A Stock. |
• | Our Public Stockholders will experience dilution as a consequence of, among other transactions, the issuance of Common Stock as consideration in the Business Combination. Having a minority share position may reduce the influence that our current stockholders have on the management of the Post-Combination Company |
• | We have no operating history and are subject to a mandatory liquidation and subsequent dissolution requirement. As such, there is a risk that we will be unable to continue as a going concern if we do not consummate an initial business combination by January 22, 2023. Unless we amend the Current Company Certificate (which requires the affirmative vote of 65% of all then outstanding shares of Class A Stock) and amend certain other agreements into which we have entered to extend the life of the Company, if we are unable to effect an initial business combination by January 22, 2023, we will be forced to liquidate and our warrants will expire worthless. |
• | Our ability to successfully effect the Business Combination and to be successful thereafter will be dependent upon the efforts of our key personnel, including the key personnel of Sonder whom we expect to stay with the Post-Combination Company. The loss of key personnel could negatively impact the operations and profitability of the Post-Combination Company and its financial condition could suffer as a result. |
• | We may waive one or more of the conditions to the Business Combination. |
• | The exercise of discretion by our directors and officers in agreeing to changes to the terms of or waivers of closing conditions in the Merger Agreement may result in a conflict of interest when determining whether such changes to the terms of the Merger Agreement or waivers of conditions are appropriate and in the best interests of our stockholders. |
• | We and Sonder will incur significant transaction and transition costs in connection with the Business Combination. |
• | If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share. |
• | We have no operating or financial history and our results of operations and those of the Post-Combination Company may differ significantly from the unaudited pro forma financial data included in this proxy statement/prospectus/consent solicitation statement. |
• | If the Business Combination’s benefits do not meet the expectations of investors, stockholders or financial analysts, the market price of our securities may decline. |
• | Past performance by Mr. Dean Metropoulos, Mr. Gores or The Gores Group, including our management team, may not be indicative of future performance of an investment in the Company or the Post-Combination Company. |
(in thousands, except per share amounts) |
As of and for the Six Months Ended June 30, 2021 |
As of December 31, 2020 and for the Period from July 21, 2020 (inception) through December 31, 2020 |
||||||
Statement of Operations Data: |
||||||||
Total operating expenses |
$ | 743 | $ | (40 | ) | |||
Net income (loss) |
$ | 761 | $ | (40 | ) | |||
Basic and diluted net loss per share, Class A Common Stock |
$ | (0.78 | ) | $ | — | |||
Basic and diluted net loss per share, Class F Common Stock |
$ | (0.78 | ) | $ | (0.00 | ) | ||
Balance Sheet Data: |
||||||||
Total assets |
$ | 451,614 | $ | 446 | ||||
Total liabilities |
$ | 40,557 | $ | 461 | ||||
Total redeemable ordinary shares |
$ | 450,000 | $ | — | ||||
Total stockholders’ deficit |
$ | (38,943 | ) | $ |
(15 |
) | ||
Cash Flow Data: |
||||||||
Net cash used in operating activities |
$ |
(2,176 |
) |
$ | (33 | ) | ||
Net cash used in investing activities |
$ | (450,018 | ) | $ | — | |||
Net cash provided by financing activities |
$ | 452,087 | $ | 193 |
Six Months Ended June 30, |
Years Ended December 31, |
|||||||||||||||
(in thousands) |
2021 |
2020 |
2020 |
2019 |
||||||||||||
Consolidated Statement of Operations and Comprehensive Loss |
||||||||||||||||
Revenue |
$ | 78,827 | $ | 60,722 | $ | 115,678 | $ | 142,910 | ||||||||
Costs and expenses: |
||||||||||||||||
Cost of revenue |
82,950 | 75,313 | 136,995 | 124,866 | ||||||||||||
Operations and support |
60,312 | 57,704 | 115,072 | 105,401 | ||||||||||||
General and administrative |
56,764 | 36,424 | 77,033 | 60,894 | ||||||||||||
Research and development |
7,385 | 9,478 | 17,552 | 15,737 | ||||||||||||
Sales and marketing |
7,399 | 7,297 | 12,848 | 7,115 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total costs and expenses |
$ | 214,810 | $ | 186,216 | $ | 359,500 | $ | 314,013 |
• | |
• | |
• | |
• | |
• | |
• | The Business Combination |
• | Company Management’s Discussion and Analysis of Financial Condition and Results of Operations Sonder Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Selected Unaudited Pro Forma Condensed Combined Statement of Operations Data (in thousands, except per share amounts) |
Pro Forma Combined (Assuming No Redemptions) |
Pro Forma Combined (Assuming Maximum Redemptions) |
||||||
For the Six Months Ended June 30, 2021 |
||||||||
Revenue |
$ | 78,827 | $ | 78,827 | ||||
Net loss |
$ | (142,004) | $ | (142,004) | ||||
Net loss per share of Class A Stock—basic and diluted |
$ | (0.52) | $ | (0.55) | ||||
Weighted-average shares outstanding of Class A Stock—basic and diluted |
274,424,088 | 259,422,872 | ||||||
For the Year Ended December 31, 2020 |
||||||||
Revenue |
$ | 115,678 | $ | 115,678 | ||||
Net loss |
$ | (251,661 | ) | $ | (251,661 | ) | ||
Net loss per share of Class A Stock—basic and diluted |
$ | (0.92 | ) | $ | (0.97 | ) | ||
Weighted-average shares outstanding of Class A Stock—basic and diluted |
274,424,088 | 259,422,872 | ||||||
Selected Unaudited Pro Forma Condensed Combined |
||||||||
Balance Sheet Data as of June 30, 2021 |
||||||||
Total assets |
$ | 836,030 | $ | 686,012 | ||||
Total liabilities |
$ | 244,655 | $ | 244,655 | ||||
Total stockholders’ equity |
$ | 591,375 | $ | 441,357 |
Trading Date |
Public Units (GMIIU) |
Public Shares (GMII) |
Public Warrants (GMIIW) |
|||||||||
April 29, 2021 |
$ | 10.25 | $ | 9.94 | $ | 1.43 | ||||||
[●], 2021 |
$ | [●] | $ | [●] | $ | [●] |
• | |
• | |
Pro Forma Combined Per Share Data |
Sonder Equivalent Pro Forma Per Share Data (3) |
|||||||||||||||||||||||
Gores Metropoulos II (Historical) |
Sonder (Historical) |
(Assuming No Redemptions Scenario) |
(Assuming Maximum Redemptions Scenario) |
(Assuming No Redemptions Scenario) |
(Assuming Maximum Redemptions Scenario) |
|||||||||||||||||||
As of and for the six months ended June 30, 2021 (1) |
||||||||||||||||||||||||
Book Value per share (2) |
$ | (3.46 | ) | $ | (77.76 | ) | $ | 2.15 | $ | 1.70 | $ | 3.64 | $ | 2.87 | ||||||||||
Net gain (loss) per share of Class A Stock—basic and diluted |
$ | (0.78 | ) | $ | (0.52 | ) | $ | (0.55 | ) | $ | (0.87 | ) | $ | (0.92 | ) | |||||||||
Weighted average shares outstanding of Class A Stock—basic and diluted |
39,779,006 | 274,424,088 | 259,422,872 | |||||||||||||||||||||
Net gain (loss) per share of Class F Stock—basic and diluted |
$ | (0.78 | ) | |||||||||||||||||||||
Weighted average shares outstanding of Class F Stock—basic and diluted |
11,339,779 | |||||||||||||||||||||||
Net loss per share of Sonder Common Stock—basic and diluted |
$ | (20.18 | ) | |||||||||||||||||||||
Weighted average shares of Sonder Common Stock outstanding—basic and diluted |
7,558,055 | |||||||||||||||||||||||
As of and for the Year Ended December 31, 2020 (1) |
||||||||||||||||||||||||
Net gain (loss) per share of Class A Stock—basic and diluted |
$ | — | $ | (0.92 | ) | $ | (0.97 | ) | $ | (1.55 | ) | $ | (1.64 | ) | ||||||||||
Weighted average shares outstanding of Class A Stock—basic and diluted |
— | 274,424,088 | 259,422,872 | |||||||||||||||||||||
Net gain (loss) per share of Class F Stock—basic and diluted |
$ | — | ||||||||||||||||||||||
Weighted average shares outstanding of Class F Stock—basic and diluted |
11,500,000 | |||||||||||||||||||||||
Net loss per share of Sonder Common Stock—basic and diluted |
$ | (39.98 | ) | |||||||||||||||||||||
Weighted average shares of Sonder Common Stock outstanding—basic and diluted |
6,261,247 |
(1) | There were no cash dividends declared in the period presented. |
(2) | Book value per share is calculated as (a) total equity excluding preferred shares divided by (b) the total number of shares of Common Stock outstanding classified in permanent equity. |
(3) | The equivalent per share data for Sonder is calculated by multiplying the combined pro forma per share data by the Per Share Sonder Common Stock Consideration set forth in the Merger Agreement. |
Public Units (GMIIU) (1) |
Public Shares (GMII) (2) |
Public Warrants (GMIIW) (2) |
||||||||||||||||||||||
High |
Low |
High |
Low |
High |
Low |
|||||||||||||||||||
Fiscal Year 2021: |
||||||||||||||||||||||||
Quarter ended June 30, 2021 |
$ | 10.95 | $ | 10.01 | $ | 11.00 | $ | 9.80 | $ | 2.06 | $ | 1.02 | ||||||||||||
Quarter ended March 31, 2021 |
$ | 10.11 | $ | 10.04 | $ | 9.90 | $ | 9.81 | $ | 1.49 | $ | 1.06 | ||||||||||||
Fiscal Year 2020: |
||||||||||||||||||||||||
Quarter ended December 31, 2020 |
N/A | N/A | N/A | N/A | N/A | N/A |
(1) | Began trading on January 20, 2021. |
(2) | Began trading on March 15, 2021. |
• | public health concerns, including but not limited to the COVID-19 pandemic or other future public health crises; |
• | immigration policies and other governmental restrictions on residency and travel; |
• | regional hostilities, war, terrorist attacks or civil unrest; |
• | imposition of travel- or hospitality-related taxes or surcharges by regulatory authorities; |
• | changes in regulations, policies, or conditions related to sustainability, including climate change, and the impact of climate change on seasonal destinations; |
• | work stoppages or labor unrest at a potential travel destination; or |
• | natural disasters or adverse weather conditions. |
• | forecast its revenue and budget for and manage its expenses, particularly at new buildings or in new markets; |
• | onboard new, high-quality units in a timely and cost-effective manner; |
• | keep existing units available for booking and reduce nights lost to repairs or other interruptions; |
• | comply with existing and new laws and regulations applicable to its business, including those related to the COVID-19 pandemic or any future public health crises; |
• | plan for and manage capital expenditures for current and future properties, including renovations of units and development of new properties, and manage relationships with landlords, developers, service providers and other partners; |
• | anticipate and respond to macroeconomic changes, fluctuations in travel and tourism, and other changes in the markets in which Sonder operates; |
• | maintain and enhance the value of its reputation and brand; |
• | effectively manage growth; |
• | successfully expand its geographic reach; |
• | hire, integrate and retain talented people at all levels of its organization; and |
• | successfully develop new features, amenities and services to enhance the experience of guests. |
• | the continued duration and scope of the COVID-19 pandemic, as well as whether and to what extent additional variants or resurgences of the virus occur (including due to the Delta variant of the virus); |
• | the COVID-19 pandemic’s negative impact on global and regional economies and economic activities, including the duration and magnitude of its impact on unemployment rates and consumer discretionary spending; |
• | the COVID-19 pandemic’s short- and long-term impact on the demand for travel and for accommodations in Sonder’s markets; |
• | the actions governments, businesses and individuals take in response to the COVID-19 pandemic, including quarantines and lock-downs, and limiting or banning travel and/or in-person gatherings; |
• | the COVID-19 pandemic’s effect on the financial health, budgets and business activities of current and potential landlords and property developers; |
• | the effectiveness, availability and deployment of COVID-19 vaccines; and |
• | how quickly economies, travel activity and demand for accommodations recover after the initial COVID-19 pandemic subsides. |
• | the impact of events beyond its control on demand for travel and accommodations in Sonder’s markets, such as the COVID-19 pandemic or a future public health crisis, changes in government travel restrictions or policies, labor or civic unrest, travel-related incidents and weather; |
• | failing to meet guests’ expectations, including increased expectations for cleanliness in light of the COVID-19 pandemic; |
• | increased competition from other hotel and alternative accommodation providers; |
• | any failure to provide differentiated, high-quality experiences at competitive prices; |
• | guests not receiving timely and adequate customer service support; |
• | failure to provide new or enhanced amenities and services that guests value; |
• | any disruptions in guests’ access to properties or to the properties’ amenities; |
• | ineffectiveness of marketing efforts; |
• | negative associations with, or failure to raise awareness of, Sonder’s brand; |
• | negative perceptions of the safety of Sonder’s properties or the security of its app or website; and |
• | macroeconomic and other conditions outside of Sonder’s control affecting travel and hospitality industries generally. |
• | the quantity of its Live Units; |
• | changes in Occupancy Rates and average length of stay (“ LOS |
• | seasonal fluctuations in demand, in certain markets; |
• | pricing fluctuations and the proportion of stays booked with extended stay discounts or promotional pricing; |
• | the timing and success of changes in amenities and services; |
• | the impact of the COVID-19 pandemic or other public health crises on demand for its accommodations, and on its operating expenses and capital requirements; |
• | the introduction and performance of new properties, amenities, technologies and services, including how quickly new properties are ready for booking by guests; |
• | the timing, cost and success of advertising and marketing initiatives; |
• | the amount and timing of financing activities, operating expenses and capital expenditures; |
• | changes in prevailing lease rates for attractive properties, and any adjustments in rental rates under existing leases; |
• | changes in cash flow due to lease renewals and amendments and new lease acquisitions and property openings; |
• | changes in cash flow due to the unpredictability of guest cancellations; |
• | economic instability in major markets, and fluctuations in exchange rates; |
• | the introduction of new properties, amenities or services by its competitors; |
• | declines or disruptions in the hospitality industry, particularly in cities or regions where Sonder generates substantial revenue; |
• | changes in relationships and/or fees with online travel agencies or other distribution channels; |
• | changes in the mix of stays booked through indirect distribution channels, rather than directly with Sonder; |
• | changes in the timing of holidays or other vacation events, or major local events in markets where Sonder operates, such as conferences, and music, film or other cultural festivals; |
• | unanticipated disruptions or costs due to regulatory issues, including changes in short-term rental laws, hotel regulations, or zoning or accessibility laws; |
• | litigation and settlement costs, including unforeseen attorneys’ fees and costs; |
• | new accounting pronouncements and changes in accounting standards or practices, particularly any affecting the recognition of revenue as well as accounting for leases; |
• | new laws or regulations, or new interpretations of existing laws or regulations, that harm its business or restrict the hospitality industry, travel, the Internet, e-commerce, online payments or online communications; and |
• | other risks described elsewhere herein. |
• | costs, risks and uncertainties associated with tailoring its services in international jurisdictions as needed to better address both the needs of guests, and the threats of local competitors; |
• | uncertainties in forecasting revenues and expenses in markets where Sonder has not previously operated; |
• | costs and risks associated with local and national laws and regulations governing zoning, hotels and other accommodations, accessibility, property development and rental, health and safety, climate change and sustainability, and labor and employment; |
• | differences in local real estate and hotel industry practices, including leasing and hotel transaction terms, that may make it difficult for Sonder to add properties on satisfactory terms or that may require higher than expected upfront payments, security deposits, repair and maintenance expenses, or other costs; |
• | operational and compliance challenges caused by distance, language, and cultural differences; |
• | costs and risks associated with compliance with international tax laws and regulations; |
• | costs and risks associated with compliance with the U.S. Foreign Corrupt Practices Act and other laws in the United States related to conducting business outside the U.S., as well as the laws and regulations of non-U.S. jurisdictions governing bribery and other corrupt business activities; |
• | costs and risks associated with human trafficking, modern slavery and forced labor reporting, training and due diligence laws and regulations in various jurisdictions; |
• | being subject to other laws and regulations, including laws governing online advertising and other Internet activities, email and other messaging, collection and use of personal information, ownership of intellectual property, taxation and other activities important to Sonder’s online business practices; |
• | competition with companies that understand the local market better than Sonder does or who have pre-existing relationships with landlords, property developers, regulators and guests in those markets; |
• | uncertainty and possibly adverse effects resulting from the U.K.’s exit from the European Union (commonly known as “ Brexit |
• | reduced or varied protection for intellectual property rights in some countries. |
• | the quality of guest service, and the guest experience from booking through check-out; |
• | the nature and severity of guest complaints; |
• | guest safety and their perception of safety; |
• | Sonder’s guest privacy and data security practices, and any breaches of privacy or data security; |
• | Sonder’s approach to health and cleanliness within units and common areas; |
• | publicized incidents in or around its properties; |
• | employee relations; |
• | any local concerns about perceived over-tourism or the effect of new hotels or other accommodations on affordable housing, noise or neighborhood congestion; |
• | Sonder’s support for local communities, and other community relations matters; |
• | Sonder’s approach to supply chain management, sustainability, human rights, and other matters relating to corporate social responsibility; |
• | Sonder’s ability to protect and use its brand and trademarks; and |
• | any perceived or alleged non-compliance with regulatory requirements. |
• | earnings being lower than anticipated in countries that have lower tax rates and higher than anticipated in countries that have higher tax rates; |
• | effects of certain non-tax-deductible |
• | changes in the valuation of its deferred tax assets and liabilities; |
• | adverse outcomes resulting from any tax audit, including transfer pricing adjustments with respect to intercompany transactions; |
• | its ability to utilize its net operating losses and other deferred tax assets; and |
• | changes in accounting principles or changes in tax laws and regulations, or the application of the tax laws and regulations, including possible U.S. changes to the deductibility of expenses attributable to foreign income or the foreign tax credit rules. |
• | increasing its vulnerability to general adverse economic and industry conditions; |
• | requiring it to dedicate a portion of its cash flow to principal and interest payments on its indebtedness, thereby reducing the availability of cash flow to fund working capital, location acquisition costs, capital expenditures, acquisitions and investments and other general corporate purposes; |
• | making it more difficult for it to optimally capitalize and manage the cash flow for its businesses; |
• | limiting its flexibility in planning for, or reacting to, changes in its businesses and the markets in which it operates, due in part to restrictive covenants in its debt instruments; |
• | possibly placing it at a competitive disadvantage compared to its competitors that have less debt, a lower cost of borrowing or less restrictive debt covenants; and |
• | limiting its ability to borrow additional funds or to borrow funds at rates or on other terms that it finds acceptable. |
• | the fact that our Initial Stockholders have agreed not to redeem any of the Founder Shares in connection with a stockholder vote to approve a proposed initial business combination; |
• | the fact that our Initial Stockholders have agreed to waive their rights to conversion price adjustments with respect to any Founder Shares they may hold in connection with the consummation of the Business Combination. Therefore, Class F Shares held by the Initial Stockholders will convert on a one-for-one basis in connection with the consummation of the Business Combination (including the PIPE Investment); |
• | the fact that our Sponsor paid an aggregate of $25,000 for 11,500,000 Founder Shares and (after giving effect to the cancellation of 250,000 Founder Shares on March 7, 2021) the remaining 11,250,000 Founder Shares will have a significantly higher value at the time of the Business Combination, which if unrestricted and freely tradable would be valued at approximately $112.5 million but, given the restrictions on such shares, we believe such shares have less value; |
• | the fact that given the differential in the purchase price that our Sponsor paid for the Founder Shares as compared to the price of the Public Units sold in the Company IPO and the substantial number of shares of Common Stock that our Sponsor will receive upon conversion of the Founder Shares in connection with the Business Combination, our Sponsor and its affiliates may earn a positive rate of return on their investment even if the Common Stock trades below the price initially paid for the Public Units in the Company IPO and the Public Stockholders experience a negative rate of return following the completion of the Business Combination; |
• | the fact that our Initial Stockholders have agreed to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if we fail to complete an initial business combination by January 22, 2023; |
• | the fact that our Sponsor paid an aggregate of approximately $11,000,000 for its 5,500,000 Private Placement Warrants to purchase shares of Class A Stock, and that such Private Placement Warrants will expire worthless if an initial business combination is not consummated by January 22, 2023; |
• | the continued right of our Sponsor to hold our Class A Stock and the shares of Class A Stock to be issued to our Sponsor upon exercise of its Private Placement Warrants following the Business Combination, subject to certain lock-up periods; |
• | the fact that if the Trust Account is liquidated, including in the event we are unable to complete an initial business combination within the required time period, our Sponsor has agreed to indemnify us to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of |
prospective target businesses with which we have entered into an acquisition agreement or claims of any third party (other than our independent public accountants) for services rendered or products sold to us, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account; |
• | the continued indemnification of our existing directors and officers and the continuation of our directors’ and officers’ liability insurance after the Business Combination; |
• | the fact that, in exchange for serving on the Board, each of our independent directors, Messrs. Bort, Cramer and Gatto, received a nominal economic interest through the transfer from our Sponsor of 25,000 Founder Shares at their original purchase price of $0.002 per share. If the Company fails to complete an initial business combination by January 22, 2023, these Founder Shares will become worthless. As a result, our independent directors may have a conflict of interest in determining whether a particular business is an appropriate business with which to effectuate the Company’s initial business combination; |
• | the fact that our Sponsor, officers and directors will lose their entire investment in us and will not be reimbursed for any out-of-pocket |
• | the fact that our Sponsor, officers and directors would hold the following number of shares in the Post-Combination Company at the closing of the Business Combination: |
Name of Person/Entity |
Number of shares of Common Stock |
Value of Common Stock (1) |
||||||
Gores Metropoulos Sponsor II, LLC (2) |
15,175,000 | $ | 151,750,000 | |||||
Alec Gores (2) |
15,175,000 | $ | 151,750,000 | |||||
Dean Metropoulos |
0 | $ | 0 | |||||
Andrew McBride |
0 | $ | 0 | |||||
Randall Bort |
25,000 | $ | 250,000 | |||||
Michael Cramer |
25,000 | $ | 250,000 | |||||
Joseph Gatto |
25,000 | $ | 250,000 |
(1) | Assumes a value of $10.00 per share, the deemed value of the Common Stock in the Business Combination. |
(2) | Represents shares held by the Sponsor which is controlled indirectly by Mr. Gores. Mr. Gores may be deemed to beneficially own 15,175,000 shares of Common Stock and ultimately exercises voting and dispositive power of the securities held by the Sponsor. Voting and disposition decisions with respect to such securities are made by Mr. Gores. Mr. Gores disclaims beneficial ownership of these securities except to the extent of any pecuniary interest therein. |
• | the fact that, at the closing of the Business Combination, we will enter into the Registration Rights Agreement with the Registration Rights Holders, which provides for registration rights to Registration Rights Holders and their permitted transferees; |
• | the fact that we entered into a Subscription Agreement with our Sponsor, pursuant to which our Sponsor has committed to purchase 4,000,000 shares of Class A Stock (which will be reclassified into Common Stock upon the effectiveness of the Amended and Restated Certificate of Incorporation) in the PIPE Investment for an aggregate commitment of approximately $40,000,000, provided that our Sponsor has the right to syndicate the Class A Stock (which will be reclassified into Common Stock upon the effectiveness of the Amended and Restated Certificate of Incorporation) purchased under such Sponsor Subscription Agreement in advance of the closing of the Business Combination; and |
• | the fact that we will reimburse our Sponsor for the fees and expenses it incurs in connection with the Business Combination. |
• | Approximately 217,660,300 shares of Common Stock (assuming (a) the issuance of approximately 28,898,199 shares related to the exercise of Rollover Options issued to former holders of Sonder stock options based on Sonder’s capitalization as of June 30, 2021, and (b) the issuance of each of the approximately 37,208,921 shares of our Common Stock reserved for issuance upon the exchange of Post-Combination Company Exchangeable Common Shares after the consummation of the Business Combination pursuant to the terms of the Merger Agreement based on Sonder’s capitalization as of June 30, 2021 (each of which corresponds to a share of Post-Combination Company Special Voting Common Stock to be issued in the Business Combination)) are anticipated to be issued to Sonder Securityholders as consideration in the Business Combination, valued at $10.00 per share. This represents approximately (a) 74.1% or 78.0% of the number of shares of Post-Combination Company |
Stock that will be outstanding following the consummation of the Business Combination, assuming the no redemption scenario and the maximum redemption scenario, respectively, and (b) 74.1% or 78.0% of the total voting power of the Post-Combination Company Stock that will be outstanding following the consummation of the Business Combination, assuming the no redemption scenario and the maximum redemption scenario, respectively. |
• | Up to 14,500,000 shares of Common Stock may be issuable to Sonder Securityholders as consideration in the Business Combination in respect of Earn Out Shares. Under the Merger Agreement, the Sonder Stockholders and holders of Assumed Warrants, if any, will be entitled to receive Earn Out Shares if the daily volume weighted average price (based on such trading day) of one share of Common Stock exceeds certain thresholds for a period of at least 10 days out of 20 consecutive trading days, as adjusted, at any time during the 5 year period beginning on the 180th day following the closing of the Business Combination (the “ Common Share Price |
• | 20,000,000 shares of Common Stock are expected to be issued in connection with the consummation of the Business Combination to the PIPE Investors pursuant to the PIPE Investment, at a price of $10.00 per share. This represents approximately (a) 6.8% or 7.2% of the number of shares of Post-Combination Company Stock that will be outstanding following the consummation of the Business Combination, assuming the no redemption scenario and the maximum redemption scenario, respectively, and (b) 6.8% or 7.2% of the total voting power of the Post-Combination Company Stock that will be outstanding following the consummation of the Business Combination, assuming the no redemption scenario and the maximum redemption scenario, respectively. |
• | The Company Warrants, comprised of Public Warrants to purchase 9,000,000 shares of Common Stock (following the reclassification of Class A Stock to Common Stock upon the effectiveness of the Amended and Restated Certificate of Incorporation) and Private Placement Warrants to purchase 5,500,000 shares of Common Stock (following the reclassification of Class A Stock to Common Stock upon the effectiveness of the Amended and Restated Certificate of Incorporation), will be outstanding following the Business Combination. The Public Warrants, which will not be redeemed in connection with the redemption by a Public Stockholder of a Public Share, will be exercisable at any time commencing on the later of 30 days after the completion of the Business Combination and January 22, 2022. The shares of Common Stock (following the reclassification of Class A Stock to Common Stock upon the effectiveness of the Amended and Restated Certificate of Incorporation) underlying the Public Warrants represent approximately (a) 2.9% or 3.1% of the fully-diluted number of shares of Post-Combination Company Stock immediately following the consummation of the Business Combination, assuming the no redemption scenario and the maximum redemption scenario, respectively, and (b) |
2.9% or 3.1% of the total fully-diluted voting power of the Post-Combination Company Stock immediately following the consummation of the Business Combination, assuming the no redemption scenario and the maximum redemption scenario, respectively. The 5,500,000 Private Placement Warrants outstanding following the Business Combination are not redeemable by the Post-Combination Company pursuant to the Company’s right to redeem the Public Warrants at $0.01 per Public Warrant under certain circumstances so long as they are held by the Sponsor or its permitted transferees. Otherwise, the Private Placement Warrants have terms and provisions that are identical to those of the Public Warrants sold as part of the Public Units in the Company IPO, including as to exercise price, exercisability and exercise period, except that the Private Placement Warrants may be exercised for cash or on a cashless basis so long as they are held by the Sponsor or its permitted transferees and are entitled to certain registration rights. If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Post-Combination Company and exercisable by the holders on the same basis as the Public Warrants included in the Public Units sold in the Company IPO. The Private Placement Warrants may not be transferred or sold by the Sponsor (other than to its permitted transferees) until 30 days following the consummation of the Business Combination. The shares of Common Stock (following the reclassification of Class A Stock to Common Stock upon the effectiveness of the Amended and Restated Certificate of Incorporation) underlying the Private Placement Warrants represent approximately (x) 1.8% or 1.9% of the fully-diluted number of shares of Post-Combination Company Stock immediately following the consummation of the Business Combination, assuming the no redemption scenario and the maximum redemption scenario, respectively, and (y) 1.8% or 1.9% of the total fully-diluted voting power of the Post-Combination Company Stock immediately following the consummation of the Business Combination, assuming the no redemption scenario and the maximum redemption scenario, respectively. |
• | The Post-Combination Company will reserve approximately 4.9%, 12% and 2% of the number of outstanding shares of the Post-Combination Company’s Common Stock on a fully diluted basis (as of immediately following the Business Combination) pursuant to the Management Equity Incentive Plan, the Incentive Plan, and the ESPP and expects to grant equity awards under each of the Management Equity Incentive Plan, the Incentive Plan, and the ESPP. The granted awards, when vested and settled or exercisable, may result in the issuance of additional shares up to the amount of the share reserve under the Management Equity Incentive Plan, the Incentive Plan, and the ESPP, respectively. |
• | The Post-Combination Company may determine, subject to the receipt of any stockholder or stock exchange approvals that may be required, to issue additional shares of Common Stock or other equity securities of equal or senior rank in connection with privately negotiated transactions following the consummation of the Business Combination. |
• | your proportionate ownership interest in the Post-Combination Company will decrease; |
• | the relative voting strength of each previously outstanding share of Post-Combination Company Stock will be diminished; or |
• | the market price of the Common Stock and the Public Warrants may decline. |
• | any derivative action or proceeding brought on behalf of the Post-Combination Company; |
• | any action asserting a claim of breach of a fiduciary duty owed by any director, stockholder, officer or other employee of the Post-Combination Company or the Post-Combination Company’s stockholders; |
• | any action arising pursuant to any provision of the DGCL, the Amended and Restated Certificate of Incorporation or the Amended and Restated Bylaws; or |
• | any action asserting a claim governed by the internal affairs doctrine. |
• | changes in the valuation of our deferred tax assets and liabilities; |
• | expected timing and amount of the release of any tax valuation allowances; |
• | tax effects of stock-based compensation; |
• | costs related to intercompany restructurings; |
• | changes in tax laws, regulations or interpretations thereof; or |
• | lower than anticipated future earnings in jurisdictions where we have lower statutory tax rates and higher than anticipated future earnings in jurisdictions where we have higher statutory tax rates. |
• | actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to the Post-Combination Company; |
• | changes in the market’s expectations about the Post Combination Company’s operating results; |
• | the public’s reaction to our press releases, our other public announcements and our filings with the SEC; |
• | speculation in the press or investment community; |
• | success of competitors; |
• | our operating results failing to meet the expectation of securities analysts or investors in a particular period; |
• | changes in financial estimates and recommendations by securities analysts concerning the Post-Combination Company or the market in general; |
• | operating and stock price performance of other companies that investors deem comparable to the Post-Combination Company; |
• | changes in laws and regulations affecting the Post-Combination Company’s business; |
• | commencement of, or involvement in, litigation involving the Post-Combination Company; |
• | changes in the Post-Combination Company’s capital structure, such as future issuances of securities or the incurrence of additional debt; |
• | the volume of shares of our Common Stock available for public sale; |
• | any major change in the Post-Combination Company’s Board or management; |
• | sales of substantial amounts of Common Stock by our directors, officers or significant stockholders or the perception that such sales could occur; |
• | the realization of any of the risk factors presented in this proxy statement/prospectus/consent solicitation statement; |
• | additions or departures of key personnel; |
• | failure to comply with the requirements of Nasdaq; |
• | failure to comply with the Sarbanes-Oxley Act or other laws or regulations; |
• | actual, potential or perceived control, accounting or reporting problems; |
• | changes in accounting principles, policies and guidelines; and |
• | general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations, health epidemics and pandemics (including the ongoing COVID-19 public health emergency), acts of war or terrorism. |
• | the realization of any of the risk factors presented in this proxy statement/prospectus/consent solicitation statement; |
• | actual or anticipated differences in our estimates, or in the estimates of analysts, for our revenues, Adjusted EBITDA, results of operations, level of indebtedness, liquidity or financial condition; |
• | additions and departures of key personnel; |
• | failure to comply with the requirements of Nasdaq; |
• | failure to comply with the Sarbanes-Oxley Act or other laws or regulations; |
• | future issuances, sales, resales or repurchases or anticipated issuances, sales, resales or repurchases, of our securities; |
• | publication of research reports about the Company; |
• | the performance and market valuations of other similar companies; |
• | commencement of, or involvement in, litigation involving Sonder or us; |
• | broad disruptions in the financial markets, including sudden disruptions in the credit markets; |
• | speculation in the press or investment community; |
• | actual, potential or perceived control, accounting or reporting problems; |
• | changes in accounting principles, policies and guidelines; and |
• | other events or factors, including those resulting from infectious diseases, health epidemics and pandemics (including the ongoing COVID-19 public health emergency), natural disasters, war, acts of terrorism or responses to these events. |
• | labor availability and costs for hourly and management personnel; |
• | profitability of our products and services, especially in new markets and due to seasonal fluctuations; |
• | changes in interest rates; |
• | impairment of long-lived assets; |
• | macroeconomic conditions, both nationally and locally; |
• | negative publicity relating to the Post-Combination Company’s business; |
• | changes in consumer preferences and competitive conditions; |
• | expansion to new markets; and |
• | fluctuations in commodity prices. |
• | where the holder of Post-Combination Canada Exchangeable Common Shares is a resident for tax purposes; |
• | whether the holder of Post-Combination Canada Exchangeable Common Shares exchanges such shares by way of redemption, retraction or has their shares purchased by us or Sonder Exchange ULC, an unlimited liability company existing under the laws of the Province of British Columbia (“ Exchange ULC |
• | how long the shareholder has held the Post-Combination Canada Exchangeable Common Shares. |
• | the audited financial statements of the Company as of December 31, 2020 and for the period from July 21, 2020 (inception) through December 31, 2020, prepared in accordance with GAAP, and the unaudited financial statements of the Company as of and for the six months ended June 30, 2021; and |
• | the audited financial statements of Sonder as of and for the fiscal years ended December 31, 2020 and December 31, 2019, prepared in accordance with GAAP, and the unaudited financial statements of Sonder as of and for the period ended June 30, 2021. |
• | Sonder’s actual results may differ materially from its forecasts and projections; |
• | Sonder’s results could be negatively affected by changes in travel, hospitality, real estate and vacation markets; |
• | Sonder may be unable to negotiate satisfactory leases or other arrangements to operate new properties, onboard new properties in a timely manner, or renew or replace existing properties on satisfactory terms or at all; |
• | Delays in real estate development and construction projects related to Sonder’s leases could adversely affect Sonder’s ability to generate revenue from such leased buildings; |
• | Newly leased properties may generate revenue later than Sonder estimated, and may be more difficult or expensive to integrate into Sonder’s operations than expected; |
• | Sonder’s limited operating history and evolving business make it difficult to evaluate its future prospects and challenges; |
• | Sonder may be unable to effectively manage its growth; |
• | The COVID-19 pandemic and efforts to reduce its spread have had, and will likely continue to have, a negative impact on Sonder; |
• | Sonder has a history of net losses and may not be able to achieve or maintain future profitability; |
• | Costs relating to the opening, operation and maintenance of its leased properties could be higher than expected; |
• | Sonder depends on landlords to deliver properties in a suitable condition and to manage and maintain its properties; |
• | Sonder’s long-term and fixed-cost leases limit its flexibility; |
• | Under certain circumstances, Sonder’s leases may be subject to termination prior to the scheduled expiration of the term, which can be disruptive and costly; |
• | Sonder may be unable to attract new guests or generate repeat bookings; |
• | Sonder may be unable to introduce upgraded amenities, services or features for its guests in a cost-efficient manner; |
• | Sonder operates in the highly competitive hospitality market; |
• | Sonder uses third-party distribution channels to market its units, and these channels have historically accounted for a substantial percentage of Sonder’s bookings; |
• | Sonder’s results of operations vary from period-to-period, and historical performance may not be indicative of future performance; |
• | Sonder’s long-term success depends, in part, on Sonder’s ability to expand internationally, and Sonder’s business is susceptible to risks associated with international operations; |
• | Sonder’s business depends on its reputation and the strength of its brand, and any deterioration could adversely impact its market share, revenues, business, financial condition, or results of operations; |
• | Claims, lawsuits, and other proceedings could adversely affect Sonder’s business; |
• | Sonder may be subject to liability or reputational damage for the activities of its guests or other incidents at Sonder’s properties; |
• | Sonder is subject to claims and liabilities associated with potential health and safety issues and hazardous substances at properties; |
• | Sonder must attract and retain sufficient, highly skilled personnel and is subject to risks associated with the employment of hospitality personnel, including unionized labor; |
• | Sonder has identified material weaknesses in its internal control over financial reporting and may identify material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, which may result in material misstatements of its consolidated financial statements; |
• | Sonder’s processing, storage, use and disclosure of personal data exposes it to risks of internal or external security breaches and could give rise to liabilities and/or damage to reputation; |
• | Failure to comply with privacy, data protection, consumer protection, marketing and advertising laws could adversely affect Sonder; |
• | Sonder faces risks related to its intellectual property; |
• | Sonder’s business is highly regulated across multiple jurisdictions, including evolving and sometimes uncertain short-term rental regulations and tax laws, which may limit Sonder’s growth or otherwise negatively affect it; |
• | Sonder’s indebtedness and credit facilities contain financial covenants and other restrictions that may limit its operational flexibility or otherwise adversely affect its results of operations; |
• | possible delays in closing the Business Combination, whether due to the inability to obtain Company stockholder or regulatory approval, litigation relating to the Business Combination or the failure to satisfy any of the conditions to closing the Business Combination, as set forth in the Merger Agreement; |
• | any waivers of the conditions to closing the Business Combination as may be permitted in the Merger Agreement; |
• | the ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition, and the ability of the Post-Combination Company to manage its growth and expand its business operations effectively following the consummation of the Business Combination; |
• | any failures of the Post-Combination Company to manage its growth and expand its business operations effectively following the consummation of the Business Combination; |
• | the volatility of the market price and liquidity of Common Stock and other securities of the Company; and |
• | the increasingly competitive environment in which the Post-Combination Company will operate. |
• | Bureau of Labor Statistics, the principal fact-finding agency for the Department of Labor in the field of labor, economics, and statistics; |
• | Euromonitor International (“ Euromonitor |
• | Gartner, Inc. (“ Gartner |
• | Skift Research (“ Skift |
• | STR, Inc. (“ STR |
• | TravelPulse.org (“ TravelPulse |
1. | Business Combination Proposal Annex A , and the transactions contemplated thereby, including, among other things, the Business Combination (Proposal No. 1); |
2. | Nasdaq Proposal |
3. | Charter Proposal Annex B (Proposal No. 3); |
4. | Governance Proposals non-binding advisory basis, a separate proposal with respect to certain governance provisions in the Amended and Restated Certificate of Incorporation in accordance with SEC requirements (Proposal No. 4); |
5. | Management Equity Incentive Plan Proposal |
6. | Incentive Plan Proposal |
7. | ESPP Proposal |
8. | Director Election Proposal |
9. | Adjournment Proposal |
• | the fact that our Initial Stockholders have agreed not to redeem any of the Founder Shares in connection with a stockholder vote to approve a proposed initial business combination; |
• | the fact that our Initial Stockholders have agreed to waive their rights to conversion price adjustments with respect to any Founder Shares they may hold in connection with the consummation of the |
Business Combination. Therefore, shares of Class F Stock held by the Initial Stockholders will convert on a one-for-one basis in connection with the consummation of the Business Combination (including the PIPE Investment); |
• | the fact that our Sponsor paid an aggregate of $25,000 for 11,500,000 Founder Shares and (after giving effect to the cancellation of 250,000 Founder Shares on March 7, 2021) the remaining 11,250,000 Founder Shares will have a significantly higher value at the time of the Business Combination, which if unrestricted and freely tradable would be valued at approximately $112.5 million but, given the restrictions on such shares, we believe such shares have less value; |
• | the fact that given the differential in the purchase price that our Sponsor paid for the Founder Shares as compared to the price of the Public Units sold in the Company IPO and the substantial number of shares of Common Stock that our Sponsor will receive upon conversion of the Founder Shares in connection with the Business Combination, our Sponsor and its affiliates may earn a positive rate of return on their investment even if the Common Stock trades below the price initially paid for the Public Units in the Company IPO and the Public Stockholders experience a negative rate of return following the completion of the Business Combination; |
• | the fact that our Initial Stockholders have agreed to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if we fail to complete an initial business combination by January 22, 2023; |
• | the fact that our Sponsor paid an aggregate of approximately $11,000,000 for its 5,500,000 Private Placement Warrants to purchase shares of Class A Stock, and that such Private Placement Warrants will expire worthless if an initial business combination is not consummated by January 22, 2023; |
• | the continued right of our Sponsor to hold our Class A Stock and the shares of Class A Stock to be issued to our Sponsor upon exercise of its Private Placement Warrants following the Business Combination, subject to certain lock-up periods; |
• | the fact that if the Trust Account is liquidated, including in the event we are unable to complete an initial business combination within the required time period, our Sponsor has agreed to indemnify us to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which we have entered into an acquisition agreement or claims of any third party (other than our independent public accountants) for services rendered or products sold to us, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account; |
• | the continued indemnification of our existing directors and officers and the continuation of our directors’ and officers’ liability insurance after the Business Combination; |
• | the fact that, in exchange for serving on the Board, each of our independent directors, Messrs. Bort, Cramer, and Gatto, received a nominal economic interest through the transfer from our Sponsor of 25,000 Founder Shares at their original purchase price of $0.002 per share. If the Company fails to complete an initial business combination by January 22, 2023, these Founder Shares will become worthless. As a result, our independent directors may have a conflict of interest in determining whether a particular business is an appropriate business with which to effectuate the Company’s initial business combination; |
• | the fact that our Sponsor, officers and directors will lose their entire investment in us and will not be reimbursed for any out-of-pocket |
• | the fact that our Sponsor, officers and directors would hold the following number of shares in the Post-Combination Company at the closing of the Business Combination: |
Name of Person/Entity |
Number of shares of Common Stock |
Value of Common Stock (1) |
||||||
Gores Metropoulos Sponsor II, LLC (2) |
15,175,000 | $ | 151,750,000 | |||||
Alec Gores (2) |
15,175,000 | $ | 151,750,000 | |||||
Dean Metropoulos |
0 | $ | 0 | |||||
Andrew McBride |
0 | $ | 0 | |||||
Randall Bort |
25,000 | $ | 250,000 | |||||
Michael Cramer |
25,000 | $ | 250,000 | |||||
Joseph Gatto |
25,000 | $ | 250,000 |
(1) | Assumes a value of $10.00 per share, the deemed value of the Common Stock in the Business Combination. |
(2) | Represents shares held by the Sponsor which is controlled indirectly by Mr. Gores. Mr. Gores may be deemed to beneficially own 11,175,000 shares of Class F Stock and 4,000,000 shares of Common Stock to be purchased under the Sponsor Subscription Agreement, provided, however, that the Sponsor may choose to syndicate such shares pursuant to the Sponsor Subscription Agreement (and the Company currently expects that all such shares will be syndicated), and ultimately exercises voting and dispositive power of the securities held by the Sponsor. Voting and disposition decisions with respect to such securities are made by Mr. Gores. Mr. Gores disclaims beneficial ownership of these securities except to the extent of any pecuniary interest therein. |
• | the fact that, at the closing of the Business Combination, we will enter into the Registration Rights Agreement with the Registration Rights Holders, which provides for registration rights to Registration Rights Holders and their permitted transferees; |
• | the fact that we entered into a Subscription Agreement with our Sponsor, pursuant to which our Sponsor has committed to purchase 4,000,000 shares of Class A Stock (which will be reclassified into Common Stock upon the effectiveness of the Amended and Restated Certificate of Incorporation) in the PIPE Investment for an aggregate commitment of approximately $40,000,000, provided that our Sponsor has the right to syndicate the Class A Stock (which will be reclassified into Common Stock upon the effectiveness of the Amended and Restated Certificate of Incorporation) purchased under such Sponsor Subscription Agreement in advance of the closing of the Business Combination; and |
• | the fact that we will reimburse our Sponsor for the fees and expenses it incurs in connection with the Business Combination. |
• | you may send another proxy card with a later date; |
• | you may notify our Secretary in writing to Gores Metropoulos II, Inc., 6260 Lookout Road, Boulder, CO 80301, before the Special Meeting that you have revoked your proxy; or |
• | you may attend the Special Meeting, revoke your proxy, and vote in person via the virtual meeting platform, as indicated above. |
• | if you hold Public Units, separate the underlying Public Shares and Public Warrants; |
• | check the box on the enclosed proxy card marked “Stockholder Certification” if you are not acting in concert or as a “group” (as defined in Section 13d-3 of the Exchange Act) with any other stockholder with respect to Public Shares; |
• | prior to 5:00 P.M., Eastern Time on [●] (two business days before the Special Meeting), tender your shares physically or electronically, identify to the Company the beneficial holder of the shares being redeemed and submit a request in writing that we redeem your Public Shares for cash to Computershare Trust Company, N.A., the Transfer Agent, at the following address: |
• | deliver your Public Shares either physically or electronically through DTC’s DWAC system to the Transfer Agent at least two business days before the Special Meeting. Stockholders seeking to exercise their redemption rights and opting to deliver physical certificates should allot sufficient time to obtain physical certificates from the Transfer Agent and time to effect delivery. Stockholders should generally allot at least two weeks to obtain physical certificates from the Transfer Agent. However, it may take longer than two weeks. Stockholders who hold their shares in street name will have to coordinate with their bank, broker or other nominee to have the shares certificated or delivered electronically. If you do not submit a written request and deliver your Public Shares as described above, your shares will not be redeemed. |
• | First Merger Sub will merge with and into Sonder, with Sonder continuing as the Surviving Corporation of the First Merger; |
• | immediately following the First Merger and as part of the same overall transaction as the First Merger, the Surviving Corporation will merge with and into Second Merger Sub, with Second Merger Sub continuing as the Surviving Entity of the Second Merger; |
• | in connection with the Business Combination, we will adopt the proposed Amended and Restated Certificate of Incorporation effective prior to the effective time of the First Merger; |
• | in connection with the Business Combination, holders of shares of Sonder Common Stock (following the conversion of each issued and outstanding share of Sonder Preferred Stock and the Sonder Convertible Notes into shares of Sonder Common Stock prior to the effective time of the First Merger) will be entitled to receive a number of shares of newly-issued Common Stock equal to the Per Share Sonder Common Stock Consideration for each such share of Sonder Common Stock held by such holder immediately prior to the effective time of the First Merger. Holders of shares of Sonder Special Voting Common Stock will be entitled to receive a number of shares of newly-issued Post-Combination Company Special Voting Common Stock equal to the Per Share Sonder Special Voting Stock Consideration for each such share of Sonder Special Voting Common Stock held by such holder immediately prior to the effective time of the First Merger; |
• | in connection with the Business Combination, each share of Sonder Canada Exchangeable Common Shares will be exchanged into the right to receive a new series of the same class of virtually identical Post-Combination Canada Exchangeable Common Shares exchangeable for Common Stock upon the completion of the First Merger; |
• | in connection with the Business Combination, each Sonder Stock Option, to the extent then outstanding and unexercised, will automatically be converted into an option, subject to the same terms and conditions as were applicable to the corresponding Sonder Stock Option prior to the closing of the Business Combination, to acquire a number of shares of Common Stock (rounded down to the nearest whole share) equal to (i) the number of shares of Sonder Common Stock subject to the Sonder Stock Option immediately prior to the effective time of the First Merger multiplied by (ii) the Option Exchange Ratio (rounded down to the nearest whole number of shares of Common Stock), at a per share exercise price equal to (x) the per share exercise price of the Sonder Stock Option immediately prior to the effective time of the First Merger divided by (y) the Option Exchange Ratio (rounded up to the nearest whole cent); |
• | at the closing of the Business Combination, the Registration Rights Holders will enter into the Registration Rights Agreement, pursuant to which, (a) any (i) outstanding share of Common Stock or any Private Placement Warrants, (ii) shares of Class F Stock reclassified into Common Stock and shares of Common Stock issued or issuable upon exercise of the Private Placement Warrants, and (iii) shares of Common Stock issued as Earn Out Shares or issuable upon the conversion of any Earn Out Shares, in each case, held by the Sonder Stockholders, and (b) any other equity security of the Company issued or issuable with respect to any such share of Common Stock by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise, will be entitled to registration rights; and |
• | following the closing of the Business Combination, the foregoing consideration to be paid to the Sonder equityholders may be further increased by amounts payable in respect of Earn Out Shares, of up to an aggregate of 14,500,000 shares of Common Stock. |
(1) | For more information about the ownership interests of our Initial Stockholders, including our Sponsor, prior to the Business Combination, please see the section titled “ Beneficial Ownership of Securities |
(1) | All subsidiaries are directly or indirectly owned 100% by Sonder Holdings Inc. except (i) Sonder Canada Inc. as described in Note (2) below, and (ii) Sonder’s Middle East subsidiaries which are beneficially owned and controlled by Sonder International Holdings Ltd and have a locally resident shareholder of record, as required under local ownership regulations. |
(2) | Sonder Group Holdings LLC owns 100% of the common shares of Sonder Canada Inc., which carry 100% of the voting rights. Canadian shareholders of Sonder Canada Inc. own non-voting exchangeable shares constituting less than 30% of the total shares outstanding of Sonder Canada Inc. |
(1) | For more information about the ownership interests of our Initial Stockholders, including our Sponsor, following the Business Combination, please see the section titled “ Beneficial Ownership of Securities. |
(2) | The PIPE Investors’ ownership percentage includes 4,000,000 shares of Class A Stock to be purchased under the Sponsor Subscription Agreement, and such shares are consequently excluded from the Initial Stockholders’ ownership percentage. |
(3) | The ownership interests of the Sonder Stockholders (i) include the Rollover Options, assuming an Option Exchange Ratio equal to the Per Share Sonder Common Stock Consideration and excluding any additional Discounted Earn Out Option Amount, which will be determined on or prior to the consummation of the Business Combination (please see the section titled “ Summary—Treatment of Sonder |
Equity Awards |
(4) | For more information about the ownership interests of the Sonder equityholders following the Business Combination, please see the section titled “ Beneficial Ownership of Securities |
(5) | These ownership percentages assume (i) no exercise of redemption rights by our Public Stockholders, (ii) no issuance of Earn Out Shares, (iii) inclusion of the Rollover Options calculated on the basis described in note (3) above, and (iv) the exercise of all outstanding Sonder warrants and conversion of Sonder convertible notes into Common Stock. |
(6) | All subsidiaries are directly or indirectly owned 100% by Sonder Holdings Inc. except (i) Sonder Canada Inc. as described in note (7) below, and (ii) Sonder’s Middle East subsidiaries which are beneficially owned and controlled by Sonder International Holdings Ltd and have a locally resident shareholder of record, as required under local ownership regulations. |
(7) | Sonder Group Holdings LLC owns 100% of the common shares of Sonder Canada Inc., which carry 100% of the voting rights. Canadian shareholders of Sonder Canada Inc. own nonvoting exchangeable shares constituting less than 30% of the total shares outstanding of Sonder Canada Inc. |
($ and shares in thousands) |
Assuming No Earn Out Target |
Triggering Event I (3) Achieved |
Triggering Event II (4) Achieved |
Triggering Event III (5) Achieved |
Triggering Event IV (6) Achieved |
Triggering Event V (7) Achieved |
Triggering Event VI (8) Achieved |
|||||||||||||||||||||
Aggregate Company Stock Consideration |
$ | 2,176,603 | $ | 2,176,603 | $ | 2,176,603 | $ | 2,176,603 | $ | 2,176,603 | $ | 2,176,603 | $ | 2,176,603 | ||||||||||||||
Value of Earn Out Shares (1) |
$ | — | $ | 31,417 | $ | 68,875 | $ | 112,375 | $ | 161,917 | $ | 217,500 | $ | 279,125 | ||||||||||||||
Earn Out Shares |
0 | 2,417 | 4,833 | 7,250 | 9,667 | 12,083 | 14,500 | |||||||||||||||||||||
Aggregate Consideration (inclusive of $ Value of Earn Out Shares) |
$ | 2,176,603 | $ | 2,208,020 | $ | 2,245,478 | $ | 2,288,978 | $ | 2,338,520 | $ | 2,394,103 | $ | 2,455,728 | ||||||||||||||
Total Shares (Assuming No Redemptions) |
293,910 | 296,327 | 298,744 | 301,160 | 303,577 | 305,994 | 308,410 | |||||||||||||||||||||
Total Shares (Assuming Redemption of 15 Million Public Shares) |
278,909 | 281,326 | 283,742 | 286,159 | 288,576 | 290,992 | 293,409 | |||||||||||||||||||||
Post-Combination Company Stock Ownership of Public Stockholders Assuming No Redemptions (2) |
15.31 | % | 15.19 | % | 15.06 | % | 14.94 | % | 14.82 | % | 14.71 | % | 14.59 | % | ||||||||||||||
Post-Combination Company Stock Ownership of Public Stockholders Assuming Redemption of 15 Million Public Shares (2) |
10.76 | % | 10.66 | % | 10.57 | % | 10.48 | % | 10.40 | % | 10.31 | % | 10.22 | % |
(1) | Value of Earn-Out Shares based on Common Stock awarded at each Triggering Event multiplied by the applicable Common Share Price (i.e., the volume weighted average closing sale price of one share of Common stock on the Nasdaq for a period of at least 10 days out of 20 consecutive trading days) required to be achieved at such Triggering Event. For example, Triggering Event IV will be met when the Common Share Price reaches $20.50, at which time approximately 2,416,667 Earn Out Shares will be issued with an implied value of approximately $49.54 million (based on a $20.50 stock price). The total Value of Earn Out Shares in Triggering Event IV would also include three tranches of approximately 2,416,667 Earn-Out shares per tranche with implied values, respectively, of approximately of $43.50 million (based on a $18.00 stock price from Triggering Event III), $37.46 million (based on a $15.50 stock price from Triggering Event II) and $31.42 million (based on a $13.00 stock price from Triggering Event I). |
(2) | Ownership numbers assume (a) no inclusion of any shares issuable upon the exercise of the Company Warrants, (b) an Option Exchange Ratio equal to the Per Share Company Common Stock Consideration (and excluding any Discounted Earn Out Option Amount), (c) the issuance of all shares of Common Stock reserved for issuance upon the exchange of Post-Combination Canada Exchangeable Shares following the Business Combination, (d) the issuance of all outstanding shares related to the exercise of Rollover Options are issued to former holders of Sonder stock options and (e) that no additional shares of Post-Combination Company Stock are issued between the closing of the Business Combination and the realization of any benchmark share prices for the Triggering Events in the earn out. |
(3) | “Triggering Event I” means the date on which the Common Share Price is greater than $13.00 within the Earn Out Period (i.e., the period beginning on the 180th day following the closing date of the Business Combination and ending on the fifth anniversary of such date). |
(4) | “Triggering Event II” means the date on which the Common Share Price is greater than $15.50 within the Earn Out Period. |
(5) | “Triggering Event III” means the date on which the Common Share Price is greater than $18.00 within the Earn Out Period. |
(6) | “Triggering Event IV” means the date on which the Common Share Price is greater than $20.50 within the Earn Out Period. |
(7) | “Triggering Event V” means the date on which the Common Share Price is greater than $23.00 within the Earn Out Period. |
(8) | “Triggering Event VI” means the date on which the Common Share Price is greater than $25.00 within the Earn Out Period. |
• | the applicable waiting period(s) under the HSR Act (and any extensions thereof, including any agreement with a governmental authority to delay consummation of the Business Combination) in respect of the Business Combination shall have expired or been terminated; |
• | there shall not have been enacted or promulgated any governmental order, statute, rule or regulation enjoining or prohibiting the consummation of the Business Combination; |
• | the Company shall have at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) remaining after the completion of the redemption offer and prior to the closing of the First Merger; |
• | the approval by the Company Stockholders of the Business Combination Proposal, the Nasdaq Proposal, the Charter Proposal and the Director Election Proposal shall have been obtained; |
• | the approval by the Sonder Stockholders of the Merger Agreement and each other agreement contemplated thereby shall have been obtained; |
• | the Canadian Approvals (as defined in the Merger Agreement) shall have been delivered; |
• | the Common Stock to be issued in connection with the Business Combination (including the Common Stock to be issued pursuant to the earn out) shall have been approved for listing on Nasdaq, subject only to the requirement to have a sufficient number of round lot holders and official notice of listing; and |
• | the registration statement, of which this proxy statement/prospectus/consent solicitation statement is a part, shall have become effective under the Securities Act and no stop order suspending the effectiveness of the registration statement, of which this proxy statement/prospectus/consent solicitation statement is a part, shall have been issued and no proceedings for that purpose shall have been initiated or threatened by the SEC and not withdrawn. |
• | (i) the representations and warranties of the Company, First Merger Sub and Second Merger Sub (other than the representations and warranties of the Company, First Merger Sub and Second Merger Sub, with respect to corporate organization, due authorization, the Trust Account, brokers’ fees and capitalization) shall be true and correct (without giving effect to any limitation as to “materiality,” “material adverse effect” or any similar limitation) as of the date of the Merger Agreement and as of the closing date of the Business Combination as though then made (except to the extent such representations and warranties expressly relate to an earlier date, and in such case, shall be true and correct on and as of such earlier date), except, where the failure of such representations and warranties to be so true and correct, individually or in the aggregate, has not had, and would not reasonably be expected to result in, a material adverse effect on the Company, First Merger Sub and Second Merger Sub, taken as a whole, or a material adverse effect on the Company’s, First Merger Sub’s and Second Merger Sub’s ability to consummate the Business Combination, including the Mergers, and (ii) the representations and warranties of the Company, First Merger Sub and Second Merger Sub with respect to corporate organization, due authorization, the Trust Account, brokers’ fees and capitalization, shall be true and correct (without giving effect to any limitation as to “materiality,” “material adverse effect” or any similar limitation) in all material respects as of the date of the Merger Agreement and as of the closing date of the Business Combination as though then made (except to the extent such representations and warranties expressly relate to an earlier date, and in such case, shall be true and correct on and as of such earlier date); |
• | each of the covenants of the Company to be performed or complied with as of or prior to the closing of the Business Combination shall have been performed or complied with in all material respects; |
• | the receipt of a certificate signed by the chief executive officer of the Company certifying that the conditions in the two preceding bullets have been satisfied; |
• | the Current Company Certificate shall be amended and restated in the form of the Amended and Restated Certificate of Incorporation; and |
• | the Company shall have Closing Cash equal to or exceeding $500,000,000. “ Closing Cash plus plus minus |
• | (i) certain representations and warranties of Sonder with respect to due incorporation and the representations and warranties of Sonder with respect to due incorporation, due authorization, capitalization, brokers’ fees and affiliate arrangements shall be true and correct (without giving any effect to any limitation as to “materiality” or “Material Adverse Effect” or any similar limitation) in all material respects as of the date of the Merger Agreement and as of the closing date of the Business Combination as though then made (except to the extent such representations and warranties expressly relate to an earlier date, and in such case, shall be true and correct on and as of such earlier date), |
(ii) the representations and warranties of Sonder with respect to the lack of a Material Adverse Effect shall be true and correct in all respects as of the date of the Merger Agreement and as of the closing date of the Business Combination as though then made, and (iii) all other representations and warranties of Sonder shall be true and correct (without giving any effect to any limitation as to “materiality” or “Material Adverse Effect” or any similar limitation) as of the date of the Merger Agreement and as of the closing date of the Business Combination as though then made (except to the extent such representations and warranties expressly relate to an earlier date, and in such case, shall be true and correct on and as of such earlier date), except, where the failure of such representations and warranties to be so true and correct, individually and in the aggregate, has not had, and would not reasonably be expected to result in, a Material Adverse Effect; |
• | each of the covenants of Sonder to be performed or complied with as of or prior to the closing of the Business Combination shall have been performed or complied with in all material respects; and |
• | the receipt of a certificate signed by an officer of Sonder certifying that the conditions in the two preceding bullets have been satisfied. |
• | considered and conducted an analysis of over 21 potential acquisition targets (other than Sonder) (the “ Other Potential Targets non-disclosure agreements with 21 of the Other Potential Targets; and |
• | ultimately engaged in detailed discussions, due diligence and negotiations with three Other Potential Targets or their representatives. |
• | Ability to Transform the Hospitality Industry on a Global Scale. |
• | Resiliency in Adverse Economic Conditions. COVID-19 pandemic, which allowed Sonder to significantly outperform the hotel industry and outperform its competitors. Additionally, our Board considered Sonder’s strong performance in generating direct bookings since the beginning of the COVID-19 pandemic. |
• | Market Leadership. |
• | Significant, Long-Term Growth Potential. app-based interface represent a large and growing part of the traveler base. Our Board additionally noted that Sonder plans to further its geographic expansion and to extend into additional product categories, such as vacation and resort destinations, a franchising model and a software solution for third party operators. |
• | Vertical Integration of Hospitality Services Drives Exceptional Economics and Value for Customers and Suppliers. end-to-end |
• | Proven Leadership Team with Deep Technology, Operations and Hospitality Experience. |
and that the management team is expected to remain with Sonder upon the closing of the Business Combination. Additionally, our Board believes that Sonder’s proven management team and strategy will help enable Sonder to deliver continued strategic growth. |
• | Opinion of our Financial Advisor. The Business Combination—Opinion of the Company’s Financial Advisor |
• | Other Alternatives. |
• | Due Diligence. |
• | Stockholder Approval. |
• | Negotiated Terms of the Merger Agreement. |
• | Independent Director Role. |
• | Benefits May Not Be Achieved. |
• | Stockholder Vote. |
• | Redemption Risk. |
• | Closing Conditions. |
• | Litigation. |
• | Fees and Expenses. |
• | Liquidation of the Company. |
• | Other Risks. Risk Factors |
• | Interests of Certain Persons. The Business Combination—Interests of Certain Persons in the Business Combination—Interests of the Company Initial Stockholders and the Company’s Other Current Officers and Directors |
• | Evaluation of Alternative Transactions. |
• | The Sponsor. |
• | Terms of the Merger Agreement. |
• | Consideration Received by Sonder Stockholders. |
• | Size of Post-Combination Company . |
• | Access to Capital. |
• | Benefit from Being a Public Company. |
• | Opportunity to Increase Earnings and Expand Prospects. |
• | Insider Letters. Insiders |
• | Voting and Support Agreements. |
• | Primary Lock-Up Agreements. Lock-Up Agreements. Under the Primary Lock-Up Agreements, such stockholders will agree not to, subject to certain exceptions, without the prior written consent of the Post-Combination Company Board, (i) sell or otherwise dispose of, or agree to sell or dispose of, any shares of Common Stock held by the stockholder immediately after the effective time of the Mergers or any shares of Common Stock issuable upon the exercise of options, warrants or other convertible securities to purchase shares of Common Stock held by the stockholder immediately after the effective time of the Mergers (the “Lock-Up SharesLock-Up Shares, or (iii) publicly announce any intention to effect any transaction specified in clause “(i)” or “(ii)” above |
for 180 days after the consummation of the Mergers; provided, if during such period the volume weighted average price of Common Stock for 10 trading days within any 20 consecutive trading day period is at least $12.50 per share or $15.00 per share, then following achievement of each such price, one-third of the shares of Common Stock owned by the Sonder Stockholder will no longer be subject to such transfer restrictions in the Primary Lock-Up Agreements (not to occur earlier than 90 days following the consummation of the Business Combination). |
• | Conversion Share Lock-Up Agreements. Lock-Up Agreements. Under the Conversion Share Lock-Up Agreements, such Sonder Noteholders will agree to be bound by restrictions on the transfer of their Conversion Shares until the earlier of (i) 180 days after the consummation of the Business Combination or (ii) the date that the resale registration statement on Form S-1 registering the PIPE Shares is declared effective by the SEC. |
• | Registration Rights Agreement The Merger Agreement and Related Agreements-Registration Rights Agreement. |
• | Risk that the Business Combination may not be completed . |
• | Effects on reputation, business and employees if the Business Combination is not completed. |
• | Expenses and challenges . |
• | Costs of being a public company . |
• | Restrictions on operation of Sonder’s business prior to the closing. |
business consistent with past practice and in accordance with specified restrictions, which might delay or prevent Sonder from undertaking certain business opportunities that might arise prior to the closing of the Business Combination. |
• | Interests of Sonder executive officers and directors . Interests of Certain Persons in the Business Combination—Interests of the Sonder Officers and Directors. |
• | Other risks . Risk Factors |
• | reviewed certain internal information relating to the business, earnings, cash flow, assets, liabilities and prospects of Sonder furnished to Moelis by the Company, including financial and other forecasts provided to, or discussed with, Moelis by the management of the Company. For additional information and such forecasts, please see the section titled “ The Business Combination—Certain Financial Projections Provided to Our Board |
• | reviewed certain internal information relating to expenses expected to result from the Business Combination; |
• | conducted discussions with members of management and representatives of the Company concerning the information described in the foregoing, as well as the business and prospects of Sonder and the Company generally; |
• | reviewed publicly available financial and stock market data of certain other companies in lines of business that Moelis deemed relevant; |
• | reviewed a draft, dated April 22, 2021, of the Merger Agreement; |
• | reviewed the Company’s and Sonder’s capital structure, both pre-Business Combination and post-Business Combination; and |
• | conducted such other financial studies and analyses and took into account such other information as Moelis deemed appropriate. |
Enterprise Value ($MM) |
Enterprise Value / Revenue |
|||||||||||||||
2019A |
2022E |
2023E |
||||||||||||||
Selected Digital Hospitality & Real Estate Companies |
||||||||||||||||
Airbnb |
$ | 120,534 | 25.1x | 18.7x | 15.0x | |||||||||||
Booking.com |
103,573 | 6.9x | 7.3x | 6.0x | ||||||||||||
Zillow |
37,482 | 14.3x | 4.7x | 3.2x | ||||||||||||
Expedia |
34,933 | 2.9x | 3.3x | 2.7x | ||||||||||||
Redfin |
8,530 | 11.2x | 4.9x | 3.7x | ||||||||||||
TripAdvisor |
7,104 | 4.6x | 5.5x | 4.7x |
Enterprise Value ($MM) |
Enterprise Value / Revenue |
|||||||||||||||
2019A |
2022E |
2023E |
||||||||||||||
Median |
9.0x | 5.2x | 4.2x | |||||||||||||
Mean |
10.8x | 7.4x | 5.9x | |||||||||||||
Selected Leasehold Operator companies |
||||||||||||||||
IWG |
$ | 14,850 | 4.3x | 4.0x | 3.8x | |||||||||||
Whitbread |
13,168 | 4.6x | 6.1x | 4.5x | ||||||||||||
NH Hotel Group |
5,260 | 2.8x | 3.1x | 2.7x | ||||||||||||
Meliá Hotels |
4,946 | 2.5x | 2.7x | 2.3x | ||||||||||||
Scandic |
4,687 | 2.3x | 2.5x | 2.2x | ||||||||||||
Pierre et Vacances |
4,024 | 2.1x | 2.1x | 2.1x | ||||||||||||
PPHE Hotel Group |
2,392 | 5.1x | 5.5x | 4.6x | ||||||||||||
Median |
2.8x | 3.1x | 2.7x | |||||||||||||
Mean |
3.4x | 3.7x | 3.2x | |||||||||||||
Selected Hotel C-Corps |
||||||||||||||||
Marriott International |
$ | 58,945 | 11.0x | 12.9x | 10.9x | |||||||||||
Hilton Worldwide |
44,037 | 11.7x | 13.0x | 11.1x | ||||||||||||
InterContinental Hotels |
16,030 | 7.7x | 8.8x | 7.7x | ||||||||||||
Accor |
12,739 | 5.2x | 6.5x | 5.6x | ||||||||||||
Hyatt Hotels |
10,147 | 4.0x | 5.1x | 4.4x | ||||||||||||
Wyndham Hotels & Resorts |
9,165 | 10.6x | 11.5x | 10.6x | ||||||||||||
Choice Hotels International |
7,220 | 13.4x | 13.3x | 12.1x | ||||||||||||
Median |
10.6x | 11.5x | 10.6x | |||||||||||||
Mean |
9.1x | 10.2x | 8.9x | |||||||||||||
WeWork |
||||||||||||||||
WeWork |
$ | 10,226 | 3.2x | 2.2x | 1.8x |
Revenue Growth |
Gross Margin |
|||||||||||||||||||
(2022E-2023E) |
2021 |
2022E |
2023E |
|||||||||||||||||
Selected Digital Hospitality & Real Estate Companies |
||||||||||||||||||||
Airbnb |
25.3 | % | 76.9 | % | 78.2 | % | 79.0 | % | ||||||||||||
Booking.com |
22.2 | % | N/A | N/A | N/A | |||||||||||||||
Zillow |
46.1 | % | 38.2 | % | 31.0 | % | 25.2 | % | ||||||||||||
Expedia |
21.9 | % | 77.5 | % | 80.6 | % | 81.7 | % | ||||||||||||
Redfin |
33.1 | % | 25.0 | % | 24.7 | % | 27.3 | % | ||||||||||||
TripAdvisor |
18.7 | % | 92.1 | % | 93.6 | % | 93.6 | % | ||||||||||||
Median |
23.7 | % | 76.9 | % | 78.2 | % | 79.0 | % | ||||||||||||
Mean |
27.9 | % | 61.9 | % | 61.6 | % | 61.3 | % | ||||||||||||
Selected Leasehold Operator companies |
||||||||||||||||||||
IWG |
7.2 | % | N/A | N/A | N/A | |||||||||||||||
Whitbread |
35.2 | % | N/A | N/A | N/A | |||||||||||||||
NH Hotel Group |
14.5 | % | N/A | N/A | N/A | |||||||||||||||
Meliá Hotels |
20.0 | % | N/A | N/A | N/A | |||||||||||||||
Scandic |
15.0 | % | N/A | N/A | N/A | |||||||||||||||
Pierre et Vacances |
2.3 | % | N/A | N/A | N/A | |||||||||||||||
PPHE Hotel Group |
18.0 | % | N/A | N/A | N/A |
Revenue Growth |
Gross Margin |
|||||||||||||||||||
(2022E-2023E) |
2021 |
2022E |
2023E |
|||||||||||||||||
Median |
15.0 | % | N/A | N/A | N/A | |||||||||||||||
Mean |
16.0 | % | N/A | N/A | N/A | |||||||||||||||
Selected Hotel C-Corps |
||||||||||||||||||||
Marriott International |
17.8 | % | 73.1 | % | 74.8 | % | N/A | |||||||||||||
Hilton Worldwide |
17.5 | % | 68.4 | % | 73.6 | % | 74.7 | % | ||||||||||||
InterContinental Hotels |
14.1 | % | 61.3 | % | 63.9 | % | 66.3 | % | ||||||||||||
Accor |
15.5 | % | N/A | N/A | N/A | |||||||||||||||
Hyatt Hotels |
16.6 | % | 44.4 | % | 45.4 | % | 45.3 | % | ||||||||||||
Wyndham Hotels & Resorts |
8.8 | % | 79.8 | % | 77.9 | % | N/A | |||||||||||||
Choice Hotels International |
10.2 | % | 95.4 | % | 95.9 | % | N/A | |||||||||||||
Median |
15.5 | % | 70.7 | % | 74.2 | % | 66.3 | % | ||||||||||||
Mean |
14.3 | % | 70.4 | % | 71.9 | % | 62.1 | % | ||||||||||||
WeWork |
||||||||||||||||||||
WeWork |
27.0 | % | 5.9 | % | 30.4 | % | 40.2 | % |
Reference Range |
Implied Total Enterprise Value Range ($MM) |
Consideration ($MM) |
||||||
EV / CY2022E Revenue |
$ | 1,831—$3,052 | $ | 2,200 | ||||
EV / CY2023E Revenue |
$ | 3,598—$5,757 | $ | 2,200 |
Implied Total Enterprise Value Range ($MM) |
Consideration ($MM) | |
$2,777 - $5,464 |
$2,200 |
($ in millions) |
||||||||||||||||||||
Financial Projections | ||||||||||||||||||||
Fiscal Year Ending December 31, |
2021E | 2022E | 2023E | 2024E | 2025E | |||||||||||||||
Revenue |
$ | 173 | $ | 610 | $ | 1,439 | $ | 2,634 | $ | 3,995 | ||||||||||
YoY Growth % |
49 | % | 253 | % | 136 | % | 83 | % | 52 | % | ||||||||||
Adjusted Gross Profit |
($ | 4 | ) | $ | 209 | $ | 664 | $ | 1,349 | $ | 2,134 | |||||||||
Gross Margin % |
(2 | %) | 34 | % | 46 | % | 51 | % | 53 | % | ||||||||||
Adjusted Total Property Level Costs |
($ | 63 | ) | ($ | 169 | ) | ($ | 356 | ) | ($ | 573 | ) | ($ | 871 | ) | |||||
Property Level Profit |
($ | 66 | ) | $ | 40 | $ | 308 | $ | 777 | $ | 1,263 | |||||||||
Property Level Profit Margin % |
(38 | %) | 7 | % | 21 | % | 29 | % | 32 | % | ||||||||||
Adjusted EBITDA |
($ | 257 | ) | ($ | 206 | ) | $ | 24 | $ | 421 | $ | 822 | ||||||||
Adjusted EBITDA Margin % |
(149 | %) | (34 | %) | 2 | % | 16 | % | 21 | % | ||||||||||
Capital Expenditures |
$ | 28 | $ | 49 | $ | 106 | $ | 154 | $ | 162 | ||||||||||
Cash Balance (1) |
$ | 626 | $ | 364 | $ | 276 | $ | 548 | $ | 1,218 |
(1) | Cash Balance excludes taxes and includes net interest expense and other miscellaneous one-time costs |
($ in millions) |
||||||||||||||||||||||||
Financial Projections | ||||||||||||||||||||||||
Fiscal Year Ending December 31, |
2021E (2) |
2022E | 2023E | 2024E | 2025E | Terminal Year (1) |
||||||||||||||||||
Total Revenue |
$ | 142.8 | $ | 610.5 | $ | 1,439.2 | $ | 2,633.8 | $ | 3,995.3 | $ | 3,995.3 | ||||||||||||
YoY Growth % |
50.6 | % | 253.2 | % | 135.8 | % | 83.0 | % | 51.7 | % | ||||||||||||||
Adjusted EBITDA |
($ | 202.1 | ) | ($ | 205.8 | ) | $ | 24.2 | $ | 420.7 | $ | 821.8 | $ | 821.8 | ||||||||||
Adjusted EBITDA Margin % |
(141.5 | %) | (33.7 | %) | 1.7 | % | 16.0 | % | 20.6 | % | ||||||||||||||
(-) Depreciation & Amortization |
(11.1 | ) | (23.0 | ) | (46.1 | ) | (79.5 | ) | (110.8 | ) | (161.9 | ) | ||||||||||||
Adjusted EBIT |
($ | 213.3 | ) | ($ | 228.8 | ) | ($ | 21.8 | ) | $ | 341.2 | $ | 710.9 | $ | 659.9 | |||||||||
(-) Cash Taxes @ 21.0% (3) |
— | — | — | (71.7 | ) | (149.3 | ) | (138.6 | ) | |||||||||||||||
Tax-Affected Adj. EBIT |
($ | 213.3 | ) | ($ | 228.8 | ) | ($ | 21.8 | ) | $ | 269.6 | $ | 561.6 | $ | 521.3 | |||||||||
(+) Depreciation & Amortization |
11.1 | 23.0 | 46.1 | 79.5 | 110.8 | 161.9 | ||||||||||||||||||
(-) Capital Expenditures |
(25.7 | ) | (49.3 | ) | (105.7 | ) | (154.4 | ) | (161.9 | ) | (161.9 | ) | ||||||||||||
(-) (Increase) / Decrease in Net Working Capital (1) |
2.2 | 0.7 | (0.8 | ) | 12.5 | 18.9 | 18.9 | |||||||||||||||||
Unlevered Free Cash Flow |
($ | 225.6 | ) | ($ | 254.5 | ) | ($ | 82.3 | ) | $ | 207.1 | $ | 529.5 | $ | 540.3 |
(1) | Change in Net Working Capital and Capital Expenditures assumed to equal 2025E projections; Depreciation and Amortization assumed to equal Capital Expenditures in terminal year. |
(2) | Solely includes projections for the second, third and fourth quarters of the fiscal year ended December 31, 2021. First quarter results and projections from 2021 are excluded. |
(3) | Net operating losses valued separately. |
NOL Projections | ||||||||||||||||||||
Fiscal Year Ending December 31, |
2021E (1) |
2022E | 2023E | 2024E | 2025E | |||||||||||||||
Federal NOL Beginning Balance |
$ | 379.0 | $ | 592.3 | $ | 821.1 | $ | 842.9 | $ | 570.0 | ||||||||||
(-) NOL (Utilized) / Generated |
213.3 | 228.8 | 21.8 | (273.0 | ) | (568.8 | ) | |||||||||||||
Federal NOL Ending Balance |
$ | 592.3 | $ | 821.1 | $ | 842.9 | $ | 570.0 | $ | 1.2 |
(1) | Solely includes projections for the second, third and fourth quarters of the fiscal year ending December 31, 2021. First quarter results and projections from 2021 are excluded. |
• | Adjusted Gross Profit (Loss) |
abatement (periods of free rent). Sonder’s non-GAAP view of Landlord Payments recognizes abatement from real estate owners at the time it is utilized in an effort to most accurately reflect the economic substance of the real estate contract. Sonder’s real estate leases typically have several months of abatement at the commencement of the lease. In contrast, GAAP rent straight lines abatement over the duration of the lease. |
• | Adjusted Gross Margin |
• | Property Level Costs |
• | Property Level Profit (Loss) |
• | Property Level Profit (Loss) Margin |
• | Adjusted EBITDA |
• | Forecasted growth in Sonder’s Total Portfolio, which is the sum of Live Units and Contracted Units, in each of the forecasted years. Live Units generate Bookable Nights which can ultimately generate revenue. Live Units represent the total number of units available for guest bookings on Sonder.com, the Sonder app and other channels at a given point in time, and are based on current and projected Contracted Units, historical and projected Lead Times, and historical and projected Opening Periods. Contracted Units represent units which have signed real estate contracts, but are not yet available for guests to book, and are based on both pre-COVID-19 pandemic and recent historical pace of signing, current and projected Real Estate team size, current and projected deal pipeline, and planned geographic expansion. Bookable Nights represents the total number of nights available for stays across all Live Units (excluding nights lost to full building closures greater than 30 nights), and are based on current and projected Live Units, and historical and projected full building closures greater than 30 nights. |
• | Forecasted increase in Revenue per Available Room in each of the forecasted years. Revenue per Available Room (RevPAR) represents Average Daily Rate multiplied by Occupancy Rate, expressed in U.S. dollars. Average Daily Rate (ADR) represents the average revenue earned per night occupied, expressed in U.S. dollars. Occupancy Rate (OR) represents the percentage of occupied nights out of the total available nights. Forecasted RevPAR is based on pre-COVID-19 pandemic historical growth rates, historical and forecasted overall market recovery coming out of the COVID-19 pandemic, historical and forecasted Sonder outperformance compared to Traditional Hotels, and historical and forecasted Sonder RevPAR initiatives (improved revenue management, anticipated loyalty and CRM initiatives, ancillary revenue opportunities, and additional distribution channels). |
• | Forecasted increase in Property Level Costs in each of the forecasted years. Property Level Costs represent variable costs directly associated with each of Sonder’s buildings, expressed in U.S. dollars. Property Level Costs, described in further detail immediately below, include (i) channel fees paid to Online Travel Agencies (OTAs), (ii) customer service costs, (iii) laundry/consumables costs, (iv) maintenance costs, and (v) utilities & insurance costs. |
• | Channel fees paid to OTAs are based on forecasted revenue, historical and forecasted channel mix, and historical and forecasted channel fees for distribution channels. Channel fees as a percentage of revenue are forecasted to remain relatively stable over the forecast period. |
• | Customer service costs are based on historical and forecasted customer service cost per Booked Night, and forecasted Booked Nights. Customer service costs per Booked Night are forecasted to moderately decrease over the forecast period based on historical and forecasted Property Level Cost initiatives designed to lower costs over time. |
• | Laundry / consumables costs are based on (i) historical and forecasted laundry / consumables cost per Checkout and (ii) forecasted Checkouts. Laundry/consumables costs per Checkout are forecasted to moderately decrease over the forecast period based on historical and forecasted Property Level Cost initiatives designed to lower costs over time. |
• | Maintenance costs are based on (i) historical and forecasted maintenance cost per Checkout and (ii) forecasted Checkouts. Maintenance costs per Checkout are forecasted to moderately decrease over the forecast period based on historical and forecasted Property Level Cost initiatives designed to lower costs over time. |
• | Utilities & insurance costs are based on (i) historical and forecasted utilities & insurance costs per Live Unit and (ii) forecasted Live Units. Utilities & insurance costs per Live Unit are forecasted to moderately decrease over the forecast period based on historical and forecasted Property Level Cost initiatives designed to lower costs over time. |
• | Forecasted increase in Landlord Payments in each of the forecasted years. Landlord Payments represent non-GAAP payments to real estate owners recognizing abatement at the time it is utilized |
(often at the commencement of a real estate contract), expressed in U.S. dollars. Landlord Payments in the forecasted years are based on forecasted Live Units, historical and forecasted abatement terms, historical and forecasted deal structures, and historical and forecasted rent levels. The increase in Landlord Payments for the forecast period is primarily driven by the forecasted Live Unit growth. |
• | Forecasted increase in Other Operating Expenses on a U.S. dollars basis in each of the forecasted years. Other Operating Expenses comprises Research & Development, General & Administrative, Sales & Marketing, Operations, Pre-Opening Costs (“POC”) and Capex Allowance. These costs primarily include department level expenses related to headquarters and city level employee salaries as well as expenses related to the onboarding of units. Other Operating Expenses are forecasted to increase on a U.S. dollars basis over the forecast period based on the forecasted increase in Total Portfolio, Booked Nights and Checkouts. |
• | |
• | |
• | |
• | the fact that given the differential in the purchase price that our Sponsor paid for the Founder Shares as compared to the price of the Public Units sold in the Company IPO and the substantial number of shares of Common Stock that our Sponsor will receive upon conversion of the Founder Shares in connection with the Business Combination, our Sponsor and its affiliates may earn a positive rate of return on their investment even if the Common Stock trades below the price initially paid for the Public Units in the Company IPO and the Public Stockholders experience a negative rate of return following the completion of the Business Combination; |
• | |
• | |
• | lock-up periods; |
• | |
ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which we have entered into an acquisition agreement or claims of any third party (other than our independent public accountants) for services rendered or products sold to us, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account; |
• | |
• | |
• | out-of-pocket |
• | |
Name of Person/Entity |
Number of shares of Common Stock |
Value of Common Stock (1) |
||||||
Gores Metropoulos Sponsor II, LLC (2) |
15,175,000 | $ | 151,750,000 | |||||
Alec Gores (2) |
15,175,000 | $ | 151,750,000 | |||||
Dean Metropoulos |
|
0 |
|
$ | 0 | |||
Andrew McBride |
0 | $ | 0 | |||||
Randall Bort |
25,000 | $ | 250,000 | |||||
Michael Cramer |
25,000 | $ | 250,000 | |||||
Joseph Gatto |
25,000 | $ | 250,000 |
(1) | Assumes a value of $10.00 per share, the deemed value of the Common Stock in the Business Combination. |
(2) | Represents shares held by the Sponsor which is controlled indirectly by Mr. Gores. Mr. Gores may be deemed to beneficially own 11,175,000 shares of Class F Stock and 4,000,000 shares of Common Stock to be purchased under the Sponsor Subscription Agreement, provided, however, that the Sponsor may choose to syndicate such shares pursuant to the Sponsor Subscription Agreement (and the Company currently expects that all such shares will be syndicated), and ultimately exercises voting and dispositive power of the securities held by the Sponsor. Voting and disposition decisions with respect to such securities are made by Mr. Gores. Mr. Gores disclaims beneficial ownership of these securities except to the extent of any pecuniary interest therein. |
• | |
• | |
• | |
• | Proposal No. 1 The Business Combination Proposal. Beneficial Ownership of Securities |
• | non-employee directors hold restricted stock units and/or options to purchase shares of Sonder Common Stock, which will be assumed by the Company upon the consummation of the Business Combination. The treatment of such equity awards in connection with the Business Combination is described in the section titled “Proposal No. 1 The Business Combination Proposal. Beneficial Ownership of Securities non-employee directors. |
• | non-employee directors of Sonder have a direct or indirect ownership interest in Sonder Stock, which are described in the section titled “Beneficial Ownership of Securities |
• | One-sixth of the share pool becomes available for issuance based on (including prior to but contingent on) the occurrence of each of six distinct triggering events, which occur if the stock price of the Common Stock is equal to or greater than $13.00, $15.50, $18.00, $20.50, $23.00, or $25.50, respectively, within the five year period after the expiration of the lock up period. For additional information, please see the section titled “Proposal No. 5—The Management Equity Incentive Plan Proposal |
• | |
from Canada to the United States. The sales are conditioned upon the consummation of the Business Combination. |
• | |
Name |
Position | |
Francis Davidson |
Chief Executive Officer and Director | |
Sanjay Banker |
President and Chief Financial Officer | |
Nicole LaFlamme |
Vice President of Human Resources | |
Satyen Pandya |
Chief Technology Officer | |
Ritesh Patel |
Vice President, Corporate Controller | |
Martin Picard |
Global Head of Real Estate | |
Philip Rothenberg |
General Counsel and Secretary |
• | |
• | |
Sources |
Uses |
|||||||||
CompanyCash (1) |
$ | 450,018,248 | Sonder Rollover (2) |
$ | 2,176,603,000 | |||||
PIPE Investment |
$ | 200,000,000 | Cash Proceeds to Sonder (1)(3) |
$ | 610,018,248 | |||||
Sonder Rollover (2) |
$ | 2,176,603,000 | Company Transaction Costs |
$ | 40,000,000 | |||||
|
|
|
|
|||||||
Total Sources |
$ | 2,826,621,248 | Total Uses (4) |
$ | 2,826,621,248 | |||||
|
|
|
|
(1) | Assumes no Company stockholder has exercised its redemption rights to receive cash from the Trust Account. This amount will be reduced by the amount of cash used to satisfy any redemptions. |
(2) | Amount represents $2,176,603,000 of stock consideration. Dollar amount represents the number of shares existing Sonder Securityholders will receive valued at a share price of $10.00. This amount is not impacted by the number of redemptions, the exercise of Rollover Options or the exchange of Sonder Canada Exchangeble Common Shares. |
(3) | Cash proceeds to Sonder is calculated based on the assumed approximately $450 million in Company cash and $200 million raised from the PIPE Investment less $40 million for estimated Company transaction costs. |
(4) | Totals may differ due to rounding. |
Sources |
Uses |
|||||||||
Company Cash (1) |
$ | 300,000,005 | Sonder Rollover (2) |
$ | 2,176,603,000 | |||||
PIPE Investment |
$ | 200,000,000 | Cash Proceeds to Sonder (1)(3) |
$ | 460,000,005 | |||||
Sonder Rollover (2) |
$ | 2,176,603,000 | Company Transaction Costs |
$ | 40,000,000 | |||||
|
|
|
|
|||||||
Total Sources |
$ | 2,676,603,005 | Total Uses (4) |
$ | 2,676,603,005 | |||||
|
|
|
|
(1) | Assumes approximately 33.3% of the outstanding shares of Class A Stock have been redeemed by the Company’s stockholders to receive cash from the Trust Account, reducing the amount of Company cash by approximately $150 million. |
(2) | Amount represents $2,176,603,000 of stock consideration. Dollar amount represents the number of shares existing Sonder Stockholders will receive valued at a share price of $10.00. This amount is not impacted by the number of redemptions, the exercise of Rollover Options or the exchange of Sonder Canada Exchangeble Common Shares. |
(3) | Cash proceeds to Sonder is calculated based on the assumed approximately $300 million in Company cash and $200 million raised from the PIPE Investment less $40 million for estimated Company transaction costs. |
(4) | Totals may differ due to rounding. |
Name |
Age |
Position | ||
Dean Metropoulos |
74 | Chairman | ||
Alec Gores |
68 | Chief Executive Officer | ||
Andrew McBride |
40 | Chief Financial Officer and Secretary | ||
Randall Bort |
56 | Director | ||
Michael Cramer |
68 | Director | ||
Joseph Gatto |
63 | Director |
Name |
Age |
Position | ||||
Executive Officers |
||||||
Francis Davidson |
28 | Chief Executive Officer and Director | ||||
Sanjay Banker |
46 | President and Chief Financial Officer | ||||
Nicole LaFlamme |
41 | Vice President of Human Resources | ||||
Satyen Pandya |
47 | Chief Technology Officer | ||||
Ritesh Patel |
40 | Vice President, Corporate Controller | ||||
Martin Picard |
35 | Global Head of Real Estate | ||||
Philip Rothenberg |
51 | General Counsel and Secretary | ||||
Non-Employee Directors |
||||||
Manon Brouillette |
53 | Director | ||||
Nabeel Hyatt |
44 | Director | ||||
Vivek Pattipati |
35 | Director | ||||
Frits Dirk van Paasschen |
60 | Director |
Name |
Age |
Position | ||||
Executive Officers |
||||||
Francis Davidson |
28 | Chief Executive Officer and Director | ||||
Sanjay Banker |
46 | President and Chief Financial Officer | ||||
Nicole LaFlamme |
41 | Vice President of Human Resources | ||||
Satyen Pandya |
47 | Chief Technology Officer | ||||
Ritesh Patel |
40 | Vice President, Corporate Controller | ||||
Martin Picard |
35 | Global Head of Real Estate | ||||
Philip Rothenberg |
51 | General Counsel and Secretary | ||||
Directors |
||||||
Francis Davidson |
28 | Chief Executive Officer and Director | ||||
Manon Brouillette |
53 | Director | ||||
Nabeel Hyatt |
44 | Director | ||||
Frits Dirk van Paasschen |
60 | Director |
Stakeholder |
Market Standoff Restrictions |
Shares subject to Market Standoff Restrictions |
Market Standoff Period 1 | |||
Initial Stockholders (the Sponsor and Randall Bort, Michael Cramer and Joseph Gatto, the Company’s independent directors) |
Registration Rights Agreement | Shares of Class F Stock acquired in the Company IPO |
180 days after the consummation of the Business Combination, but a portion of shares held may be earlier released upon the achievement of trading prices as described in this section. | |||
Private Placement Warrants and Class A Stock underlying the Private Placement Warrants | 30 days after the consummation of the Business Combination | |||||
Public Company Stockholders (excluding Initial Stockholders) | None | None | None | |||
Sonder Stockholders | Amended and Restated Bylaws of the Post-Combination Company | Company Common Stock received in connection with the Business Combination | 180 days after the consummation of the Business Combination, but a portion of shares held may be earlier released upon the achievement of trading prices as described in this section. | |||
Supporting Sonder Stockholders (certain Sonder Stockholders who are a party to a Voting and Support Agreement) |
Primary Lock-Up AgreementAmended and Restated Bylaws of the Post-Combination Company |
Company Common Stock received in connection with the Business Combination | 180 days after the consummation of the Business Combination, but a portion of shares held may be earlier released upon the achievement of trading prices as described in this section. |
Stakeholder |
Market Standoff Restrictions |
Shares subject to Market Standoff Restrictions |
Market Standoff Period 1 | |||
Sonder Noteholders with respect to Conversion Shares | Conversion Share Lock-Up Agreement |
Company Common Stock received in connection with the Business Combination | Earlier of 180 days or the effectiveness of the shelf registration statement registering the resale of the PIPE Shares | |||
PIPE Investors with respect to PIPE Shares | The PIPE Shares are restricted securities. The Company is required to file a shelf registration statement covering the resale of the PIPE Shares within 30 days after the consummation of the Business Combination. |
(1) | Company securityholders who become affiliates of the Post-Combination Company for purposes of Rule 144 under the Securities Act would be subject to additional resale restrictions of Rule 144. |
• | banks and financial institutions; |
• | insurance companies; |
• | brokers and dealers in securities, currencies or commodities; |
• | dealers or traders in securities subject to a mark-to-market |
• | regulated investment companies and real estate investment trusts; |
• | governmental organizations and qualified foreign pension funds; |
• | persons holding Class A Stock as part of a “straddle,” hedge, integrated transaction or similar transaction; |
• | U.S. holders (as defined below) whose functional currency is not the U.S. dollar; |
• | partnerships or other pass-through entities for U.S. federal income tax purposes (and investors in such entities); |
• | certain former citizens or long-term residents of the United States; |
• | controlled foreign corporations and passive foreign investment companies; |
• | any holder of Founder Shares; and |
• | tax-exempt entities. |
• | an individual who is a citizen or resident of the United States; |
• | a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized in or under the laws of the United States, any state thereof or the District of Columbia; |
• | an estate the income of which is subject to U.S. federal income tax regardless of its source; or |
• | a trust, if (i) a court within the United States is able to exercise primary supervision over the administration of such trust and one or more “United States persons” (within the meaning of the U.S. Tax Code) have the authority to control all substantial decisions of the trust or (ii) the trust validly elected to be treated as a United States person for U.S. federal income tax purposes. |
• | a non-resident alien individual, other than certain former citizens and residents of the United States subject to U.S. tax as expatriates; |
• | a foreign corporation; or |
• | an estate or trust that is not a U.S. holder; |
• | the gain is effectively connected with the conduct of a trade or business by the Non-U.S. holder within the United States (and, under certain income tax treaties, is attributable to a United States permanent establishment or fixed base maintained by the Non-U.S. holder); or |
• | we are or have been a “United States real property holding corporation” for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of the redemption or the period that the Non-U.S. holder held our Class A Stock, and, in the case where shares of our Class A Stock are regularly traded on an established securities market, the Non-U.S. holder has owned, directly or constructively, more than 5% of our Class A Stock at any time within the shorter of the five-year period preceding the redemption or such Non-U.S. holder’s holding period for the shares of our Class A Stock. |
• | insurance companies; |
• | tax-exempt entities or organizations (including an “individual retirement account” or “Roth IRA” as defined in Section 408 or 408A of the U.S. Tax Code); |
• | banks, broker-dealers, financial institutions; |
• | traders in securities that elect to mark to market; |
• | certain former citizens or long-term residents of the United States; |
• | partnerships or other pass-through entities for U.S. federal income tax purposes; |
• | holders who hold the Sonder Stock or our Public Shares as part of a hedge, straddle, constructive sale or conversion transaction (or who may have acquired the Sonder Stock or our Public Shares in a transaction subject to the gain rollover provisions of Section 1045 of the U.S. Tax Code) or as “qualified small business stock”; |
• | holders who are subject to the alternative minimum tax or the Medicare tax on net investment income provisions of the U.S. Tax Code; |
• | holders whose functional currency is not the U.S. dollar; or |
• | holders who acquired the Sonder Stock pursuant to the exercise of employee incentive stock options or otherwise as compensation, all of whom may be subject to tax rules that differ significantly from those summarized below. |
• | An individual who is a citizen or resident of the United States, as determined for U.S. federal income tax purposes; |
• | A corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized under the laws of the United States or any state thereof or the District of Columbia; |
• | A trust (i) the substantial decisions of which are controlled by one or more United States Persons (within the meaning of the U.S. Tax Code) and which is subject to the primary supervision of a United States court, or (ii) that has validly elected under applicable Treasury regulations to be treated as a United States person for U.S. federal income tax purposes; or |
• | An estate that is subject to U.S. federal income tax on its income regardless of source. |
• | No gain or loss will be recognized by a U.S. holder of Sonder Stock for U.S. federal income tax purposes on the exchange of its shares of Sonder Stock for Common Stock (including any Earn Out Shares) in the First Merger, except, in each case, with respect to cash received in lieu of fractional shares and imputed interest. |
• | Other than with respect to Earn Out Shares treated as imputed interest (as described below), the aggregate tax basis of the Common Stock, including any Earn Out Shares, received in the First Merger by a U.S. holder of Sonder Stock will be equal to the aggregate tax basis of the Sonder Stock it exchanged in the First Merger, except that such U.S. holder’s aggregate tax basis in the Common Stock will be reduced by the tax basis allocable to any fractional share interest in the Common Stock for which cash was received. |
• | Other than with respect to Earn Out Shares treated as imputed interest (as described below), the tax holding period of the Common Stock, including any Earn Out Shares, received in the First Merger by a U.S. holder of Sonder Stock, including any fractional interest for which such holder receives cash, will include the holding period of the Sonder Stock that it surrendered in exchange therefor in the First Merger. |
• | the applicable waiting period(s) under the HSR Act (and any extensions thereof, including any agreement with a governmental authority to delay consummation of the Business Combination) in respect of the Business Combination shall have expired or been terminated; |
• | there shall not have been enacted or promulgated any governmental order, statute, rule or regulation enjoining or prohibiting the consummation of the Business Combination; |
• | the Company shall have at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) remaining after the completion of the redemption offer and prior to the closing of the First Merger; |
• | the approval by the Company Stockholders of the Business Combination Proposal, the Nasdaq Proposal, the Charter Proposal and the Director Election Proposal shall have been obtained; |
• | the approval by the Sonder Stockholders of the Merger Agreement and each other agreement contemplated thereby shall have been obtained; |
• | the Canadian Approvals shall have been delivered; |
• | the Common Stock to be issued in connection with the Business Combination (including the Common Stock to be issued pursuant to the earn out) shall have been approved for listing on Nasdaq, subject only to the requirement to have a sufficient number of round lot holders and official notice of listing; and |
• | the registration statement, of which this proxy statement/prospectus/consent solicitation statement is a part, shall have become effective under the Securities Act and no stop order suspending the effectiveness of the registration statement, of which this proxy statement/prospectus/consent solicitation statement is a part, shall have been issued and no proceedings for that purpose shall have been initiated or threatened by the SEC and not withdrawn. |
• | (i) the representations and warranties of the Company, First Merger Sub and Second Merger Sub (other than the representations and warranties of the Company, First Merger Sub and Second Merger Sub, with respect to corporate organization, due authorization, the Trust Account, brokers’ fees and capitalization) shall be true and correct (without giving effect to any limitation as to “materiality,” |
“material adverse effect” or any similar limitation) as of the date of the Merger Agreement and as of the closing date of the Business Combination as though then made (except to the extent such representations and warranties expressly relate to an earlier date, and in such case, shall be true and correct on and as of such earlier date), except, where the failure of such representations and warranties to be so true and correct, individually or in the aggregate, has not had, and would not reasonably be expected to result in, a material adverse effect on the Company, First Merger Sub and Second Merger Sub, taken as a whole, or a material adverse effect on the Company’s, First Merger Sub’s and Second Merger Sub’s ability to consummate the Business Combination, including the Mergers, and (ii) the representations and warranties of the Company, First Merger Sub and Second Merger Sub with respect to corporate organization, due authorization, the Trust Account, brokers’ fees and capitalization, shall be true and correct (without giving effect to any limitation as to “materiality,” “material adverse effect” or any similar limitation) in all material respects as of the date of the Merger Agreement and as of the closing date of the Business Combination as though then made (except to the extent such representations and warranties expressly relate to an earlier date, and in such case, shall be true and correct on and as of such earlier date); |
• | each of the covenants of the Company to be performed or complied with as of or prior to the closing of the Business Combination shall have been performed or complied with in all material respects; |
• | the receipt of a certificate signed by the chief executive officer of the Company certifying that the conditions in the two preceding bullets have been satisfied; |
• | the Current Company Certificate shall be amended and restated in the form of the Amended and Restated Certificate of Incorporation; and |
• | the Company shall have Closing Cash equal to or exceeding $500,000,000. “ Closing Cash plus plus minus |
• | (i) certain representations and warranties of Sonder with respect to due incorporation and the representations and warranties of Sonder with respect to due authorization, capitalization, brokers’ fees and affiliate arrangements shall be true and correct (without giving any effect to any limitation as to “materiality” or “Material Adverse Effect” or any similar limitation) in all material respects as of the date of the Merger Agreement and as of the closing date of the Business Combination as though then made (except to the extent such representations and warranties expressly relate to an earlier date, and in such case, shall be true and correct on and as of such earlier date), (ii) the representations and warranties of Sonder with respect to the lack of a Material Adverse Effect shall be true and correct in all respects as of the date of the Merger Agreement and as of the closing date of the Business Combination as though then made, and (iii) all other representations and warranties of Sonder shall be true and correct (without giving any effect to any limitation as to “materiality” or “Material Adverse Effect” or any similar limitation) as of the date of the Merger Agreement and as of the closing date of the Business Combination as though then made (except to the extent such representations and warranties expressly relate to an earlier date, and in such case, shall be true and correct on and as of such earlier date), except, where the failure of such representations and warranties to be so true and correct, individually and in the aggregate, has not had, and would not reasonably be expected to result in, a Material Adverse Effect; |
• | each of the covenants of Sonder to be performed or complied with as of or prior to the closing of the Business Combination shall have been performed or complied with in all material respects; and |
• | the receipt of a certificate signed by an officer of Sonder certifying that the conditions in the two preceding bullets have been satisfied. |
• | corporate organization; |
• | subsidiaries; |
• | due authorization; |
• | no conflict; |
• | government authorities and consents; |
• | capitalization; |
• | financial statements; |
• | undisclosed liabilities; |
• | litigation and proceedings; |
• | compliance with laws; |
• | intellectual property; |
• | data privacy; |
• | contracts; |
• | benefit plans; |
• | labor matters; |
• | taxes; |
• | brokers’ fees; |
• | insurance; |
• | real property and tangible property; |
• | environmental matters; |
• | absence of changes; |
• | significant online travel agencies and suppliers; |
• | affiliate agreements; |
• | internal controls; |
• | permits; and |
• | accuracy of Sonder’s information provided in this proxy statement/prospectus/consent solicitation statement. |
• | corporate organization; |
• | due authorization; |
• | no conflict; |
• | litigation and proceedings; |
• | compliance with laws; |
• | benefit plans; |
• | government authorities and consents; |
• | the Trust Account; |
• | taxes; |
• | brokers’ fees; |
• | SEC reports, |
• | financial statements and the Sarbanes-Oxley Act; |
• | business activities and absence of changes; |
• | accuracy of the Company’s information provided in this proxy statement/prospectus/consent solicitation statement; |
• | capitalization; |
• | Nasdaq stock market listing; |
• | contracts; |
• | compliance with the Investment Company Act of 1940 and the JOBS Act; |
• | affiliate agreements; |
• | the Company’s stockholders; and |
• | the PIPE Investment and Subscription Agreements. |
• | change or amend the certificate of incorporation, bylaws or other organizational documents of Sonder or any of its subsidiaries; |
• | (a) make, declare or pay any dividend or distribution (whether in cash, stock or property) to the stockholders of Sonder in their capacities as stockholders; (b) other than pursuant to the Sonder Certificate of Incorporation (as may be amended in accordance with the Merger Agreement) effect any recapitalization, reclassification, split or other change in its capitalization; (c) except for (i) the issuance of Sonder Stock Options in the ordinary course of business and consistent with past practice, (i) in connection with an exchange of Sonder Canada Exchangeable Common Shares and Sonder Canada Exchangeable Preferred Shares, (iii) in connection with the conversion of Sonder Preferred Stock or Sonder Special Voting Preferred Stock or (iv) in connection with the exercise of any Sonder Warrant or Sonder Stock Option, authorize for issuance, issue, sell, transfer, pledge, encumber, dispose of or deliver any additional shares of its capital stock or securities convertible into or exchangeable for shares of its capital stock, or issue, sell, transfer, pledge, encumber or grant any right, option, restricted stock unit, stock appreciation right or other commitment for the issuance of shares of its capital stock, or split, combine or reclassify any shares of its capital stock; or (d) except in connection with an exchange of Sonder Canada Exchangeable Common Shares and Sonder Canada Exchangeable Preferred Shares or a redemption of Sonder Special Voting Common Stock that is required by the terms of the Sonder Certificate of Incorporation, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any shares of its capital stock or other equity interests, except for: (i) the acquisition by Sonder or any of its subsidiaries of any shares of capital stock, membership interests or other equity interests of Sonder or its subsidiaries in connection with the forfeiture or cancellation of such equity interests; (ii) transactions between Sonder and any of its wholly-owned subsidiaries or between wholly-owned subsidiaries of Sonder; and (iii) purchases or redemptions pursuant to exercises of Sonder Stock Options issued and outstanding as of the date of the Merger Agreement or the withholding of shares to satisfy net settlement or tax obligations with respect to equity awards in accordance with the terms of such equity awards as of the date of the Merger Agreement; |
• | enter into, or amend or modify any material term of, terminate (excluding any expiration in accordance with its terms), renew or fail to exercise any renewal rights, or waive or release any material rights, claims or benefits under, any material contract of Sonder (or any contract, that if existing on the date of the Merger Agreement, would have been deemed to be a material contract of Sonder) to which Sonder or its subsidiaries is a party or by which it is bound, other than entry into, amendments of, modifications of, terminations of, or waivers or releases under, such agreements in the ordinary course of business consistent with past practice; |
• | sell, transfer, lease, license, sublicense, pledge or otherwise encumber or subject to any lien (other than certain permitted liens), abandon, cancel, let lapse or convey or dispose of any material assets, properties or business of Sonder and its subsidiaries, taken as a whole (including certain specified intellectual property or software of Sonder), except for dispositions of obsolete or worthless assets and other than in the ordinary course of business consistent with past practice; |
• | other than in the ordinary course of business consistent with past practice and except as otherwise required pursuant to the employee benefit plans of Sonder in effect on the date of the Merger Agreement or applicable law: (a) increase any compensation or benefits (including severance) of, or grant or provide any change in control, retention, severance, termination payment, sale bonus or similar payments or benefits to any current or former director, employee or individual independent contractor of Sonder or its subsidiaries with an annual base salary, wages or fees in excess of $250,000 (collectively, the “ Key Employees |
ordinary course of business consistent with past practice); (b) adopt, enter into, materially amend or terminate any employee benefit plan of Sonder or agreement, arrangement, policy or plan which would be an employee benefit plan of Sonder if in effect on the date of the Merger Agreement, or any collective bargaining or similar agreement (including agreements with works councils and trade unions and side letters) to which Sonder or its subsidiaries is a party or by which it is bound; (c) hire or terminate (other than for cause in accordance with applicable laws) any Key Employee; (d) accelerate the vesting, payment or funding of any compensation or benefit to any Key Employee under any employee benefit plan of Sonder; (e) grant any equity or equity-based compensation awards to any Key Employee; or (f) grant any bonuses or cash incentive compensation to any Key Employee; |
• | fail to maintain its existence or acquire by merger or consolidation with, or merge or consolidate with, or purchase a material portion of the assets or equity of, any corporation, partnership, limited liability company, association, joint venture or other business organization or division thereof or adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Sonder or its subsidiaries (other than the Business Combination); |
• | make any capital expenditures (or commitment to make any capital expenditures) that in the aggregate exceed $2,500,000, other than any capital expenditure (or series of related capital expenditures) consistent in all material respects with Sonder’s annual capital expenditure budget for periods following the date of the Merger Agreement, made available to the Company; |
• | make any loans, advances or capital contributions to, or investments in, any other person or entity (including to any of its officers, employees, directors, agents or consultants, but excluding any of Sonder’s subsidiaries), make any material change in its existing borrowing or lending arrangements relating to such loans, advances, capital contributions or investments for or on behalf of such persons or entities, or enter into any “keep well” or similar agreement to maintain the financial condition of any other person or entity, other than advances to employees or officers of Sonder or its subsidiaries in the ordinary course of business consistent with past practice; |
• | (a) make, rescind or change any material tax election in a manner inconsistent with past practice; (b) settle or compromise any material tax claim; (c) adopt, change or make a request to change any tax accounting method or period, (d) file any material amendment to a tax return; (e) enter into any closing agreement with a governmental authority with respect to a material amount of taxes, (f) surrender any right to claim a material refund of taxes, (g) settle or compromise any examination, audit or other action with a governmental authority relating to any material taxes or (h) consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of material taxes; |
• | enter into any agreement that restricts the ability of Sonder or its subsidiaries to engage or compete in any line of business, or enter into any agreement that restricts the ability of Sonder or its subsidiaries to enter a new line of business; |
• | acquire any fee interest in real property; |
• | enter into, renew or amend in any material respect any affiliate agreement of Sonder; |
• | waive, release, compromise, settle or satisfy any pending or threatened action or compromise or settle any liability, other than in the ordinary course of business consistent with past practice or that otherwise does not exceed $1,000,000 in the aggregate; |
• | issue or sell any debt securities or rights to acquire any debt securities of Sonder or any of its subsidiaries or guarantee any debt securities of another person or entity, or (b) incur, create, assume, refinance, guarantee or otherwise become liable for (whether directly, contingently or otherwise) any indebtedness in excess of $1,000,000 in the aggregate other than with respect to utilization of commitments under Sonder’s existing credit agreements; |
• | enter into any material new line of business outside of the business currently conducted by Sonder and its subsidiaries as of the date of the Merger Agreement; |
• | make any material change in financial accounting methods, principles or practices, except insofar as may have been required by a change in GAAP (including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization) or applicable law; |
• | implement any employee layoffs, plant closings, or similar events that individually or in the aggregate would give rise to any obligations or liabilities on the part of Sonder or its subsidiaries under the federal Worker Adjustment and Retraining Notification Act and any similar statement, provincial or local “mass layoff” or “plant closing” law (“ WARN |
• | enter into any agreement to do any action prohibited under the foregoing. |
• | change, modify or amend the trust agreement (or any other agreement related to the Trust Account), the Company’s organizational documents or the organizational documents of First Merger Sub or Second Merger Sub, or form or establish any other subsidiary; |
• | (a) make, declare, set aside or pay any dividends on, or make any other distribution (whether in cash, stock or property) in respect of any of its outstanding capital stock or other equity interests, (b) split, combine, reclassify or otherwise change any of its capital stock or other equity interests; (c), other than the redemption of any shares of Class A Stock or as otherwise required by the Company’s organizational documents in order to consummate the Business Combination, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any capital stock of, or other equity interests in, the Company; or (d) effect a recapitalization or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock or warrant, or effect any like change in capitalization; |
• | enter into, renew, amend or waive or release any material rights, claims or benefits under any Company affiliate agreement (or any contract, that if existing on the date of the Merger Agreement, would have constituted a Company affiliate agreement), including those certain letter agreements, dated as of December 15, 2020, entered into between the Company and each of Messrs. Gores, Metropoulos, Bort, Cramer, Gatto and McBride; |
• | enter into, or amend or modify any term of (in a manner adverse to the Company or any of its subsidiaries (including, following the effective time of the First Merger, Sonder and its subsidiaries)), terminate (excluding any expiration in accordance with its terms), or waive or release any material rights, claims or benefits under, any Company material contract (or any contract, that if existing on the date of the Merger Agreement, would have been deemed a Company material contract), any employee benefit plan of the Company (or plan that would be an employee benefit plan of the Company if in effect on the date of the Merger Agreement) or any collective bargaining or similar agreement (including agreements with works councils and trade unions and side letters) to which the Company or its subsidiaries is a party or by which it is bound; |
• | waive, release, compromise, settle or satisfy any pending or threatened claim (which shall include, but not be limited to, any pending or threatened action) or compromise or settle any liability; |
• | incur, guarantee or otherwise become liable for (whether directly, contingently or otherwise) any indebtedness, issue or sell any debt securities or options, warrants, calls or other rights to acquire any |
debt securities of the Company, as applicable, or enter into any arrangement having the economic effect of any of the foregoing; |
• | (a) offer, issue, deliver, grant or sell, or authorize or propose to offer, issue, deliver, grant or sell, any capital stock of, or other equity interests in, the Company or any of its subsidiaries or any securities convertible into, or any rights, warrants or options to acquire, any such capital stock or equity interests, other than (i) in connection with the exercise of any Company Warrants outstanding on the date of the Merger Agreement in accordance with the terms thereof or (ii) the Business Combination or (b) amend, modify or waive any of the terms or rights set forth in, any Company Warrant or the Warrant Agreement, including any amendment, modification or reduction of the warrant price set forth therein; |
• | (a) fail to maintain its existence or acquire by merger or consolidation with, or merge or consolidate with, or purchase a material portion of the assets or equity of, any corporation, partnership, limited liability company, association, joint venture or other business organization or division thereof, or (b) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or its subsidiaries (other than the Business Combination); |
• | other than in the ordinary course of business consistent with past practice, make any loans, advances or capital contributions to, or investments in, any other person or entity (including to any of its officers, directors, agents or consultants), make any change in its existing borrowing or lending arrangements for or on behalf of such persons or entities, or enter into any “keep well” or similar agreement to maintain the financial condition of any other person or entity; |
• | make any change in its financial accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable law, including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, or applicable law; |
• | voluntarily fail to maintain, cancel or materially change coverage under any insurance policy in form and amount equivalent in all material respects to the insurance coverage currently maintained with respect to the Company and its subsidiaries and their assets and properties; |
• | (a) make, rescind or change any material tax election in a manner inconsistent with past practice; (b) settle or compromise any material tax claim; (c) adopt, change or make a request to change any tax accounting method or period; (d) file any material amended tax return; (e) enter into any “closing agreement” as described in Section 7121 of the U.S. Tax Code, as amended (or any similar provision of tax law), with any governmental authority with respect to a material amount of taxes; (f) surrender any right to claim a material refund of taxes; (g) settle or compromise any examination, audit or other action with any governmental authority relating to any material taxes; or (h) consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of material taxes; |
• | create any material liens (other than permitted liens) on any material property or assets of the Company, First Merger Sub or Second Merger Sub; |
• | engage in any material new line of business; or |
• | enter into any agreement to do any action prohibited under the foregoing. |
• | promptly inform the other of any communication to or from the U.S. Federal Trade Commission, the U.S. Department of Justice, or any other governmental authority regarding the Business Combination; |
• | permit each other to review in advance any proposed substantive written communication to any such governmental authority and incorporate reasonable comments thereto; |
• | give the other prompt written notice of the commencement of any action with respect to such transactions; |
• | not agree to participate in any substantive meeting or discussion with any such governmental authority in respect of any filing, investigation or inquiry concerning the Merger Agreement or the Business Combination unless, to the extent reasonably practicable, it consults with the other party in advance and, to the extent permitted by such governmental authority, gives the other party the opportunity to attend; |
• | keep each other reasonably informed as to the status of any such action; and |
• | promptly furnish each other with copies of all correspondence, filings (except for filings made under the HSR Act) and written communications between such party and their affiliates and their respective agents, representatives and advisors, on one hand, and any such governmental authority, on the other hand, in each case, with respect to the Merger Agreement and the Business Combination. Each of the Company and Sonder may, as they deem necessary, designate any sensitive materials to be exchanged in connection with the provision of the Merger Agreement summarized under this heading “— HSR Act and Regulatory Approvals regulatory approvals provision |
approvals provision will be taken by the Company or its affiliates without the prior written consent of Sonder); and (B) use reasonable best efforts to contest, defend and appeal any legal proceedings, whether judicial or administrative, challenging the Merger Agreement or the consummation of the Business Combination. |
• | initiate, solicit or knowingly encourage or knowingly facilitate any inquiries or requests for information with respect to, or the making of, any inquiry regarding, or any proposal or offer that constitutes, or could reasonably be expected to result in or lead to, any proposal or offer from any person, entity or “group” (as defined in the Exchange Act) (other than the Company, First Merger Sub, Second Merger Sub or their respective affiliates or with respect to the Business Combination) relating to, in a single transaction or series of related transactions: (a) any direct or indirect acquisition or purchase of a business that constitutes 15% or more of the consolidated revenues, income or assets of Sonder and its subsidiaries, taken as a whole; (b) any direct or indirect acquisition of 15% or more of the consolidated assets of Sonder and its subsidiaries, taken as a whole (based on the fair market value thereof, as determined in good faith by the Sonder Board), including through the acquisition of one or more subsidiaries of Sonder owning such assets; (c) the acquisition of beneficial ownership, or the right to acquire beneficial ownership, of 15% or more of the total voting power of the equity securities of Sonder, any tender offer or exchange offer that if consummated would result in any person or entity beneficially owning 15% or more of the total voting power of the equity securities of Sonder, or any merger, reorganization, consolidation, share exchange, business combination, recapitalization, liquidation, dissolution or similar transaction involving Sonder (or any subsidiary of Sonder) that constitutes 15% or more of the consolidated revenues, income or assets of Sonder and its subsidiaries, taken as a whole; or (d) any issuance or sale or other disposition (including by way of merger, reorganization, division, consolidation, share exchange, business combination, recapitalization or other similar transaction) of 15% or more of the total voting power of the equity securities of Sonder (a “ Sonder Acquisition Proposal |
• | engage in, continue or otherwise participate in any negotiations or discussions concerning, or provide access to any of its properties, books or records or any confidential information or data to, any person or entity relating to any proposal, offer, inquiry or request for information that constitutes, or could reasonably be expected to result in or lead to, any Sonder Acquisition Proposal; |
• | furnish any non-public information regarding Sonder or any of its subsidiaries or access to any of the properties, assets or employees of Sonder or any of its subsidiaries to any person or entity with respect to, or the making of, any inquiry regarding, or any proposal or offer that constitutes, or could reasonably be expected to result in or lead to, any Sonder Acquisition Proposal or request for information; |
• | approve, endorse or recommend, or propose publicly to approve, endorse or recommend, any Sonder Acquisition Proposal; |
• | execute or enter into, any letter of intent, memorandum of understanding, agreement in principle, merger agreement, acquisition agreement, exchange agreement, joint venture agreement, partnership agreement, option agreement or other similar agreement for or relating to any Sonder Acquisition Proposal; |
• | submit any Sonder Acquisition Proposal to the Sonder Stockholders; or |
• | resolve or agree to do any of the foregoing. |
• | Sonder and the Company providing, subject to certain specified restrictions and conditions, to the other party and its representatives reasonable access to Sonder’s and the Company’s (as applicable) and its subsidiaries’ properties, records, systems, contracts and commitments; |
• | Sonder, its subsidiaries and controlled affiliates agreeing not to engage in transactions involving securities of the Company without the Company’s prior consent; |
• | Sonder using commercially reasonable efforts to comply with all notice and other provisions of the Sonder Warrants and taking actions to cause the Sonder Warrants to be cancelled, extinguished and exercised for shares of Sonder Stock prior to the closing of the First Merger, or assumed by the Company upon the closing of the First Merger; |
• | Sonder waiving claims to the Trust Account in the event that the Business Combination does not consummate; |
• | Sonder delivering its audited and unaudited interim financial statements required to be included in this proxy statement/prospectus/consent solicitation statement; |
• | Sonder delivering to the Company, by the second business day following the effectiveness of the registration statement, which contains this proxy statement/prospectus/consent solicitation statement, a stockholder written consent, duly executed and containing the approval of the Mergers by holders of (i) a majority of the outstanding shares of Sonder Stock, (ii) a majority of the outstanding shares of Sonder Preferred Stock and Sonder Special Voting Preferred Stock, including a majority of the outstanding shares of the Sonder Senior Preferred Stock, voting together as a single class on an as-converted basis, (iii) a majority of the outstanding shares of Sonder Special Voting Stock, (iv) a majority of the outstanding shares of Sonder’s Series C Preferred Stock, Series C-1 Preferred Stock and Special Voting Series C Stock, including a majority of the outstanding shares of Sonder’s Series C-1 Preferred Stock, (v) a majority of the outstanding shares of Sonder’s Series D Preferred Stock, Series D-1 Preferred Stock and Special Voting Series D Stock, including a majority of the outstanding shares of Sonder’s Series D-1 Preferred Stock and (vi) a majority of the outstanding shares of Sonder’s Series E Preferred Stock and Special Voting Series E Stock (such majorities, the “Sonder Requisite Approval |
• | Sonder and the Company cooperating on the preparation and efforts to respond as promptly as practicable to any comments of the SEC or its staff and to have the registration statement, which includes this proxy statement/prospectus/consent solicitation statement, declared effective under the Securities Act as promptly as practicable after filing and to keep such registration statement effective as long as is necessary to consummate the Mergers; |
• | the Company making certain disbursements from the Trust Account; |
• | the Company keeping current and timely filing all reports required to be filed or furnished with the SEC and otherwise complying in all material respects with its reporting obligations under applicable securities laws; |
• | the Company and Sonder taking the actions necessary to cause certain agreements to be terminated; |
• | the Company agreeing to take all actions necessary or appropriate to cause certain appointments to the board of the Company; |
• | the Company taking steps to exempt the acquisition of the Common Stock from Section 16(b) of the Exchange Act pursuant to Rule 16b-3 thereunder; |
• | the Company adopting the Amended and Restated Bylaws in connection with the consummation of the Business Combination; |
• | the Company agreeing to enforce the terms and conditions of the letter agreements with our Sponsor and our directors and officers; |
• | cooperation between Sonder and the Company in obtaining any necessary third-party consents required to consummate the Business Combination; |
• | confidentiality and publicity relating to the Merger Agreement and the transactions contemplated thereby; |
• | Sonder delivering to the Company a valid certification from the Company pursuant to Treasury Regulations Section 1.1445-2(c); and |
• | each of the Company and Sonder delivering to one another executed copies of the Registration Rights Agreement. |
• | by written consent of Sonder and the Company; or |
• | by written notice from either Sonder or the Company to the other party, if the approval of the Company Stockholders of each of the Business Combination Proposal, the Nasdaq Proposal, the Charter Proposal and the Director Election Proposal (the “ Required Company Stockholder Approval |
• | prior to the closing of the Business Combination, by written notice to the Company from Sonder if (i) there is any breach of any representation, warranty, covenant or agreement on the part of the |
Company set forth in the Merger Agreement, such that the conditions described in the first two bullet points under the heading “ —Conditions to Closing of the Business Combination; Conditions to Sonder’s Obligations Terminating Company Breach Company Cure Period Termination Date non-appealable governmental order or a statute, rule or regulation; provided, however, that the right to terminate the Merger Agreement because the closing has not occurred on or before the Termination Date will not be available if Sonder’s failure to fulfill any obligation under the Merger Agreement has been the primary cause of, or primarily resulted in, the failure of the closing to occur on or before the Termination Date; or |
• | by written notice from Sonder to the Company prior to obtaining the Required Company Stockholder Approval if the Board shall (i) have made a Company Change in Recommendation or (ii) have failed to include the Company Board Recommendation in this proxy statement/prospectus/consent solicitation statement. |
• | prior to the closing of the Business Combination, by written notice to Sonder from the Company if (i) there is any breach of any representation, warranty, covenant or agreement on the part of Sonder set forth in the Merger Agreement such that the conditions described in the first two bullet points under the heading “— Conditions to Closing of the Business Combination; Conditions to the Company’s Obligations Terminating Sonder Breach Sonder Cure Period non-appealable governmental order or a statute, rule or regulation; provided, however, that the right to terminate the Merger Agreement because the closing has not occurred on or before the Termination Date will not be available if the Company’s failure to fulfill any obligation under the Merger Agreement has been the primary cause of, or primarily resulted in, the failure of the closing to occur on or before the Termination Date; |
• | by the Company if the Sonder Board (i) shall have made a Sonder Change in Recommendation or (ii) shall have failed to include the Sonder Board Recommendation in this proxy statement/prospectus/consent solicitation statement; provided, however, that such termination rights will expire and the Company will not be entitled to terminate the Merger Agreement pursuant to foregoing if (i) the Sonder Requisite Approval has been obtained and delivered to the Company and (ii) prior to the delivery of the Sonder Requisite Approval, the Company has not delivered to Sonder a notice of termination of the Merger Agreement pursuant to this bullet point; or |
• | by the Company, if the Stockholder Written Consent containing the Sonder Requisite Approval shall not have been duly executed and delivered to Sonder and to the Company within two business days of this proxy statement/prospectus/consent solicitation statement being disseminated by Sonder to the Sonder Stockholders; provided, however, that such termination rights will expire and the Company will not be entitled to terminate the Merger Agreement pursuant to the foregoing if (i) the Sonder Requisite Approval has been obtained and delivered to the Company and (ii) prior to the delivery of the Sonder Requisite Approval, the Company has not delivered to Sonder a notice of termination of the Merger Agreement pursuant to this bullet point. |
(in thousands, except per share amounts) |
For the Six Months ended June 30, 2021 |
As of December 31, 2020 and for the Period from July 21, 2020 (inception) through December 31, 2020 |
||||||
Statement of Operations Data |
||||||||
Total operating expenses |
$ | 743 | $ | (40 | ) | |||
Net income/(loss) attributable to common shares |
$ | 761 | $ | (40 | ) | |||
Basic and diluted net loss per share, Class A Common Stock |
$ | (0.78 | ) | $ | — | |||
Basic and diluted net loss per share. Class F Common Stock |
$ | (0.78 | ) | $ | (0.00 | ) | ||
Cash Flow Data |
||||||||
Net cash used by operating activities |
$ | (2,176 | ) | $ | (33 | ) | ||
Net cash used in investing activities |
$ | (450,018 | ) | $ | — | |||
Net cash provided by financing activities |
$ | 452,087 | $ | 193 | ||||
As of |
||||||||
(in thousands) |
June 30, 2021 |
December 31, 2020 |
||||||
Balance Sheet Data |
||||||||
Total assets |
$ | 451,614 | $ | 446 | ||||
Total liabilities |
$ | 40,557 | $ | 461 | ||||
Total redeemable ordinary shares |
$ | 450,000 | $ | — | ||||
Total stockholders’ deficit |
$ | (38,943 | ) | $ | (15 | ) |
Three Months Ended June 30, |
Six Months Ended June 30, |
Years Ended December 31, |
||||||||||||||||||||||
2021 |
2020 |
2021 |
2020 |
2020 |
2019 |
|||||||||||||||||||
Revenue |
$ | 47,269 | $ | 18,841 | $ | 78,827 | $ | 60,722 | $ | 115,678 | $ | 142,910 | ||||||||||||
Total costs and expenses |
112,203 | 73,106 | 214,810 | 186,216 | 359,500 | 314,013 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net loss |
$ | (73,949 | ) | $ | (60,799 | ) | $ |
(152,490 |
) |
$ |
(122,542 |
) |
$ | (250,316 | ) | $ | (178,249 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net loss per share, basic and diluted |
$ | (9.41 | ) | $ | (9.86 | ) | $ |
(20.18 |
) |
$ |
(20.35 |
) |
$ | (39.98 | ) | $ | (18.04 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Weighted average shares outstanding of common stock, basic and diluted |
7,857,000 | 6,167,073 | |
7,558,055 |
|
|
6,022,003 |
|
6,261,247 | 9,878,239 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
June 30, |
December 31, |
|||||||||||
2021 |
2020 |
2019 |
||||||||||
Cash |
$ | 178,351 | $ | 121,467 | $ | 110,916 | ||||||
Prepaid rent |
10,786 | 9,907 | 13,882 | |||||||||
Total assets |
241,137 | 177,521 | 179,260 | |||||||||
Deferred rent |
35,985 | 28,760 | 25,172 | |||||||||
Long-term debt |
14,839 | 25,022 | 18,274 | |||||||||
Total liabilities |
304,326 | 110,918 | 77,760 | |||||||||
Total stockholders’ deficit |
(631,672 | ) | (500,860 | ) | (258,670 | ) |
• | the accompanying notes to the unaudited pro forma condensed combined financial information; |
• | the historical unaudited financial statements of the Company as of June 30, 2021 and for the six months ended June 30, 2021; |
• | the historical unaudited financial statements of Sonder as of June 30, 2021 and for the six months ended June 30, 2021; |
• | the historical audited financial statements of the Company as of December 31, 2020 and for the period from July 21, 2020 (inception) through December 31, 2020; |
• | the historical audited consolidated financial statements of Sonder as of and for the year ended December 31, 2020; |
• | other information relating to the Company and Sonder included in this proxy statement/prospectus/consent solicitation statement, including the Merger Agreement and the description of certain terms thereof set forth under the section titled “ The Business Combination |
• | the sections titled “ Company Management’s Discussion and Analysis of Financial Condition and Results of Operations” Sonder Management’s Discussion and Analysis of Financial Condition and Results of Operations” |
• | each share of Sonder Common Stock (following the conversion of each issued and outstanding share of Sonder Preferred Stock and Sonder Convertible Notes into shares of Sonder Common Stock prior to the effective time of the First Merger) will be converted into the right to receive a number of shares of Common Stock equal to the Per Share Sonder Common Stock Consideration; |
• | each share of Sonder Special Voting Common Stock will be converted into the right to receive a number of shares of the Post-Combination Company Special Voting Common Stock equal to the Per Share Company Special Voting Stock Consideration; and |
• | each share of Sonder Canada Exchangeable Shares will be exchanged into the right to receive new series of the same class of virtually identical Post-Combination Canada Exchangeable Shares whose terms provide (a) for a deferral of any mandatory exchange caused by the Business Combination for a period of at least 12 months from the Closing Date, and (b) that such Post-Combination Canada Exchangeable Shares shall be exchangeable for Common Stock upon the completion of the First Merger. |
• | each issued and outstanding share of Sonder Preferred Stock shall be canceled and converted into the right to receive an aggregate number of shares of Sonder Common Stock; |
• | each Sonder Warrant will either be (i) exercised in full in exchange for the issuance of shares of Sonder Common Stock to the holder of such Sonder Warrant or (ii) assumed by the Company, to the extent permissible pursuant to the terms of such Sonder Warrant; |
• | pursuant to the Note Purchase Agreement, the Sonder Convertible Notes will convert into Sonder Common Stock; |
• | each issued and outstanding share of Sonder Common Stock (including the Sonder Common Stock resulting from the items mentioned in the above bullet points) will be converted into the right to receive an aggregate number of shares of Common Stock equal to the Per Share Sonder Common Stock Consideration; |
• | each issued and outstanding share of Sonder Special Voting Common Stock will be converted into the right to receive an aggregate number of shares of Post-Combination Company Special Voting Common Stock equal to the Per Share Sonder Special Voting Stock Consideration; |
• | each issued and outstanding Sonder Canada Exchangeable Shares will be exchanged into a new series of the same class of virtually identical Post-Combination Canada Exchangeable Shares whose terms shall provide (a) for a deferral of any mandatory exchange caused by the Business Combination for a period of at least 12 months from the Closing Date, and (b) that such Post-Combination Canada Exchangeable Shares shall be exchangeable for Post-Combination Company Common Stock upon the completion of the First Merger; |
• | each outstanding vested and unvested Sonder Stock Option will be converted into a Rollover Option, exercisable for shares of Common Stock with the same terms except for the number of shares exercisable and the exercise price, each of which will be adjusted using the Option Exchange Ratio that will be determined at the closing of the Business Combination. For purposes of the pro forma financial information, the Option Exchange Ratio is estimated to be equal to the estimated Per Share Sonder Common Stock Consideration; and |
• | under the Merger Agreement, Sonder Stockholders, excluding holders of Sonder Stock Options, will also be entitled to receive a number of Earn Out Shares comprising up to 14,500,000 shares of Common Stock in the aggregate. There are six distinct tranches of Earn Out Shares, each of which will be issued if the daily volume weighted average price (based on such trading day) of one share of Common Stock exceeds a certain threshold specified for such tranche in the Merger Agreement for a period of at least 10 days out of 20 consecutive trading days during the period beginning on the 180th day following the closing of the Business Combination and ending on the fifth anniversary of such date (the “ Earn Out Period |
• | The issuance and sale of 20,000,000 shares of Class A Stock (which will be reclassified into Common Stock upon the effectiveness of the Amended and Restated Certificate of Incorporation) for a purchase price of $10.00 per share for an aggregate purchase price of $200 million pursuant to the PIPE Investment. |
• | Pursuant to the terms of that certain letter agreement between the Sponsor and the Company, the Private Placement Warrants held by our Sponsor will become exercisable on the later of 30 days after the consummation of the Business Combination or 12 months from the closing of the Company IPO, and will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation, as described in this proxy statement/prospectus/consent solicitation statement. |
• | Sonder will receive approximately 1.5 million shares of Sonder Common Stock from Sonder’s CEO in settlement of a promissory note issued in December 2019 by Sonder’s CEO for early exercise of stock options. The actual number of shares transferred will be determined at the closing of the Business Combination based on the values upon the closing of the Business Combination. |
(in thousands, except for per share and number of share amounts) |
||||
Shares transferred at Closing (1) |
217,660,300 | |||
Value per Share (2) |
$ | 10.00 | ||
|
|
|||
Total Aggregate Sonder Common Stock Consideration |
$ | 2,176,603 | ||
|
|
(1) | The number of outstanding shares in the table above includes the Post-Combination Company Special Voting Common Stock to be issued in the Business Combination (each of which corresponds to a share of Common Stock reserved for issuance upon the exchange of Sonder Canada Exchangeable Common Shares after the consummation of the Business Combination pursuant to the terms of the Merger Agreement) and assumes the issuance of approximately 19.5 million shares of Common Stock related to the exercise of Rollover Options that do not represent legally outstanding shares of Common Stock at the closing of the Business Combination. For purposes of the pro forma financial information, the 19.5 million shares are estimated from the number of outstanding Sonder options calculated on a net exercise basis and adjusted based on the Per Share Sonder Common Stock Consideration, which is estimated to be 1.69. The actual number of shares of Common Stock issued upon exercise of the Rollover Options will be determined at closing based on the Option Exchange Ratio. |
(2) | Aggregate Sonder Common Stock Consideration is calculated using a $10.00 reference price. Actual total Share Consideration will be dependent on the value of Common Stock at the closing of the Business Combination. |
• | Assuming No Redemptions: This scenario assumes that no Public Stockholders of the Company exercise redemption rights with respect to their Public Shares for a pro rata share of the funds in the Trust Account. |
• | Assuming Maximum Redemptions: This scenario assumes that Public Stockholders holding 15.0 million Public Shares will exercise their redemption rights for their pro rata share (approximately $10.00 per share) of the funds in the Trust Account. The Merger Agreement provides that the consummation of the Business Combination is conditioned on the Company having funds at the closing of the Business Combination of at least $500.0 million. |
Pro Forma Combined Assuming No Redemptions (Shares) |
% |
Pro Forma Combined Assuming Maximum Redemptions (Shares) |
% |
|||||||||||||
Class A Stock issued to Sonder Stockholders (1) (2) |
217,660,300 | 74.1 | 217,660,300 | 78.0 | ||||||||||||
Public Stockholders |
45,000,000 | 15.3 | 29,998,784 | 10.8 | ||||||||||||
Initial Stockholders’ Class F Stock (3) |
11,250,000 | 3.8 | 11,250,000 | 4.0 | ||||||||||||
PIPE Investors (4) |
20,000,000 | 6.8 | 20,000,000 | 7.2 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Pro Forma Common Stock at June 30, 2021 (5) |
293,910,300 |
100.0 |
278,909,084 |
100.0 |
||||||||||||
|
|
|
|
|||||||||||||
Rollover Options (2) |
(19,486,212 | ) | (19,486,212 | ) | ||||||||||||
|
|
|
|
|||||||||||||
Pro Forma Common Stock Outstanding at June 30, 2021 |
274,424,088 |
259,422,872 |
||||||||||||||
|
|
|
|
(1) | There are no adjustments for 14.5 million shares of Common Stock in Earn Out Shares as they are not issuable until up to 10 business days after a triggering event has occurred following the closing of the Business Combination but within the Earn Out Period and are contingently issuable based upon the triggering events that have not yet been achieved. |
(2) | The number of outstanding shares in the table above includes the Post-Combination Company Special Voting Common Stock to be issued in the Business Combination (each of which corresponds to a share of Common Stock reserved for issuance upon the exchange of Sonder Canada Exchangeable Common Shares after the consummation of the Business Combination pursuant to the terms of the Merger Agreement) and assumes the issuance of approximately 19.5 million shares of Common Stock related to the exercise of Rollover Options that do not represent legally outstanding shares of Common Stock at the closing of the Business Combination. For purposes of the pro forma financial information, the 19.5 million shares are estimated from the number of outstanding Sonder options calculated on a net exercise basis and adjusted based on the Per Share Sonder Common Stock Consideration, which is estimated to be 1.69. The actual number of Common Stock issued upon exercise of the Rollover Options will be determined at closing based on the Option Exchange Ratio. |
(3) | Excludes 4,000,000 shares of Common Stock (which will be reclassified into Common Stock upon the effectiveness of the Amended and Restated Certificate of Incorporation) to be purchased under the Sponsor Subscription Agreement. |
(4) | Includes 4,000,000 shares of Class A Stock (which will be reclassified into Common Stock upon the effectiveness of the Amended and Restated Certificate of Incorporation) to be purchased under the Sponsor Subscription Agreement. |
(5) | There are no adjustments for the outstanding Warrants issued in connection with the Company IPO as such securities are not exercisable until 30 days after the closing of the Business Combination. |
Assuming No Redemptions |
Assuming Maximum Redemptions |
|||||||||||||||||||||||||||
As of June 30, 2021 |
As of June 30, 2021 |
As of June 30, 2021 |
||||||||||||||||||||||||||
Sonder Holdings Inc. (Historical) |
Gores Metropoulos II, Inc. (Historical) |
Pro Forma Transaction Accounting Adjustments |
Pro Forma Combined |
Additional Pro Forma Transaction Accounting Adjustments |
Pro Forma Combined |
|||||||||||||||||||||||
Assets |
||||||||||||||||||||||||||||
Current assets |
||||||||||||||||||||||||||||
Cash |
$ | 178,351 | $ | 53 | $ | (40,000 | ) | (B) | $ | 775,882 | $ | (150,018 | ) | (M) | $ | 625,864 | ||||||||||||
(12,440 | ) | (C) | ||||||||||||||||||||||||||
(100 | ) | (D) | ||||||||||||||||||||||||||
200,000 | (E) | |||||||||||||||||||||||||||
450,018 | (Q) | |||||||||||||||||||||||||||
Restricted cash |
75 | — | — | 75 | — | 75 | ||||||||||||||||||||||
Accounts receivable, net |
1,815 | — | — | 1,815 | — | 1,815 | ||||||||||||||||||||||
Prepaid rent |
10,786 | — | — | 10,786 | — | 10,786 | ||||||||||||||||||||||
Prepaid expenses |
4,063 | 1,543 | — | 5,606 | — | 5,606 | ||||||||||||||||||||||
Other current assets |
9,399 | — | — | 9,399 | — | 9,399 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total current assets |
204,489 |
1,596 |
597,478 |
803,563 |
(150,018 |
) |
653,545 |
|||||||||||||||||||||
Investments and cash held in Trust Account |
— | 450,018 | (450,018 | ) | (Q) | — | — | — | ||||||||||||||||||||
Property and equipment, net |
22,469 | — | — | 22,469 | — | 22,469 | ||||||||||||||||||||||
Other non-current assets |
14,179 | — | (4,181 | ) | (C) | 9,998 | — | 9,998 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total assets |
$ |
241,137 |
$ |
451,614 |
$ |
143,279 |
$ |
836,030 |
$ |
(150,018 |
) |
$ |
686,012 |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Liabilities, mezzanine equity and stockholders’ equity (deficit) |
||||||||||||||||||||||||||||
Current liabilities |
||||||||||||||||||||||||||||
Accounts payable |
$ | 10,131 | $ | — | $ | — | $ | 10,131 | $ | — | $ | 10,131 | ||||||||||||||||
Accrued liabilities |
15,281 | — | — | 15,281 | — | 15,281 | ||||||||||||||||||||||
Sales tax payable |
8,873 | — | — | 8,873 | — | 8,873 | ||||||||||||||||||||||
State franchise tax accrual |
— | 100 | (100 | ) | (D) | — | — | — | ||||||||||||||||||||
Accrued expenses, formation and offering costs |
— | 3,407 | (3,297 | ) | (B) | 110 | — | 110 | ||||||||||||||||||||
Deferred revenue |
22,005 | — | — | 22,005 | — | 22,005 | ||||||||||||||||||||||
Current portion of long-term debt |
20,847 | — | — | 20,847 | — | 20,847 | ||||||||||||||||||||||
Convertible notes |
170,964 | — | (170,964 | ) | (P) | — | — | — | ||||||||||||||||||||
Notes and advances payable—related party |
— | 1,000 | (1,000 | ) | (B) | — | — | — | ||||||||||||||||||||
Other current liabilities |
869 | — | — | 869 | — | 869 | ||||||||||||||||||||||
Public warrants derivative liability |
— | 12,600 | — | 12,600 | — | 12,600 | ||||||||||||||||||||||
Private warrants derivative liability |
— | 7,700 | — | 7,700 | — | 7,700 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total current liabilities |
248,970 |
24,807 |
(175,361 |
) |
98,416 |
— |
98,416 |
|||||||||||||||||||||
Deferred rent |
35,985 | — | — | 35,985 | — | 35,985 | ||||||||||||||||||||||
Long-term debt |
14,839 | — | — | 14,839 | — | 14,839 | ||||||||||||||||||||||
Deferred underwriting compensation |
— | 15,750 | (15,750 | ) | (B) | — | — | — | ||||||||||||||||||||
Other non-current liabilities |
4,532 | — | 93,308 | (L) | 95,415 | — | 95,415 | |||||||||||||||||||||
(2,425 | ) | (N) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total liabilities |
$ |
304,326 |
$ |
40,557 |
$ |
(100,228 |
) |
$ |
244,655 |
$ |
— |
$ |
244,655 |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Assuming No Redemptions |
Assuming Maximum Redemptions |
|||||||||||||||||||||||||||||
As of June 30, 2021 |
As of June 30, 2021 |
As of June 30, 2021 |
||||||||||||||||||||||||||||
Sonder Holdings Inc. (Historical) |
Gores Metropoulos II, Inc. (Historical) |
Pro Forma Transaction Accounting Adjustments |
Pro Forma Combined |
Additional Pro Forma Transaction Accounting Adjustments |
Pro Forma Combined |
|||||||||||||||||||||||||
Commitments and contingencies (Note 8) |
||||||||||||||||||||||||||||||
Class A subject to possible redemption, 45,000,000 shares at June 30, 2021 (at redemption value of $10 per share) |
— | 450,000 | (450,000 | ) | (F) | — | — | — | ||||||||||||||||||||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized, none issued or outstanding |
— | — | — | — | — | — | ||||||||||||||||||||||||
Redeemable convertible preferred stock |
518,750 | — | 760,891 | (A) | — | — | — | |||||||||||||||||||||||
(1,279,641 | ) | (G) | ||||||||||||||||||||||||||||
Exchangeable preferred stock |
49,733 | — | 162,755 | (A) | — | — | — | |||||||||||||||||||||||
(212,488 | ) | (G) | ||||||||||||||||||||||||||||
Stockholders’ equity (deficit) |
||||||||||||||||||||||||||||||
Common Stock |
1 | — | — | (G) | — | — | — | |||||||||||||||||||||||
(1 | ) | (I) | ||||||||||||||||||||||||||||
— | (N) | |||||||||||||||||||||||||||||
— | (O) | |||||||||||||||||||||||||||||
— | (P) | |||||||||||||||||||||||||||||
Exchangeable AA stock |
— | — | — | — | — | — | ||||||||||||||||||||||||
Class A common stock, $0.0001 par value; 400,000,000 shares authorized |
— | — | 2 | (E) | 28 | (15 | ) | (M) | 13 | |||||||||||||||||||||
5 | (F) | |||||||||||||||||||||||||||||
1 | (H) | |||||||||||||||||||||||||||||
20 | (I) | |||||||||||||||||||||||||||||
Class F common stock, $0.0001 par value; 40,000,000 shares authorized, 11,250,000 issued and outstanding at June 30, 2021 |
— | 1 | (1 | ) | (H) | — | — | — | ||||||||||||||||||||||
Additional paid-in capital |
32,742 | — | (229,572 | ) | (A) | 1,950,270 | (150,003 | ) | (M) | 1,800,267 | ||||||||||||||||||||
(4,830 | ) | (B) | ||||||||||||||||||||||||||||
(16,621 | ) | (C) | ||||||||||||||||||||||||||||
199,998 | (E) | |||||||||||||||||||||||||||||
449,995 | (F) | |||||||||||||||||||||||||||||
1,492,129 | (G) | |||||||||||||||||||||||||||||
(19 | ) | (I) | ||||||||||||||||||||||||||||
434 | (J) | |||||||||||||||||||||||||||||
(54,067 | ) | (K) | ||||||||||||||||||||||||||||
(93,308 | ) | (L) | ||||||||||||||||||||||||||||
2,425 | (N) | |||||||||||||||||||||||||||||
0 | (O) | |||||||||||||||||||||||||||||
170,964 | (P) | |||||||||||||||||||||||||||||
Cumulative translation adjustment |
8,500 | — | — | 8,500 | — | 8,500 | ||||||||||||||||||||||||
Accumulated deficit |
(672,915 | ) | (38,944 | ) | (694,074 | ) | (A) | (1,367,423 | ) | — | (1,367,423 | ) | ||||||||||||||||||
(15,123 | ) | (B) | ||||||||||||||||||||||||||||
(434 | ) | (J) | ||||||||||||||||||||||||||||
54,067 | (K) | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total stockholders’ equity (deficit) |
(631,672 |
) |
(38,943 |
) |
1,261,990 |
591,375 |
(150,018 |
) |
441,357 |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total liabilities, mezzanine equity and stockholders’ equity (deficit) |
$ |
241,137 |
$ |
451,614 |
$ |
143,279 |
$ |
836,030 |
$ |
(150,018 |
) |
$ |
686,012 |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Assuming No Redemptions and Maximum Redemptions |
||||||||||||||||||||||
For the Six Months Ended June 30, 2021 |
For the Six Months Ended June 30, 2021 |
|||||||||||||||||||||
Sonder Holdings Inc. (Historical) |
Gores Metropoulos II, Inc. (Historical, as Adjusted) |
Pro Forma Transaction Accounting Adjustments |
Pro Forma Combined |
|||||||||||||||||||
Revenue |
$ | 78,827 | $ | — | $ | — | $ | 78,827 | ||||||||||||||
Cost of revenue (excluding depreciation and amortization) |
82,950 | — | — | 82,950 | ||||||||||||||||||
Operations and support |
60,312 | — | — | 60,312 | ||||||||||||||||||
General and administrative |
56,764 | — | 599 | (BB) | 57,363 | |||||||||||||||||
Research and development |
7,385 | — | — | 7,385 | ||||||||||||||||||
Sales and marketing |
7,399 | — | — | 7,399 | ||||||||||||||||||
Professional fees and other expenses |
— | 4,184 | (AA) | 4,184 | ||||||||||||||||||
State franchise taxes, other than income tax |
— | 100 | (AA) | — | 100 | |||||||||||||||||
Gain from change in fair value of warrant liability |
— | (5,945 | ) | (AA) | — | (5,945 | ) | |||||||||||||||
Allocated expense for warrant issuance cost |
— | 918 | (AA) | — | 918 | |||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
Total costs and expenses |
214,810 | (743 | ) | 599 | 214,666 | |||||||||||||||||
(Loss) income from operations |
(135,983 | ) | 743 | (599 | ) | (135,839 | ) | |||||||||||||||
Interest expense, net and other expense, net |
16,414 | — | (1,286 | ) | (CC) | 6,072 | ||||||||||||||||
4,100 | (DD | ) | ||||||||||||||||||||
(13,156 | ) | (EE | ) | |||||||||||||||||||
Other income—interest and dividend income |
— | (18 | ) | (AA) | 18 | (FF | ) | — | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
(Loss) income before income taxes |
(152,397 | ) | 761 | 9,725 | (141,911 | ) | ||||||||||||||||
Provision for income taxes |
93 | — | — | (GG | ) | 93 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
Net (loss) income |
(152,490 | ) | 761 | 9,725 | (142,004 | ) | ||||||||||||||||
Other comprehensive income—Change in foreign currency translation adjustment |
2,834 | — | — | 2,834 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
Comprehensive (loss) income |
$ | (149,656 | ) | $ | 761 | $ | 9,725 | $ | (139,170 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
Earnings (Losses) Per Share: |
Assuming No Redemptions |
Assuming Maximum Redemptions |
||||||||||||||||||||
Weighted average shares outstanding of common stock—basic and diluted |
7,558,055 | |||||||||||||||||||||
Common Stock—basic and diluted |
$ | (20.18 | ) | |||||||||||||||||||
Weighted average shares outstanding—Class A Stock |
39,779,006 | 274,424,088 | 259,422,872 | |||||||||||||||||||
Class A Stock—basic and diluted [See Note 3] |
$ | (0.78 | ) | $ | (0.52 | ) | $ | (0.55 | ) | |||||||||||||
Weighted average shares outstanding—Class F Stock |
11,339,779 | |||||||||||||||||||||
Class F Stock—basic and diluted |
$ | (0.78 | ) |
Assuming No Redemptions and Maximum Redemptions |
||||||||||||||||||||
For the Year Ended December 31, 2020 |
For the Year Ended December 31, 2020 |
|||||||||||||||||||
Sonder Holdings Inc. (Historical) |
Gores Metropoulos II, Inc. (Historical) |
Pro Forma Transaction Accounting Adjustments |
Pro Forma Combined |
|||||||||||||||||
Revenue |
$ | 115,678 | $ | — | $ | — | $ | 115,678 | ||||||||||||
Cost of revenue (excluding depreciation and amortization) |
136,995 | — | — | 136,995 | ||||||||||||||||
Operations and support |
115,072 | — | — | 115,072 | ||||||||||||||||
General and administrative |
77,033 | — | 1,622 | (BB) | 78,655 | |||||||||||||||
Research and development |
17,552 | — | — | 17,552 | ||||||||||||||||
Sales and marketing |
12,848 | — | — | 12,848 | ||||||||||||||||
Organizational expenses |
— | 4 | (AA) | — | 4 | |||||||||||||||
Professional fees |
— | 33 | (AA) | — | 33 | |||||||||||||||
Sales franchise tax |
— | 3 | (AA) | — | 3 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total costs and expenses |
359,500 | 40 | 1,622 | 361,162 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Loss from operations |
(243,822 | ) | (40 | ) | (1,622 | ) | (245,484 | ) | ||||||||||||
Interest expense, net and other expense, net |
6,171 | — | (317 | ) | (CC) | 5,854 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Loss before income taxes |
(249,993 | ) | (40 | ) | (1,305 | ) | (251,338 | ) | ||||||||||||
Provision for income taxes |
323 | — | — | (GG) | 323 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net loss |
(250,316 | ) | (40 | ) | (1,305 | ) | (251,661 | ) | ||||||||||||
Other comprehensive loss—Change in foreign currency translation adjustment |
(740 | ) | — | — | (740 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Comprehensive loss |
$ | (251,056 | ) | $ | (40 | ) | $ | (1,305 | ) | $ | (252,401 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Earnings (Losses) Per Share: |
Assuming No Redemptions |
Assuming Maximum Redemptions |
||||||||||||||||||
Weighted average shares outstanding of common stock—basic and diluted |
6,261,247 | |||||||||||||||||||
Common Stock—basic and diluted |
$ | (39.98 | ) | |||||||||||||||||
Weighted average shares outstanding—Class A Stock |
— | 274,424,088 | 259,422,872 | |||||||||||||||||
Class A Stock—basic and diluted [See Note 3] |
$ | — | $ | (0.92 | ) | $ | (0.97 | ) | ||||||||||||
Weighted average shares outstanding—Class F Stock |
11,500,000 | |||||||||||||||||||
Class F Stock—basic and diluted |
$ | (0.00 | ) |
1. |
Basis of Presentation |
• | the Company’s unaudited balance sheet as of June 30, 2021 and the related notes for the six months ended June 30, 2021 included elsewhere in this proxy statement/prospectus/consent solicitation statement; and |
• | Sonder’s unaudited condensed consolidated balance sheet as of June 30, 2021 and the related notes for the six months ended June 30, 2021 included elsewhere in this proxy statement/prospectus/consent solicitation statement. |
• | the Company’s unaudited statement of operations for the six months ended June 30, 2021 and the related notes included elsewhere in this proxy statement/prospectus/consent solicitation statement; and |
• | Sonder’s unaudited condensed consolidated statements of operations for the six months ended June 30, 2021 and the related notes included elsewhere in this proxy statement/prospectus/consent solicitation statement. |
• | the Company’s audited statement of operations for the period from July 21, 2020 (inception) through December 31, 2020 and the related notes included elsewhere in this proxy statement/prospectus/consent solicitation statement; and |
• | Sonder’s audited consolidated statements of operations for the year ended December 31, 2020 and the related notes included elsewhere in this proxy statement/prospectus/consent solicitation statement. |
2. |
Adjustments to Unaudited Pro Forma Condensed Combined Financial Information |
(A) | Reflects the accretion of Sonder Convertible Preferred Stock and Sonder Exchangeable Preferred Stock to a redemption value of $1,279.6 million and $212.5 million, respectively, based on the terms of the Business Combination. |
(B) | Reflects the Company’s estimated $40 million payment of fees, expenses, and related party notes and advances due upon the closing of the Business Combination. This payment includes the payment of $15.8 million of deferred underwriters’ fees, the paydown of $3.3 million in accrued expenses, formation and offering costs incurred during the Company IPO due upon the closing of the Business Combination, and the paydown of $1.0 million in related party notes and advances expected to be completed in connection with the Business Combination and other related events, and the Company’s total preliminary estimated advisory, legal, and accounting fees and other professional fees, including $4.8 million in expected transaction costs in connection with the PIPE Investment, which has been recorded as a reduction to additional paid-in capital. The remaining $15.1 million transaction costs have been reflected as an adjustment to accumulated deficit. |
(C) | Reflects Sonder’s total preliminary estimated advisory, legal, and accounting fees and other professional fees of $16.6 million. These expected transaction costs are in connection with the consummation of the Business Combination and other related events, and are deemed to be direct and incremental costs of the Business Combination, which have been recorded as a reduction to additional paid-in capital. |
(D) | Reflects the settlement of the Company’s historical liabilities that will be settled upon the closing of the Business Combination. |
(E) | Reflects the proceeds of $200 million from the issuance and sale of 20 million shares of Common Stock at $10.00 per share pursuant to the PIPE Investment. |
(F) | Reflects the reclassification of Class A Stock subject to possible redemption to permanent equity immediately prior to the closing of the Business Combination. |
(G) | Reflects the conversion of Sonder Preferred Stock into Sonder Common Stock pursuant to the applicable conversion rate effective immediately prior to the closing of the Business Combination. |
(H) | Reflects the classification of Class F Stock into Common Stock in connection with the closing of the Business Combination. |
(I) | Reflects the recapitalization of common stock between Sonder Common Stock, Class A Stock and additional paid-in capital. |
(J) | Reflects additional stock-based compensation expense recognized due at the closing of the Business Combination under the terms of the stock awards issued to Sonder’s CEO. |
(K) | Reflects the elimination of the Company’s historical retained earnings. |
(L) | Reflects the preliminary estimated fair value of the Earn Out Shares recorded as earn out liabilities. For further information, please refer to Note 4. |
(M) | Reflects the maximum redemptions scenario in which 15 million shares of Class A Stock are redeemed for $150.0 million allocated to Common Stock and additional paid-in capital, using a par value of $0.0001 per share at a redemption price of $10.00 per share. |
(N) | Represents the reclassification of Sonder warrants from liability to equity classification as a result of the Business Combination. |
(O) | Reflects the settlement of a $25.4 million promissory note due from Sonder’s CEO that will be settled upon the closing of the Business Combination through the transfer of approximately 1.5 million shares of Sonder Common Stock. The actual number of shares transferred will be determined at the closing of the Business Combination based on the values at closing. |
(P) | Reflects the conversion of Sonder Convertible Notes to Sonder Common Stock. |
(Q) | Reflects the liquidation and reclassification of $450 million of investments and cash held in the Trust Account to cash that become available upon the closing of the Business Combination, assuming no redemptions. |
(AA) | Reflects the adjustment of the presentation of the Company’s expenses to match the presentation of Sonder’s expenses. |
(BB) | Reflects the additional amount of stock-based compensation expense to be recognized for the six months ended June 30, 2021 and twelve months ended December 31, 2020 due to the vesting of stock awards to Sonder’s CEO that will be recognized starting at the closing of the Business Combination. |
(CC) | Reflects the elimination of the impact of change in fair value of Sonder warrant liabilities as the warrants are expected to become equity-classified as a result of the recapitalization, and therefore will not be marked to market at each reporting period. |
(DD) | Reflects the elimination of the mark-to-market |
(EE) | Reflects the elimination of the interest expense on the Sonder convertible debt. |
(FF) | Reflects the elimination of interest income on the Trust Account. |
(GG) | Given Sonder’s history of net losses and valuation allowance, Sonder assumed an effective tax rate of 0%. Therefore, the pro forma adjustments to the statement of operations resulted in no additional income tax adjustment to the pro forma financials. The pro forma condensed combined provision for income taxes does not necessarily reflect the amounts that would have resulted had the Company and Sonder filed consolidated income tax returns during the period presented. |
3. |
Loss per share |
For the Six Months Ended June 30, 2021 |
For the Year Ended December 31, 2020 |
|||||||||||||||
(in thousands, except share and per share data) |
Assuming No Redemptions |
Assuming Maximum Redemptions |
Assuming No Redemptions |
Assuming Maximum Redemptions |
||||||||||||
Pro forma net loss |
$ | (142,004 | ) | $ | (142,004 | ) | $ | (251,661 | ) | $ | (251,661 | ) | ||||
Weighted average shares outstanding of Class A Stock |
274,424,088 | 259,422,872 | 274,424,088 | 259,422,872 | ||||||||||||
Net loss per share of Class A Stock—basic and diluted |
$ | (0.52 | ) | $ | (0.55 | ) | $ | (0.92 | ) | $ | (0.97 | ) | ||||
Weighted average shares outstanding—basic and diluted |
||||||||||||||||
Class A Stock issued to Sonder Stockholders |
198,174,088 | 198,174,088 | 198,174,088 | 198,174,088 | ||||||||||||
Public Stockholders |
45,000,000 | 29,998,784 | 45,000,000 | 29,998,784 | ||||||||||||
Initial Stockholders’ Class F Stock |
11,250,000 | 11,250,000 | 11,250,000 | 11,250,000 | ||||||||||||
PIPE Investors |
20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
274,424,088 | 259,422,872 | 274,424,088 | 259,422,872 | ||||||||||||
|
|
|
|
|
|
|
|
Rollover Options |
19,486,212 | 19,486,212 | 19,486,212 | 19,486,212 | ||||||||||||
Earn Out Shares |
14,500,000 | 14,500,000 | 14,500,000 | 14,500,000 | ||||||||||||
Company’s private placement and public warrants |
14,500,000 | 14,500,000 | 14,500,000 | 14,500,000 |
4. |
Earn Out Shares |
• | Assuming Minimum Redemptions: This scenario assumes that no Public Stockholders of the Company exercise redemption rights with respect to their Public Shares for a pro rata share of the funds in the Trust Account. |
• | Assuming Maximum Redemptions: This scenario assumes that Public Stockholders holding 15.0 million Public Shares will exercise their redemption rights for their pro rata share (approximately $10.00 per share) of the funds in the Trust Account. The Merger Agreement provides that the consummation of the Business Combination is conditioned on the Company having funds at the closing of the Business Combination of at least $500.0 million. |
Pro Forma Combined Assuming No Redemptions (Shares) |
% |
Pro Forma Combined Assuming Maximum Redemptions (Shares) |
% |
|||||||||||||
Class A Stock issued to Sonder Stockholders (1) (2) |
217,660,300 | 74.1 | % | 217,660,300 | 78.0 | % | ||||||||||
Public Stockholders |
45,000,000 | 15.3 | % | 29,998,784 | 10.8 | % | ||||||||||
Initial Stockholders’ Class F Stock (3) |
11,250,000 | 3.8 | % | 11,250,000 | 4.0 | % | ||||||||||
PIPE Investors (4) |
20,000,000 | 6.8 | % | 20,000,000 | 7.2 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Pro Forma Common Stock at June 30, 2021 (5) |
293,910,300 |
100.0 |
% |
278,909,084 |
100.0 |
% | ||||||||||
|
|
|
|
|||||||||||||
Rollover Options (2) |
(19,486,212 | ) | (19,486,212 | ) | ||||||||||||
|
|
|
|
|||||||||||||
Pro Forma Common Stock Outstanding at June 30, 2021 |
274,424,088 |
259,422,872 |
||||||||||||||
|
|
|
|
(1) | There are no adjustments for 14.5 million shares of Common Stock in Earn Out Shares as they are not issuable until up to 10 business days after a triggering event has occurred following the closing date of the Business Combination but within the Earn Out Period and are contingently issuable based upon the triggering events that have not yet been achieved. |
(2) | The number of outstanding shares in the table above includes the Post-Combination Company Special Voting Common Stock to be issued in the Business Combination (each of which corresponds to a share of Common Stock reserved for issuance upon the exchange of Sonder Canada Exchangeable Common Shares after the consummation of the Business Combination pursuant to the terms of the Merger Agreement) and assumes the issuance of approximately 19.5 million shares of Common Stock related to exercise of Rollover Options that do not represent legally outstanding shares of Common Stock at the closing the Business Combination. For purposes of the pro forma financial information, the 19.5 million shares are estimated from the number of outstanding Sonder options calculated on a net exercise basis and adjusted based on the Per Share Sonder Common Stock Consideration, which is estimated to be 1.69. The actual number of Common Stock issued upon exercise of the Rollover Options will be determined at closing based on the Option Exchange Ratio. |
(3) | Excludes 4,000,000 shares of Class A Stock (which will be reclassified into Common Stock upon the effectiveness of the Amended and Restated Certificate of Incorporation) to be purchased under the Sponsor Subscription Agreement. |
(4) | Includes 4,000,000 shares of Class A Stock (which will be reclassified into Common Stock upon the effectiveness of the Amended and Restated Certificate of Incorporation) to be purchased under the Sponsor Subscription Agreement. |
(5) | There are no adjustments for the outstanding Warrants issued in connection with the Company IPO as such securities are not exercisable until 30 days after the closing of the Business Combination. |
Selected Unaudited Pro Forma Condensed Combined Statement of Operations Data (in thousands, except per share and number of share amounts) |
Pro Forma Combined (Assuming No Redemptions) |
Pro Forma Combined (Assuming Maximum Redemptions) |
||||||
For the Six Months Ended June 30, 2021 |
||||||||
Revenue |
$ | 78,827 | $ | 78,827 | ||||
Net loss |
$ | (142,004 | ) | $ | (142,004 | ) | ||
Net loss per share of Class A Stock—basic and diluted |
$ | (0.52 | ) | $ | (0.55 | ) | ||
Weighted-average shares outstanding of Class A Stock—basic and diluted |
274,424,088 | 259,422,872 | ||||||
For the year Ended December 31, 2020 |
||||||||
Revenue |
$ | 115,678 | $ | 115,678 | ||||
Net loss |
$ | (251,661 | ) | $ | (251,661 | ) | ||
Net loss per share of Class A Stock—basic and diluted |
$ | (0.92 | ) | $ | (0.97 | ) | ||
Weighted-average shares outstanding of Class A Stock—basic and diluted |
274,424,088 | 259,422,872 | ||||||
Selected Unaudited Pro Forma Condensed Combined |
||||||||
Balance Sheet Data as of June 30, 2021 |
||||||||
Total assets |
$ | 836,030 | $ | 686,012 | ||||
Total liabilities |
$ | 244,655 | $ | 244,655 | ||||
Total stockholders’ equity |
$ | 591,375 | $ | 441,357 |
Trading Date |
Public Units (GMIIU) |
Public Shares (GMII) |
Public Warrants (GMIIW) |
|||||||||
April 29, 2021 |
$ | 10.25 | $ | 9.94 | $ | 1.43 | ||||||
[●], 2021 |
$ | [●] | $ | [●] | $ | [●] |
• | Assuming Minimum Redemptions: This scenario assumes that no Public Stockholders of the Company exercise redemption rights with respect to their Public Shares for a pro rata share of the funds in the Trust Account. |
• | Assuming Maximum Redemptions: This scenario assumes that Public Stockholders holding 15 million Public Shares will exercise their redemption rights for their pro rata share (approximately $10.00 per share) of the funds in the Trust Account. The Merger Agreement provides that the consummation of the Business Combination is conditioned on the Company having funds at the closing of the Business Combination of at least $500 million. |
Pro Forma Combined Per Share Data |
Sonder Equivalent Pro Forma Per Share Data (3) |
|||||||||||||||||||||||
Gores Metropoulos II (Historical) |
Sonder (Historical) |
(Assuming No Redemptions Scenario) |
(Assuming Maximum Redemptions Scenario) |
(Assuming No Redemptions Scenario) |
(Assuming Maximum Redemptions Scenario) |
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As of and for the six months ended June 30, 2021 (1) |
||||||||||||||||||||||||
Book Value per share (2) |
$ | (3.46 | ) | $ | (77.76 | ) | $ | 2.15 | $ | 1.70 | $ | 3.64 | $ | 2.87 | ||||||||||
Net gain (loss) per share of Class A Stock—basic and diluted |
$ | (0.78 | ) | $ | (0.52 | ) | $ | (0.55 | ) | $ | (0.87 | ) | $ | (0.92 | ) | |||||||||
Weighted average shares outstanding of Class A Stock—basic and diluted |
39,779,006 | 274,424,088 | 259,422,872 | |||||||||||||||||||||
Net gain (loss) per share of Class F Stock—basic and diluted |
$ | (0.78 | ) | |||||||||||||||||||||
Weighted average shares outstanding of Class F Stock—basic and diluted |
11,339,779 | |||||||||||||||||||||||
Net loss per share of Sonder Common Stock—basic and diluted |
$ | (20.18 | ) | |||||||||||||||||||||
Weighted average shares of Sonder Common Stock outstanding—basic and diluted |
7,558,055 | |||||||||||||||||||||||
As of and for the Year Ended December 31, 2020 (1) |
||||||||||||||||||||||||
Net gain (loss) per share of Class A Stock—basic and diluted |
$ | — | $ | (0.92 | ) | $ | (0.97 | ) | $ | (1.55 | ) | $ | (1.64 | ) | ||||||||||
Weighted average shares outstanding of Class A Stock—basic and diluted |
— | 274,424,088 | 259,422,872 | |||||||||||||||||||||
Net gain (loss) per share of Class F Stock—basic and diluted |
$ | — | ||||||||||||||||||||||
Weighted average shares outstanding of Class F Stock—basic and diluted |
11,500,000 | |||||||||||||||||||||||
Net loss per share of Sonder Common Stock—basic and diluted |
$ | (39.98 | ) | |||||||||||||||||||||
Weighted average shares of Sonder Common Stock outstanding—basic and diluted |
6,261,247 |
(1) | There were no cash dividends declared in the period presented. |
(2) | Book value per share is calculated as (a) total equity excluding preferred shares divided by (b) the total number of Common Stock outstanding classified in permanent equity. |
(3) | The equivalent per share data for Sonder is calculated by multiplying the combined pro forma per share data by the Per Share Sonder Common Stock Consideration set forth in the Merger Agreement. |
Name |
Age |
Title | ||
Dean Metropoulos |
74 | Chairman | ||
Alec Gores |
68 | Chief Executive Officer | ||
Andrew McBride |
40 | Chief Financial Officer and Secretary | ||
Randall Bort |
56 | Director | ||
Michael Cramer |
68 | Director | ||
Joseph Gatto |
63 | Director |
• | the appointment, compensation, retention, replacement, and oversight of the work of the independent auditors and any other independent registered public accounting firm engaged by us; |
• | pre-approving all audit and permitted non-audit services to be provided by the independent auditors or any other registered public accounting firm engaged by us, and establishing pre-approval policies and procedures; |
• | reviewing and discussing with the independent auditors all relationships the auditors have with us in order to evaluate their continued independence; |
• | setting clear hiring policies for employees or former employees of the independent auditors; |
• | setting clear policies for audit partner rotation in compliance with applicable laws and regulations; |
• | obtaining and reviewing a report, at least annually, from the independent auditors describing (i) the independent auditor’s internal quality-control procedures and (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues; |
• | reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and |
• | reviewing with management, the independent auditors, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities. |
• | reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation; |
• | reviewing and approving on an annual basis the compensation of all of our other officers; |
• | reviewing on an annual basis our executive compensation policies and plans; |
• | implementing and administering our incentive compensation equity-based remuneration plans; |
• | assisting management in complying with our proxy statement and annual report disclosure requirements; |
• | approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees; |
• | if required, producing a report on executive compensation to be included in our annual proxy statement; and |
• | reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors. |
• | the fact that our Initial Stockholders have agreed not to redeem any of the Founder Shares in connection with a stockholder vote to approve a proposed initial business combination; |
• | the fact that our Initial Stockholders have agreed to waive their rights to conversion price adjustments with respect to any Founder Shares they may hold in connection with the consummation of the Business Combination. Therefore, shares of Class F Stock held by the Initial Stockholders will convert on a one-for-one basis in connection with the consummation of the Business Combination (including the PIPE Investment); |
• | the fact that our Sponsor paid an aggregate of $25,000 for 11,500,000 Founder Shares and (after giving effect to the cancellation of 250,000 Founder Shares on March 7, 2021) the remaining 11,250,000 Founder Shares will have a significantly higher value at the time of the Business Combination, which if unrestricted and freely tradable would be valued at approximately $112.5 million but, given the restrictions on such shares, we believe such shares have less value; |
• | the fact that given the differential in the purchase price that our Sponsor paid for the Founder Shares as compared to the price of the Public Units sold in the Company IPO and the substantial number of shares of Common Stock that our Sponsor will receive upon conversion of the Founder Shares in connection with the Business Combination, our Sponsor and its affiliates may earn a positive rate of return on their investment even if the Common Stock trades below the price initially paid for the Public Units in the Company IPO and the Public Stockholders experience a negative rate of return following the completion of the Business Combination; |
• | the fact that our Initial Stockholders have agreed to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if we fail to complete an initial business combination by January 22, 2023; |
• | the fact that our Sponsor paid an aggregate of approximately $11,000,000 for its 5,500,000 Private Placement Warrants to purchase shares of Class A Stock, and that such Private Placement Warrants will expire worthless if an initial business combination is not consummated by January 22, 2023; |
• | the continued right of our Sponsor to hold our Class A Stock and the shares of Class A Stock to be issued to our Sponsor upon exercise of its Private Placement Warrants following the Business Combination, subject to certain lock-up periods; |
• | the fact that if the Trust Account is liquidated, including in the event we are unable to complete an initial business combination within the required time period, our Sponsor has agreed to indemnify us to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which we have entered into an acquisition agreement or claims of any third party (other than our independent public accountants) for services rendered or products sold to us, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account; |
• | the continued indemnification of our existing directors and officers and the continuation of our directors’ and officers’ liability insurance after the Business Combination; |
• | the fact that, in exchange for serving on the Board, each of our independent directors, Messrs. Bort, Cramer, and Gatto, received a nominal economic interest through the transfer from our Sponsor of 25,000 Founder Shares at their original purchase price of $0.002 per share. If the Company fails to complete an initial business combination by January 22, 2023, these Founder Shares will become worthless. As a result, our independent directors may have a conflict of interest in determining whether a particular business is an appropriate business with which to effectuate the Company’s initial business combination; |
• | the fact that our Sponsor, officers and directors will lose their entire investment in us and will not be reimbursed for any out-of-pocket |
• | the fact that our Sponsor, officers and directors would hold the following number of shares in the Post-Combination Company at the closing of the Business Combination: |
Name of Person/Entity |
Number of shares of Common Stock |
Value of Common Stock (1) |
||||||
Gores Metropoulos Sponsor II, LLC (2) |
15,175,000 | $ | 151,750,000 | |||||
Alec Gores (2) |
15,175,000 | $ | 151,750,000 | |||||
Dean Metropoulos |
0 | $ | 0 | |||||
Andrew McBride |
0 | $ | 0 | |||||
Randall Bort |
25,000 | $ | 250,000 | |||||
Michael Cramer |
25,000 | $ | 250,000 | |||||
Joseph Gatto |
25,000 | $ | 250,000 |
(1) | Assumes a value of $10.00 per share, the deemed value of the Common Stock in the Business Combination. |
(2) | Represents shares held by the Sponsor which is controlled indirectly by Mr. Gores. Mr. Gores may be deemed to beneficially own 11,175,000 shares of Class F Stock and 4,000,000 shares of Common Stock to be purchased under the Sponsor Subscription Agreement, provided, however, that the Sponsor may choose to syndicate such shares pursuant to the Sponsor Subscription Agreement (and the Company currently expects that all such shares will be syndicated), and ultimately exercises voting and dispositive power of the securities held by the Sponsor. Voting and disposition decisions with respect to such securities are made by Mr. Gores. Mr. Gores disclaims beneficial ownership of these securities except to the extent of any pecuniary interest therein. |
• | the fact that, at the closing of the Business Combination, we will enter into the Registration Rights Agreement with the Registration Rights Holders, which provides for registration rights to Registration Rights Holders and their permitted transferees; |
• | the fact that we entered into a Subscription Agreement with our Sponsor, pursuant to which our Sponsor has committed to purchase 4,000,000 shares of Class A Stock in the PIPE Investment for an aggregate commitment of approximately $40,000,000, provided that our Sponsor has the right to syndicate the Class A Stock purchased under such Subscription Agreement in advance of the closing of the Business Combination; and |
• | the fact that we will reimburse our Sponsor for the fees and expenses it incurs in connection with the Business Combination. |
• | the corporation could financially undertake the opportunity; |
• | the opportunity is within the corporation’s line of business; and |
• | it would not be fair to the corporation and its stockholders for the opportunity not to be brought to the attention of the corporation. |
Individual |
Entity |
Entity’s Business |
Affiliation | |||
Dean Metropoulos | Hostess Brands, Inc. | Consumer | Executive Chairman | |||
Pabst Brewing Company | Investments | Director | ||||
Alec Gores |
The Gores Group, LLC | Investments | Chief Executive Officer | |||
Gores Holdings VII, Inc. (1) |
Investments | Chairman | ||||
Gores Holdings VIII, Inc. (1) |
Investments | Chairman | ||||
Gores Technology Partners, Inc. (1) |
Investments | Chairman | ||||
Gores Technology Partners II, Inc. (1) |
Investments | Chairman | ||||
Gores Guggenheim, Inc. (1) |
Investments | Chairman | ||||
Luminar Technologies, Inc. | Automotive | Director | ||||
Andy McBride |
The Gores Group, LLC | Investments | Senior Vice President – Finance-Tax | |||
Gores Holdings VII, Inc. (1) |
Investments | Chief Financial Officer and Secretary | ||||
Gores Holdings VIII, Inc. (1) |
Investments | Chief Financial Officer and Secretary | ||||
Gores Technology Partners, Inc. (1) |
Investments | Chief Financial Officer and Secretary | ||||
Gores Technology Partners II, Inc. (1) |
Investments | Chief Financial Officer and Secretary | ||||
Gores Guggenheim, Inc. (1) |
Investments | Chief Financial Officer and Secretary |
Individual |
Entity |
Entity’s Business |
Affiliation | |||
Randall Bort |
Gores Holdings VII, Inc. (1) |
Investments | Director | |||
Gores Holdings VIII, Inc. (1) |
Investments | Director | ||||
Gores Guggenheim, Inc. (1) |
Investments | Director | ||||
SandTree Holdings, LLC | Real Estate Investments | Partner | ||||
Children’s Bureau | Non-Profit |
Trustee | ||||
Michael Cramer |
Hostess Brands, Inc. | Consumer | Chief Administrative Officer & Executive VP | |||
The University of Texas at Austin | Education | Founding Director – Texas Program in Sports and Media |
(1) | This entity’s amended and restated charter contains a waiver of the corporate opportunity doctrine. Accordingly, there is no conflicting obligation to bring opportunities to this entity before the Company. |
For the Period from July 21, 2020 (inception) through December 31, 2020 |
||||
Audit Fees |
$ | 40,000 | ||
Audit Related Fees |
— | |||
|
|
|||
Tax Fees |
— | |||
All Other Fees |
— | |||
|
|
|||
Total |
$ | 40,000 |
For the Six Months Ended June 30, 2021 |
||||||||
Class A |
Class F |
|||||||
Basic and diluted net income/(loss) per share: |
||||||||
Numerator: |
||||||||
Allocation of net income/(loss) including accretion of temporary equity |
$ | (31,106,139 | ) | $ | (8,867,410 | ) | ||
|
|
|
|
|||||
Denominator: |
||||||||
Weighted-average shares outstanding |
39,779,006 | 11,339,779 | ||||||
Basic and diluted net income/(loss) per share |
$ | (0.78 | ) | $ | (0.78 | ) |
• | |
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• | Safety: check-in, keyless entry, and no-line lobbies, which have long formed the foundation of Sonder’s tech-enabled offering, are now essential hallmarks of a safe stay. However, knowing that even ‘great’ isn’t good enough when it comes to its guests’ well-being, Sonder has deployed enhanced standards and services in response to the COVID-19 pandemic including: enhanced |
cleaning protocols, social distancing and occupancy limits in common areas, flexible cancellation policies, and contactless service through its in-app messaging platform to rapidly connect guests with Sonder’s guest services team. |
• | Demand Generation: |
• | Rent Savings: RevPAR |
• | Portfolio Rebalancing: expirations/non-renewals, or lease buy-outs), systematically reduce its footprint in underperforming markets and exit certain areas of its legacy portfolio. In particular, it planned to exit less favorable long-term rental units and certain scattered units where Sonder operated non-contiguous portions of a building. The COVID-19 pandemic accelerated this planned portfolio rebalancing. Through negotiations with real estate owners and exercise of termination rights, Sonder exited contracts for approximately 3,400 Live and Contracted Units from March 1, 2020 through December 31, 2020, allowing Sonder to rebalance its Total Portfolio and minimize cash losses during the height of lockdowns. |
• | Overhead Cost Reductions: COVID-19 pandemic in North America. In addition, Sonder paused all efforts to contract new units in order to focus on preserving cash and optimizing its existing Live Unit portfolio’s performance. As a result of these cost reduction initiatives, Sonder was able to greatly reduce annualized overhead expenses for 2020 compared to its budget established in the first quarter of 2020 (prior to the COVID-19 pandemic). |
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• | Increasing Consumer Demand for Travel: COVID-19 pandemic, travel has grown significantly over the last 20 years. Skift estimates there were 588 million global travelers in 1999, growing to 1.3 billion in 2019, an approximately 2.2x increase in 20 years. Additionally, over the last 20 years, according to the U.S. Bureau of Economic Analysis, Euromonitor and STR, hospitality revenues have generally outpaced GDP growth in the U.S. As the world continues to recover from the COVID-19 pandemic, Euromonitor expects consumer demand for travel to sharply rebound from the historic lows in 2020, which saw U.S. and global domestic travel decline by 42% and 33%, respectively. Euromonitor estimates consumer demand will surpass 2019 levels by 2022, with estimated 2022 U.S. and global domestic trips of approximately 1.2 billion and 13.7 billion, respectively. |
• | The Emergence of Short-Term Rentals as a Widely Accepted Hospitality Category: |
accommodations. Skift reports that October 2020 U.S. vacation rental occupancy exceeded October |
2019 levels, and U.S. vacation rental occupancy significantly exceeded U.S. hotel occupancy for the second half of 2020. Based on Skift data from March to December 2020, the percentage of leisure guests choosing to stay in a hotel declined from 50% to 41%, while short-term rentals increased by approximately 50% (from 6% to 9%). Skift believes the short-term rental space will become more professionalized in the years ahead, leading to greater acceptance of short-term rentals. Sonder believes it is well positioned to benefit disproportionately from these shifting consumer preferences given its unique hospitality product seeks to offer the best of both hotels and short-term rentals. |
• | The Role of Technological Disruption and Younger Generations’ Desire for Tech-Enabled Products: check-out. Sonder believes modern travelers expect to coordinate all aspects of a trip, as with most aspects of their life, via seamless technology, and the COVID-19 pandemic has only accelerated these trends. Travelers today are largely seeking contactless experiences, and Sonder believes this trend is here to stay. Sonder’s differentiated tech-first offering, its contactless service model and the mobile-first nature of its guest experience are expected to benefit Sonder as consumer needs continue to shift towards technology-driven hospitality offerings. |
• | The Rise of “Bleisure” Travel and Increase in Digital Nomads: COVID-19 pandemic is accelerating the rise of “bleisure” (mixed business and leisure travel) and an increase in “digital nomads” (people who choose to embrace a location-independent, technology-enabled lifestyle, allowing them to travel and work remotely). Both of these trends existed prior to the COVID-19 pandemic. For example, the percentage of business trips with a leisure component increased from 43% in 2016 to 60% in 2018, and the number of U.S. employees allowed to work from home rose at a compound annual growth rate of approximately 16% from 2004 to 2018, according to the Bureau of Labor Statistics. Sonder believes these trends will gain even more traction in the wake of employees’ workplace and remote work flexibility during the COVID-19 pandemic. According to Gartner, 31% of all workers worldwide are expected to be remote in 2022, a 14% increase from 2019. Sonder believes it is well positioned to benefit from the continued rise of both of these travel categories as its apartment units, which currently make up a majority of Live Units, are well suited for longer stays at an attractive price point. |
• | Popularity of Branded Hospitality Offerings: non-branded competitor products. |
• | Beautiful-but-expensive |
• | Consistent-but-unremarkable |
• | Authentic-but-unpredictable |
• | |
• | in-app curated local recommendations, and in-app messaging where nearly-instantaneous service is available 24/7; |
• | Sub-par room service can be replaced by a partnership with food delivery companies that deliver fast, high quality local food from a variety of restaurants to guests’ rooms for a significantly lower price; |
• | in-app partnership integrations. |
• | Search, Discovery & Booking: |
• | Check-In: check-in on their phone, completely bypassing the need for a front desk. Guests receive digital instructions and security access codes at the time of their stay, and can request and confirm an early check-in directly through the Sonder app. |
• | One-Touch WiFi:In-app one-touch WiFi connects Sonder’s guests easily to its speedy WiFi without memorizing long passwords or difficult network names. |
• | Digital Concierge: in-app at the touch of a button to help guests navigate the local flavor and experiences of each unique city and neighborhood. |
• | Customer Service On Demand: App-based service requests and issue reporting connect Sonder guests with localized Sonder city teams ready to provide timely and curated assistance. |
• | Check-out: check-out (subject to availability) directly through the Sonder app and find information regarding on and off premises bag storage. The simple app-based check-out process further engages guests by automatically following up with surveys and referral promotion codes. |
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• | business-to-business B2B |
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• | Demand: |
• | Supply availability: |
• | Regulations: |
• | Unit economics: |
• | Brand value: |
• | Synergies: |
• | Brand Review Committee BRC co-tenancy. The BRC aims to ensure each property Sonder signs will enable it to deliver a great guest experience designed to inspire. Sonder’s Chief Executive Officer, Global Head of Real Estate and VP of Real Estate Development sit on the BRC. |
• | Underwriting IA |
• | Financial Review Committee FRC |
• | Final Diligence Review |
• | Off-Their-Plate to support restaurant workers and healthcare professionals through donated meals and free ride credits to work; |
• | DEI |
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• | VTO |
• | |
1. |
Extend Hospitality to All: |
2. |
Strive for Better: |
3. |
Be Creative: |
4. |
Think Rigorously: |
5. |
Prioritize Relentlessly: |
6. |
Get it Done: |
7. |
Embrace Adversity: |
8. |
Obligation to Speak Up: |
9. |
Communicate Directly with Compassion: |
10. |
Be Grateful & Optimistic: |
Name |
Age |
Position | ||||
Executive Officers |
||||||
Francis Davidson |
28 | Chief Executive Officer and Director | ||||
Sanjay Banker |
46 | President and Chief Financial Officer | ||||
Nicole LaFlamme |
41 | Vice President of Human Resources | ||||
Satyen Pandya |
47 | Chief Technology Officer | ||||
Ritesh Patel |
40 | Vice President, Corporate Controller | ||||
Martin Picard |
35 | Global Head of Real Estate | ||||
Philip Rothenberg |
51 | General Counsel and Secretary | ||||
Non-Employee Directors |
||||||
Manon Brouillette |
53 | Director | ||||
Nabeel Hyatt |
44 | Director | ||||
Vivek Pattipati |
35 | Director | ||||
Frits Dirk van Paasschen |
60 | Director |
• | Portfolio Lifecycle |
• | Key Operating Metrics |
• | Non-GAAP Financial Metrics |
• | Other |
Portfolio Lifecycle |
||
Contracted Date | The date on which a new real estate contract is signed by all parties. | |
Takeover Date | The date on which Sonder receives the keys and is able to begin onboarding a building (e.g., moving in furniture, staging / photographing units for listing). | |
Live Date | The date on which building onboarding (e.g., moving in furniture, staging / photographing units for listing) is completed, the building is listed on Sonder.com, the Sonder app and other channels, and is open for guest bookings (often referred to as a building “going live”). This is the date on which Sonder can begin generating revenue from the building. | |
Lead Time | The length of time between the Contracted Date and the Takeover Date. This is the period during which Sonder does not pay rent and does not generate revenue, but has a contractual commitment from the real estate owner(s) that Sonder will receive the keys for the building once it is ready. | |
Opening Period | The period of time between the Takeover Date and the Live Date, representing the time it takes Sonder to complete building onboarding (e.g., moving in furniture, staging / photographing units for listing). This is the period in which Sonder is paying rent (or utilizing prenegotiated abatement) but is not yet able to generate revenue from the building. | |
Live Units | Units which are available for guest bookings on Sonder.com, the Sonder app and other channels. Sonder pays rent (or utilizes prenegotiated abatement) and is able to generate revenue from these units. | |
Contracted Units | Units which have signed real estate contracts, but are not yet available for guests to book. Sonder is not yet able to generate revenue from these units. Some of the real estate contracts for Contracted Units have contingencies that must be satisfied prior to Sonder’s takeover of the units or are terminable by Sonder or the landlord prior to Sonder’s takeover of the units. | |
Total Portfolio | Live Units plus Contracted Units. This includes any unit that has a signed real estate contract, regardless of whether or not the unit is available for guests to book. This excludes any units that have been dropped (i.e., the lease was terminated or allowed to expire). | |
Key Operating Metrics |
||
Bookable Nights | The total number of nights available for stays across all Live Units. This excludes nights lost to full building closures greater than 30 nights. | |
Occupied Nights | The total number of nights occupied across all Live Units. |
Occupancy Rate (OR) | Occupied Nights divided by Bookable Nights, expressed as a percentage. Represents the percentage of occupied nights out of the total available nights. | |
Room Nights Booked | Bookings made within a period of time, regardless of when the associated stay will occur, expressed in nights. Calculated as gross nights booked net of LOS modifications and cancellations, made only within the period of booking. | |
Average Daily Rate (ADR) | Revenue divided by Occupied Nights, expressed in U.S. dollars. Represents the average revenue earned per night occupied. | |
Revenue per Available Room (RevPAR) | Calculated either by dividing revenue by Bookable Nights, or by multiplying Average Daily Rate by Occupancy Rate, expressed in U.S. dollars. Represents the average revenue earned per available night. | |
Checkouts | The total number of unique stays in a period of time. Each unique stay counts as one Checkout regardless of how many nights the guest(s) stayed in the unit. | |
Length of Stay (LOS) | Occupied Nights divided by Checkouts which represents the average number of nights for each unique stay. | |
Non-GAAP FinancialMetrics |
||
Landlord Payments | Non-GAAP payments to real estate owners recognizing abatement at the time it is utilized (often at the commencement of a real estate contract), expressed in U.S. dollars. This recognizes the economic substance of the payment to real estate owners as reflected in the real estate contract (e.g., if a building’s Takeover Date was January 1, 2019 and it had three months of abatement at the beginning of the real estate contract, the Landlord Payments for the building in the first quarter of 2019 would be $0). | |
GAAP rent to Landlord Payment adjustment | The adjustment to translate GAAP rent to Landlord Payments, expressed in U.S. dollars. GAAP rent straight lines abatement over the duration of the real estate contract. In contrast, Landlord Payments recognizes abatement from real estate owners at the time abatement is utilized (often at the commencement of a real estate contract) in an effort to most accurately reflect the timing of cash outflows for rent. | |
Adjusted Gross Profit (Loss) | GAAP gross profit (loss) impacted by the GAAP rent to Landlord Payment adjustment, expressed in U.S. dollars. | |
Property Level Costs (PLC) | Variable costs directly associated with guest-facing functions in each of Sonder’s buildings, expressed in U.S. dollars. These costs include (i) channel fees paid to Online Travel Agencies (OTAs), (ii) customer service costs, (iii) laundry/consumables costs, (iv) maintenance costs, and (v) utilities & insurance costs. | |
Property Level Profit (Loss) (PLP or PLL) | GAAP gross profit (loss) (i) impacted by the GAAP rent to Landlord Payment adjustment, and (ii) less Property Level Costs, expressed in U.S. dollars. | |
Adjusted EBITDA | GAAP profit or loss from operations (i) impacted by the GAAP rent to Landlord Payment adjustment and (ii) excluding the impact of depreciation, stock-based compensation, COVID-19 pandemic related offboardings/other (costs associated with dropping units at the beginning of the COVID-19 pandemic), and cash payments from real estate owners received for capital expenditure financing, expressed in U.S. dollars. |
Other |
||
Fixed Lease | Real estate contract in which Sonder agrees to pay a fixed periodic fee per unit. | |
Mixed Lease | Real estate contract in which Sonder agrees to pay the real estate owner a minimum fixed periodic fee, plus a certain share of property revenue, typically with a capped periodic amount. | |
Revenue Share | Real estate contract in which Sonder agrees to pay the real estate owner a variable fee based on certain revenue related metrics as specified in the agreement. | |
Traditional Hotels | Represents upper upscale class of hotels in cities where Sonder operates. The upper upscale chain segment designation is determined by STR (a globally recognized resource for market data on the worldwide hospitality industry) based on each hotel brand’s Average Daily Rate for prior years. |
• | Growing total Live and Contracted Units by approximately 200% from approximately 4,300 units at December 31, 2018 to approximately 13,100 units at December 31, 2019, driven by real estate personnel growth and increased unit signing productivity (i.e., units signed per Sonder real estate business development professional (BD) per quarter); |
• | Launching its hotel product, with nine hotels live as of December 31, 2019; and |
• | Launching 12 new markets with Live Units, as well as signing its first real estate deal in six additional new markets. |
• | Following its six-month pause in prospecting and signing new properties during 2020, Sonder began rebuilding its pipeline across several real estate asset classes (hotels, apartments and office to apartment conversions). These opportunities were discovered through public databases and extensive local networking and prospecting efforts; |
• | Sonder’s late stage deal pipeline continued to grow rapidly in the first half of 2021, nearly doubling in size between December 31, 2020 and June 30, 2021; |
• | Sonder’s real estate team hit an all time productivity high in the first two quarters of 2021, signing approximately 40% and 30% more units per BD per quarter, respectively, than 2019 (pre-COVID-19 pandemic levels); and |
• | Sonder’s real estate team has begun scaling headcount rapidly, de-risking Sonder’s unit growth targets even if average BD productivity were to decline. |
• | Sonder’s proprietary technology is essential to its user experience—from enabling easy, intuitive browsing of Sonder’s full portfolio to allowing seamless reservations. Upon arrival at a Sonder property, Sonder’s “lobby on your phone” technology guides guests through the in-app check-in and one-touch WiFi, while Sonder’s digital concierge feature offers curated lists of localized food and experience recommendations to help guests get the most out of their stay. Sonder guests can book intra-stay cleaning and self-serve additional customer service requests on the Sonder app while also ensuring a frictionless check-out. |
• | In addition to Sonder’s guest-facing technology, proprietary technology powers Sonder’s business processes and operations, from supply growth to building openings and day-to-day operations. Sonder has developed: |
• | Its own infrastructure to fuel its real estate underwriting efforts; |
• | Technology to facilitate its global supply chain for furniture, art and fixtures; |
• | A proprietary booking engine; |
• | Pricing and calendar revenue management software; |
• | Room attribution algorithms; and |
• | Task and workflow management software. |
• | Fixed Lease agreement: The vast majority of Sonder’s historical contracts with real estate owners have been Fixed Lease agreements, whereby Sonder agrees to a fixed periodic fee per unit. Sonder then generates revenue on a nightly basis through guests booking and staying at the Sonder operated property. |
• | Mixed Lease agreement: Sonder sometimes employs a hybrid contract structure whereby Sonder agrees to pay the real estate owner a minimum fixed periodic fee, plus a certain share of property revenue, typically with a capped periodic amount. |
• | Revenue Share agreement: Sonder intends to sign an increasing number of Revenue Share agreements, whereby Sonder agrees to pay the real estate owner a variable fee based on certain revenue related metrics as specified in the agreement, rather than Sonder paying a fixed periodic rent to the property owner. |
Three Months Ended June 30, |
Change |
|||||||||||||||
2021 |
2020 |
# |
% |
|||||||||||||
Live (End of Period) |
5,500 | 4,300 | 1,200 | 28 | % | |||||||||||
Bookable Nights |
473,000 | 400,000 | 73,000 | 18 | % | |||||||||||
Occupied Nights |
321,000 | 228,000 | 93,000 | 41 | % | |||||||||||
RevPAR |
$ | 100 | $ | 47 | $ | 53 | 113 | % | ||||||||
Six Months Ended June 30, |
Change |
|||||||||||||||
2021 |
2020 |
# |
% |
|||||||||||||
Live (End of Period) |
5,500 | 4,300 | 1,200 | 28 | % | |||||||||||
Bookable Nights |
885,000 | 828,000 | 57,000 | 7 | % | |||||||||||
Occupied Nights |
594,000 | 496,000 | 98,000 | 20 | % | |||||||||||
RevPAR |
$ | 89 | $ | 73 | $ | 16 | 22 | % | ||||||||
Years Ended December 31, |
Change |
|||||||||||||||
2020 |
2019 |
# |
% |
|||||||||||||
Live (End of Period) |
4,500 | 4,600 | (100 | ) | (2) | % | ||||||||||
Bookable Nights |
1,559,000 | 1,018,000 | 541,000 | 53 | % | |||||||||||
Occupied Nights |
1,013,000 | 786,000 | 227,000 | 29 | % | |||||||||||
RevPAR |
$ | 74 | $ | 140 | $ | (66 | ) | (47) | % |
• | Units in ramp |
• | Market Mix |
• | Product Mix |
• | Seasonality |
Three Months Ended June 30, |
Six Months Ended June 30, |
Years Ended December 31, |
||||||||||||||||||||||
2021 |
2020 |
2021 |
2020 |
2020 |
2019 |
|||||||||||||||||||
GAAP Gross profit (loss) |
$ | 3,524 | $ | (9,546 | ) | $ | (4,123 | ) | $ | (14,591 | ) | $ | (21,317 | ) | $ | 18,044 | ||||||||
GAAP rent to Landlord Payments adjustment: |
||||||||||||||||||||||||
GAAP rent |
38,268 | 26,416 | 74,114 | 68,355 | 124,419 | 109,253 | ||||||||||||||||||
Landlord Payments |
(35,080 | ) | (22,651 | ) | (67,115 | ) | (63,323 | ) | (119,503 | ) | (90,076 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
GAAP rent to Landlord Payments adjustment |
3,188 | 3,765 | 6,999 | 5,032 | 4,916 | 19,177 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Adjusted Gross Profit (Loss) |
6,712 | (5,781 | ) | 2,876 | (9,559 | ) | (16,401 | ) | 37,221 | |||||||||||||||
Gross margin |
7.5 |
% |
(50.7 |
)% |
(5.2 |
)% |
(24.0 |
)% |
(18.4 |
)% |
12.6 |
% | ||||||||||||
GAAP rent to Landlord Payments Margin |
6.7 |
% |
20.0 |
% |
8.9 |
% |
8.3 |
% |
4.2 |
% |
13.4 |
% | ||||||||||||
Adjusted Gross Margin |
14.2 |
% |
(30.7 |
)% |
3.6 |
% |
(15.7 |
)% |
(14.2 |
)% |
26.0 |
% | ||||||||||||
Property Level Costs |
16,360 | 7,389 | 27,873 | 21,812 | 41,249 | 33,666 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Property Level Profit (Loss) |
$ | (9,648 | ) | $ | (13,170 | ) | $ | (24,997 | ) | $ | (31,371 | ) | $ | (57,650 | ) | $ | 3,555 | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Property Level Profit (Loss) Margin |
(20.4 |
)% |
(69.9 |
)% |
(31.7 |
)% |
(51.7 |
)% |
(49.8 |
)% |
2.5 |
% |
• | Abatement |
• | Transaction Structures |
• | The vast majority of Sonder’s historical contracts with real estate owners have been Fixed Lease agreements, whereby Sonder agrees to a fixed periodic fee per unit during the term of the lease. |
• | Sonder sometimes employs a hybrid Mixed Lease deal structure whereby it agrees to pay the real estate owner a minimum fixed periodic fee, plus a certain share of property revenue, typically with a capped periodic amount. |
• | In the future, Sonder intends to sign an increasing number of Revenue Share agreements, whereby Sonder agrees to pay the real estate owner a variable fee based on certain revenue related metrics as specified in the agreement, rather than Sonder paying a fixed periodic rent to the property owner. |
• | The transition to more liability light (Mixed Lease and Revenue Share) transaction structures is expected to increase Sonder’s Adjusted Gross Margin during the unit ramp process and partially offset the impact of seasonality, as real estate owner payments will be closer tied to revenue generated. |
• | Product Mix |
• | Market Mix |
• | Length of Stay LOS” |
• | Channel Fees |
• | Technological and Operational Improvements |
grows in each of its markets, it expects to increase PLC efficiency through scale and greater building concentration (e.g., shorter transit times between service requests, bulk and scaled buys, vendor standardization, transition from reactive to preventative maintenance) as well as technological improvements to drive further efficiency and project management (e.g., warehouse and inventory management, listing distribution, tech-enabled customer service dispatch, automated replies to basic inquiries and self-service for requests). |
Three Months Ended June 30, |
Six Months Ended June 30, |
Years Ended December 31, |
||||||||||||||||||||||
2021 |
2020 |
2021 |
2020 |
2020 |
2019 |
|||||||||||||||||||
Net loss |
$ | (73,949 | ) | $ | (60,799 | ) | $ | (152,490 | ) | $ | (122,542 | ) | $ | (250,316 | ) | $ | (178,249 | ) | ||||||
Interest expense, net |
12,522 | 1,669 | 16,349 | 3,176 | 6,402 | 1,133 | ||||||||||||||||||
Provision for income taxes |
70 | 3 | 93 | 3 | 323 | — | ||||||||||||||||||
Depreciation and amortization |
4,213 | 4,206 | 8,332 | 8,358 | 16,969 | 11,167 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
EBITDA |
(57,144 | ) | (54,921 | ) | (127,716 | ) | (111,005 | ) | (226,622 | ) | (165,949 | ) | ||||||||||||
GAAP rent to Landlord Payments adjustment |
3,188 | 3,765 | 6,999 | 5,032 | 4,916 | 19,177 | ||||||||||||||||||
Stock-based compensation |
2,448 | 1,742 | 16,601 | 4,809 | 7,223 | 3,380 | ||||||||||||||||||
Other expense (income), net |
(3,577 | ) | 4,862 | 65 | (6,131 | ) | (231 | ) | 6,013 | |||||||||||||||
COVID-19 related offboardings |
— | 3,507 | — | 3,507 | 9,875 | — | ||||||||||||||||||
FF&E allowance realized (1) |
475 | — | 1,006 | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Adjusted EBITDA |
$ | (54,610 | ) | $ | (41,045 | ) | $ | (103,045 | ) | $ | (103,788 | ) | $ | (204,839 | ) | $ | (137,379 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Represents cash payments from real estate owners received for capital expenditure financing |
• | Technological and Operational Improvements |
• | Utilized the recession relief clauses contained in many of its leases and further negotiated additional rent concessions and deferrals with real estate owners. These efforts provided Sonder with meaningful rent savings compared to its initial 2020 budget; |
• | Rebalanced its portfolio through negotiations with real estate owners and exercise of termination rights, which allowed it to exit contracts for nearly 3,400 Live and Contracted Units from March 1, 2020 through December 31, 2020, enabling Sonder to minimize cash losses during the height of COVID-19 lockdowns; |
• | Temporarily reduced its payroll costs through layoffs, furloughs, reduced hours, and temporary salary reductions, including more significant salary reductions for senior executives; and |
• | Paused all new deal signings from March through October 2020, focusing instead on existing properties and markets. |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||||||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||||||||||||||||||
Revenue |
$ | 47,269 | 100.0 | % | $ | 18,841 | 100.0 | % | $ | 78,827 | 100.0 | % | $ | 60,722 | 100.0 | % | ||||||||||||||||
Cost of revenue (excluding depreciation and amortization) |
43,745 | 92.5 | 28,387 | 150.7 | 82,950 | 105.2 | 75,313 | 124.0 | ||||||||||||||||||||||||
Operations and support |
34,889 | 73.8 | 22,641 | 120.2 | 60,312 | 76.5 | 57,704 | 95.0 | ||||||||||||||||||||||||
General and administrative |
24,615 | 52.1 | 15,156 | 80.4 | 56,764 | 72.0 | 36,424 | 60.0 | ||||||||||||||||||||||||
Research and development |
4,066 | 8.6 | 3,999 | 21.2 | 7,385 | 9.4 | 9,478 | 15.6 | ||||||||||||||||||||||||
Sales and marketing |
4,888 | 10.3 | 2,923 | 15.5 | 7,399 | 9.4 | 7,297 | 12.0 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total costs and expenses |
$ | 112,203 | 237.4 | % | $ | 73,106 | 388.0 | % | $ | 214,810 | 272.5 | % | $ | 186,216 | 306.7 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Loss from operations |
$ | (64,934 | ) | (137.4 | )% | $ | (54,265 | ) | (288.0 | )% | $ | (135,983 | ) | (172.5 | )% | $ | (125,494 | ) | (206.7 | )% | ||||||||||||
Interest expense, net and other expense (income), net |
8,945 | 18.9 | 6,531 | 34.7 | 16,414 | 20.8 | (2,955 | ) | (4.9 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Loss before income taxes |
(73,879 | ) | (156.3 | ) | (60,796 | ) | (322.7 | ) | (152,397 | ) | (193.3 | ) | (122,539 | ) | (201.8 | ) | ||||||||||||||||
Provision for income taxes |
70 | 0.1 | 3 | — | 93 | 0.1 | 3 | — | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net loss |
$ | (73,949 | ) | (156.4 | )% | $ | (60,799 | ) | (322.7 | )% | $ | (152,490 | ) | (193.4 | )% | $ | (122,542 | ) | (201.8 | )% | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Other comprehensive loss: |
||||||||||||||||||||||||||||||||
Change in foreign currency translation adjustment |
$ | 1,689 | 3.6 | % | $ | 4,990 | 26.5 | % | $ | 2,834 | 3.6 | % | $ | (6,876 | ) | (11.3 | )% | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Comprehensive loss |
$ | (72,260 | ) | (152.9 | )% | $ | (55,809 | ) | (296.2 | )% | $ | (149,656 | ) | (189.9 | )% | $ | (129,418 | ) | (213.1 | )% | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
Change |
|||||||||||||||
2021 |
2020 |
$ |
% |
|||||||||||||
Revenue |
$ | 47,269 | $ | 18,841 | $ | 28,428 | 150.9 | % | ||||||||
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
Change |
|||||||||||||||
2021 |
2020 |
$ |
% |
|||||||||||||
Revenue |
$ | 78,827 | $ | 60,722 | $ | 18,105 | 29.8 | % | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
Change |
|||||||||||||||
2021 |
2020 |
$ |
% |
|||||||||||||
Cost of revenue (excluding depreciation and amortization) |
$ | 43,745 | $ | 28,387 | $ | 15,358 | 54.1 | % | ||||||||
Operations and support |
34,889 | 22,641 | 12,248 | 54.1 | ||||||||||||
General and administrative |
24,615 | 15,156 | 9,459 | 62.4 | ||||||||||||
Research and development |
4,066 | 3,999 | 67 | 1.7 | ||||||||||||
Sales and marketing |
4,888 | 2,923 | 1,965 | 67.2 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total costs and expenses |
$ | 112,203 | $ | 73,106 | $ | 39,097 | 53.5 | % | ||||||||
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
Change |
|||||||||||||||
2021 |
2020 |
$ |
% |
|||||||||||||
Cost of revenue (excluding depreciation and amortization) |
$ | 82,950 | $ | 75,313 | $ | 7,637 | 10.1 | % | ||||||||
Operations and support |
60,312 | 57,704 | 2,608 | 4.5 | ||||||||||||
General and administrative |
56,764 | 36,424 | 20,340 | 55.8 | ||||||||||||
Research and development |
7,385 | 9,478 | (2,093 | ) | (22.1 | ) | ||||||||||
Sales and marketing |
7,399 | 7,297 | 102 | 1.4 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total costs and expenses |
$ | 214,810 | $ | 186,216 | $ | 28,594 | 15.4 | % | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
Change |
|||||||||||||||
2021 |
2020 |
$ |
% |
|||||||||||||
Interest expense, net |
$ | 12,522 | $ | 1,669 | $ | 10,853 | 650.3 | % | ||||||||
Other expense (income), net |
(3,577 | ) | 4,862 | (8,439 | ) | (173.6 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total interest expense, net and other expense (income), net |
$ | 8,945 | $ | 6,531 | $ | 2,414 | 37.0 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Six Months Ended June 30, |
Change |
|||||||||||||||
2021 |
2020 |
$ |
% |
|||||||||||||
Interest expense, net |
$ | 16,349 | $ | 3,176 | $ | 13,173 | 414.8 | % | ||||||||
Other expense (income), net |
65 | (6,131 | ) | 6,196 | (101.1 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total interest expense, net and other expense (income), net |
$ | 16,414 | $ | (2,955 | ) | $ | 19,369 | (655.5 | )% | |||||||
|
|
|
|
|
|
|
|
Years Ended December 31, |
||||||||||||||||
2020 |
2019 |
|||||||||||||||
Revenue |
$ | 115,678 | 100.0 | % | $ | 142,910 | 100.0 | % | ||||||||
Cost of revenue (excluding depreciation and amortization) |
136,995 | 118.4 | 124,866 | 87.4 | ||||||||||||
Operations and support |
115,072 | 99.5 | 105,401 | 73.8 | ||||||||||||
General and administrative |
77,033 | 66.6 | 60,894 | 42.6 | ||||||||||||
Research and development |
17,552 | 15.2 | 15,737 | 11.0 | ||||||||||||
Sales and marketing |
12,848 | 11.1 | 7,115 | 5.0 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total costs and expenses |
359,500 | 310.8 | 314,013 | 219.7 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss from operations |
(243,822 | ) | (210.8 | ) | (171,103 | ) | (119.7 | ) | ||||||||
Interest expense, net and other expense, net |
6,171 | 5.3 | 7,146 | 5.0 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before income taxes |
(249,993 | ) | (216.1 | ) | (178,249 | ) | (124.7 | ) | ||||||||
Provision for income taxes |
323 | 0.3 | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss |
$ | (250,316 | ) | (216.4 | )% | $ | (178,249 | ) | (124.7 | )% | ||||||
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive loss: |
||||||||||||||||
Change in foreign currency translation adjustment |
(740 | ) | (0.6 | ) | 6,284 | 4.4 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Comprehensive loss |
$ | (251,056 | ) | (217.0 | )% | $ | (171,965 | ) | (120.3 | )% | ||||||
|
|
|
|
|
|
|
|
Years Ended December 31, |
Change |
|||||||||||||||
2020 |
2019 |
$ |
% |
|||||||||||||
Revenue |
$ | 115,678 | $ | 142,910 | $ | (27,232 | ) | (19.1 | )% |
Years Ended December 31, |
Change |
|||||||||||||||
2020 |
2019 |
$ |
% |
|||||||||||||
Cost of revenue (excluding depreciation and amortization) |
$ | 136,995 | $ | 124,866 | $ | 12,129 | 9.7 | % | ||||||||
Operations and support |
115,072 | 105,401 | 9,671 | 9.2 | ||||||||||||
General and administrative |
77,033 | 60,894 | 16,139 | 26.5 | ||||||||||||
Research and development |
17,552 | 15,737 | 1,815 | 11.5 | ||||||||||||
Sales and marketing |
12,848 | 7,115 | 5,733 | 80.6 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total costs and expenses |
$ | 359,500 | $ | 314,013 | $ | 45,487 | 14.5 | % | ||||||||
|
|
|
|
|
|
|
|
Years Ended December 31, |
Change |
|||||||||||||||
2020 |
2019 |
$ |
% |
|||||||||||||
Interest expense, net |
$ | 6,402 | $ | 1,133 | $ | 5,269 | 465.0 | % | ||||||||
Other (income) expense, net |
(231 | ) | 6,013 | (6,244 | ) | (103.8 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other (income) expense, net |
$ | 6,171 | $ | 7,146 | $ | (975 | ) | (13.6 | )% | |||||||
|
|
|
|
|
|
|
|
Years Ended December 31, |
Change |
|||||||||||||||
2020 |
2019 |
$ |
% |
|||||||||||||
Provision for income taxes |
$ | 323 | $ | — | $ | 323 | 100 | % |
Six Months Ended June 30, |
Years Ended December 31, |
|||||||||||||||
2021 |
2020 |
2020 |
2019 |
|||||||||||||
Net cash used in operating activities |
$ | (96,253 | ) | $ | (99,027 | ) | $ | (202,502 | ) | $ | (135,860 | ) | ||||
Net cash used in investing activities |
(6,900 | ) | (9,238 | ) | (14,850 | ) | (24,257 | ) | ||||||||
Net cash provided by financing activities |
158,729 | 194,027 | 226,561 | 218,715 | ||||||||||||
Effects of foreign exchange on cash |
(258 | ) | (1,056 | ) | (347 | ) | 2,279 | |||||||||
Net change in cash and restricted cash |
55,318 | 84,706 | 8,862 | 60,877 |
Payments Due by Period |
||||||||||||||||||||
Total |
Less than 1 Year |
1-3 Years |
4-5 Years |
More than 5 Years |
||||||||||||||||
2018 Term Loan |
$ | 43,261 | $ | 17,038 | $ | 26,223 | $ | — | $ | — | ||||||||||
Operating Lease Obligations (1) |
2,527,872 | 200,157 | 913,617 | 540,925 | 873,173 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 2,571,133 | $ | 217,195 | $ | 939,840 | $ | 540,925 | $ | 873,173 | ||||||||||
|
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(1) | Operating lease obligations primarily represent the initial contracted term for leases of Sonder’s revenue generating buildings and partial buildings, not including any future optional renewal periods. |
• | revenue, rent, and cleaning fees, which are included in cost of revenue, associated with bookings through its direct and indirect channels denominated in currencies other than the U.S. dollar; |
• | balances held as funds receivable and amounts held on behalf of guests as well as funds payable and amounts payable to guests; and |
• | intercompany balances primarily related to its payment entities that process guest payments. |
• | Expected term . Sonder estimates the expected term based on the simplified method, which defines the expected term as the average of the contractual term and the vesting period. |
• | Risk-free interest rate . The risk-free interest rate is based on the yield curve of a zero coupon U.S. Treasury bond on the date the stock option award was granted with a maturity equal to the expected term of the stock option award. |
• | Expected volatility . Sonder estimates the volatility of its common stock on the date of grant based on the average historical stock price volatility of comparable publicly-traded companies due to the lack of sufficient historical data for Sonder’s common stock price. |
• | Expected dividend yield . Expected dividend yield is zero, as Sonder has not paid and does not anticipate paying dividends on its common stock. |
• | the price at which recent equity was issued by Sonder or transacted between third parties; |
• | the rights, preferences, privileges of Sonder’s preferred stock relative to those of its common stock; |
• | actual and projected financial results; |
• | risks, prospects, economic and market conditions; |
• | the time frame for a potential public offering; |
• | estimates of weighted average cost of capital; and |
• | the lack of marketability of Sonder’s common stock. |
Name |
Age |
Position | ||||
Executive Officers |
||||||
Francis Davidson |
28 | Chief Executive Officer | ||||
Sanjay Banker |
46 | President and Chief Financial Officer | ||||
Nicole LaFlamme |
41 | Vice President of Human Resources | ||||
Satyen Pandya |
47 | Chief Technology Officer | ||||
Ritesh Patel |
40 | Vice President, Corporate Controller | ||||
Martin Picard |
35 | Global Head of Real Estate | ||||
Philip Rothenberg |
51 | General Counsel and Secretary | ||||
Non-Employee Directors |
||||||
Manon Brouillette |
53 | Director | ||||
Nabeel Hyatt |
44 | Director | ||||
Frits Dirk van Paasschen |
60 | Director |
• | evaluating the performance, independence and qualifications of the Post-Combination Company’s independent auditors and determining whether to retain the Post-Combination Company’s existing independent auditors or engage new independent auditors; |
• | reviewing the Post-Combination Company’s financial reporting processes and disclosure controls; |
• | reviewing and approving the engagement of the Post-Combination Company’s independent auditors to perform audit services and any permissible non-audit services; |
• | reviewing the quality and adequacy of the Post-Combination Company’s internal control policies and procedures, including the responsibilities, budget and staffing of the Post-Combination Company’s internal audit function; |
• | reviewing with the independent auditors, and internal audit department, if applicable, the annual audit plan; |
• | obtaining and reviewing at least annually a report by the Post-Combination Company’s independent auditors describing the independent auditors’ internal quality control procedures, issues raised by the most recent internal quality-control review and all relationships between the independent auditor and the Post-Combination Company, if any; |
• | monitoring the rotation of the lead partner of the Post-Combination Company’s independent auditor on the Post-Combination Company’s engagement team as required by law; |
• | prior to engagement of any independent auditor, and at least annually thereafter, reviewing relationships that may reasonably be thought to bear on their independence, and assessing and otherwise taking the appropriate action to oversee the independence of the Post-Combination Company’s independent auditor; |
• | reviewing the Post-Combination Company’s annual and quarterly financial statements and reports, including the disclosures contained in “ Sonder Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | reviewing with Post-Combination Company’s independent auditors and management significant issues in internal audit reports and responses by management; |
• | reviewing with management and the Post-Combination Company’s auditors any earnings press releases and other public announcements; |
• | establishing and overseeing procedures for the receipt, retention and treatment of complaints received by the Post-Combination Company’s regarding accounting, internal accounting controls or auditing matters; |
• | preparing the report that the SEC requires in the Post-Combination Company’s annual proxy statement; |
• | reviewing and providing oversight of any related party transactions in accordance with the Post-Combination Company’s related party transaction policy and reviewing and monitoring compliance with legal, regulatory and ethical responsibilities; |
• | reviewing the Post-Combination Company’s major financial risk exposures; and |
• | reviewing and evaluating on an annual basis the performance of the audit committee and the audit committee charter. |
• | reviewing and approving the corporate goals and objectives that pertain to the determination of executive compensation; |
• | reviewing and approving the compensation and other terms of employment of the Post-Combination Company’s executive officers; |
• | making recommendations to the Post-Combination Company Board regarding the adoption or amendment of equity and cash incentive plans and approving amendments to such plans to the extent authorized by the Post-Combination Company Board; |
• | reviewing and making recommendations to the Post-Combination Company Board regarding the type and amount of compensation to be paid or awarded to the Post-Combination Company’s non-employee board members; |
• | reviewing and establishing stock ownership guidelines for executive officers and non-employee board members; |
• | reviewing and assessing the independence of compensation consultants, independent legal counsel and other advisors as required by Section 10C of the Exchange Act; |
• | administering the Post-Combination Company’s equity incentive plans, to the extent such authority is delegated by the Post-Combination Company Board; |
• | reviewing and approving the terms of any employment agreements, severance arrangements, transition or consulting agreements, retirement agreements and change-in-control |
• | approving or recommending for approval the creation or revision of any clawback policy allowing the Post-Combination Company to recoup compensation paid to employees; |
• | reviewing with management Post-Combination Company’s disclosures under the caption “Compensation Discussion and Analysis” in the Post-Combination Company’s periodic reports or proxy statements to be filed with the SEC, to the extent such caption is included in any such report or proxy statement; |
• | preparing an annual report on executive compensation that the SEC requires in the Post-Combination Company’s annual proxy statement; and |
• | reviewing and evaluating on an annual basis the performance of the compensation committee and recommending such changes as deemed necessary with the Post-Combination Company Board. |
• | identifying, reviewing and making recommendations of candidates to serve on the Post-Combination Company Board; |
• | evaluating the performance of the Post-Combination Company Board, committees of the Post-Combination Company Board and individual directors and determining whether continued service on the Post-Combination Company Board is appropriate; |
• | evaluating nominations by stockholders of candidates for election to the Post-Combination Company Board; |
• | evaluating the current size, composition and governance of the Post-Combination Company Board and its committees and making recommendations to the Post-Combination Company Board for approvals; |
• | reviewing the Post-Combination Company Board’s leadership structure, including the separation of the Chairman and Chief Executive Officer roles and/or appointment of a lead independent director of the Board; |
• | reviewing corporate governance policies and principles and recommending to the Post-Combination Company Board any changes to such policies and principles; |
• | reviewing issues and developments related to corporate governance; |
• | reviewing, approving, and monitoring directors’ compliance with the Post-Combination Company’s Code of Business Conduct and Ethics; |
• | assisting the Post-Combination Company in fulfilling its corporate responsibility strategy; and |
• | reviewing periodically the nominating and corporate governance committee charter, structure and membership requirements and recommending any proposed changes to the Post-Combination Company Board, including undertaking an annual review of its own performance. |
• | for any transaction from which the director derives an improper personal benefit; |
• | for any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; |
• | for any unlawful payment of dividends or redemption of shares; or |
• | for any breach of a director’s duty of loyalty to the corporation or its stockholders. |
• | Provide market-competitive compensation opportunities to hire, motivate, and retain high performing executives whose experience, skills and impact are critical to our success; |
• | Provide fixed cash compensation and long-term incentives that encourage appropriate levels of risk-taking by the executive team and align their interests with those of company stakeholders; |
• | Ensure that Sonder’s compensation program is equitable for similarly-situated executives to drive collaboration towards achievement of its long-term business goals; and |
• | For executives other than Sonder’s CEO, Sonder’s compensation program has two basic components: base salaries and initial and periodic grants of stock options with four-year vesting. |
Name and Principal Position |
Year |
Salary ($) (1) |
Bonus ($) (2) |
Stock Awards ($) |
Option Awards ($) (3) |
All Other Compensation ($) |
Total ($) |
|||||||||||||||||||||
Francis Davidson, Chief Executive Officer |
2020 | $ | 180,493 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 180,493 | |||||||||||||||
Sanjay Banker, President and Chief Financial Officer |
2020 | $ | 345,731 | $ | 100,000 | $ | 0 | $ | 2,513,500 | $ | 0 | $ | 2,959,231 | |||||||||||||||
Satyen Pandya, Chief Technology Officer |
2020 | $ | 4,384 | $ | 50,000 | $ | 0 | $ | 2,354,500 | $ | 0 | $ | 2,408,884 |
(1) | The amounts in this column reflect amounts actually paid to the executive officers in 2020, including COVID-19 related salary reductions in effect for all executive officers (other than Mr. Pandya, who commenced employment in 2020) from March 29, 2020 until September 27, 2020. During the period of the COVID-19 related salary reductions, (i) Mr. Davidson’s annual salary was reduced from $360,000 to $0 and (ii) Mr. Banker’s annual salary was reduced by 15% from $373,680 to $317,628. For Mr. Pandya, amounts in this column reflect amounts actually paid in 2020 based on the executive officer’s start date of December 28, 2020. |
(2) | The amounts in this column reflect the bonus amounts paid to the executive officers in 2020. Mr. Banker received a $100,000 bonus as part of his prior annual target bonus agreement. Mr. Pandya received a $50,000 signing bonus when joining Sonder. |
(3) | The amounts in this column represent the aggregate grant-date fair value of awards granted to each named executive officer in 2020, computed in accordance with the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC) Topic 718. See Note 14. Stockholders’ Deficit to the audited consolidated financial statements of Sonder appearing herein for a discussion of the assumptions made by Sonder in determining the grant-date fair value of Sonder’s equity awards. |
Option Awards |
Stock Awards | |||||||||||||||||||||||||||||
Name |
Number of Securities Underlying Unexercised Options Exercisable (#) (1) |
Number of Securities Underlying Unexercised Options Unexercisable (#) |
Option Exercise Price ($) (2) |
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 ($) (3) | ||||||||||||||||||||||||
Francis Davidson |
— | — | — | — | 4,507,642 | (4) |
$22,132,522 | |||||||||||||||||||||||
Sanjay Banker |
675,803 | 675,803 | (5 |
) |
2.14 | 1/28/2029 | — | — | ||||||||||||||||||||||
1,301 | 0 | (6) |
4.63 | 6/18/2030 | — | — | ||||||||||||||||||||||||
0 | 1,000,000 | (7) |
4.52 | 11/5/2030 | — | — | ||||||||||||||||||||||||
Satyen Pandya |
0 | 850,000 | (8 |
) |
4.91 | 12/29/2030 | — | — |
(1) | All stock options granted prior to 2020 were granted pursuant to the Sonder Canada Inc. Stock Option Plan. All stock options granted in 2020 were granted pursuant to the 2019 Plan. |
(2) | This column represents the fair market value of a share of Sonder common stock on the date of the grant, as determined by the Sonder Board. |
(3) | The amounts in this column represent the aggregate grant-date fair value of awards granted to each named executive officer, computed in accordance with FASB’s ASC Topic 718. See Note 14. Stockholders’ Deficit to the audited consolidated financial statements of Sonder included herein for a discussion of the assumptions made by Sonder in determining the grant-date fair value of Sonder’s equity awards. |
(4) | Represents 935,549 shares subject to a service-based vesting condition, and 3,572,093 shares subject to performance-based vesting conditions. These shares were issued upon the exercise of an option to purchase 5,613,290 shares granted on November 15, 2019, which was fully exercised by Mr. Davidson on December 2, 2019 through the issuance of a promissory note to Sonder in the amount of $24.6 million. Upon the closing of the Business Combination, approximately 1.5 million shares will be repurchased by the Company to extinguish the promissory note, with a total principal and accrued interest amount of $25.4 million as of June 30, 2021. The actual number of shares repurchased will be determined before the completion of the Business Combination based on the value of the Sonder Common Stock and amount of principal and accrued interest at that time. 2,041,197 of the shares subject to the award vest in 72 equal |
monthly installments starting on October 1, 2017, generally subject to Mr. Davidson’s continued employment through each applicable vesting date. 3,572,093 shares of the award vest upon the achievement of performance-based vesting conditions: 1,530,897 shares vest upon a liquidity event, 1,020,598 shares vest upon a financing event, and 1,020,598 shares vest if Sonder achieves a market capitalization target of $5,000,000,000 on or prior to November 15, 2026, subject to Mr. Davidson remaining an employee through such vesting date. The shares subject to the liquidity event vesting condition and financing event vesting condition vested in February 2021. This award is subject to certain acceleration benefits pursuant to the underlying option agreement as described below under “ Potential Payments Upon Termination or Change of Control |
(5) | Represents an option to purchase common stock granted on January 28, 2019, which vested 25% on January 28, 2020 and vests in equal monthly installments over a period of 36 months thereafter, generally subject to Mr. Banker’s continued employment through each applicable vesting date. This option is subject to certain acceleration benefits pursuant to Mr. Banker’s offer letter as described below under “ Named Executive Officer Employment Arrangements – Sanjay Banker |
(6) | Represents an option to purchase common stock granted on June 18, 2020, which vested 100% on the grant date. |
(7) | Represents an option to purchase common stock granted on November 5, 2020, in connection with Mr. Banker’s appointment to President, which vests 25% on November 5, 2021 and thereafter vests in equal monthly installments over a period of 36 months. |
(8) | Represents an option to purchase common stock granted on December 29, 2020, which will vest 25% on December 28, 2021 and vests in equal monthly installments over a period of 36 months thereafter. This option is subject to certain acceleration benefits pursuant to the underlying option agreement, as described below under “ Named Executive Officer Employment Arrangements – Satyen Pandya |
• | 2,250,000,000 shares will be designated Common Stock; |
• | 2,000,000,000 shares will be designated Post-Combination Company Special Voting Common Stock; and |
• | 250,000,000 shares will be designated as Preferred Stock. |
• | if we were to seek to amend the Amended and Restated Certificate of Incorporation to increase or decrease the par value of a class of the capital stock, then that class would be required to vote separately to approve the proposed amendment; and |
• | if we were to seek to amend the Amended and Restated Certificate of Incorporation in a manner that alters or changes the powers, preferences, or special rights of a class of capital stock in a manner that affected its holders adversely, then that class would be required to vote separately to approve the proposed amendment. |
• | in whole and not in part; |
• | at a price of $0.01 per Public Warrant; |
• | upon not less than 30 days’ prior written notice of redemption (the “ 30-day redemption period |
• | if, and only if, the reported last sale price of the Common Stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending three business days before we send the notice of redemption to the Public Warrant holders. |
• | in whole and not in part; |
• | at a price equal to a number of shares of Class A Stock to be determined by reference to the table below, based on the redemption date and the “fair market value” of our Class A Stock except as otherwise described below; |
• | if, and only if, there is an effective registration statement covering the shares of Class A Stock issuable upon exercise of the Public Warrants and a current prospectus relating thereto available throughout the 30-day period after written notice of redemption is given; |
• | upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and |
• | if, and only if, the last reported sale price of our Class A Stock equals or exceeds $10.00 per share (as adjusted per share splits, share dividends, reorganizations, reclassifications, recapitalizations and the like) on the trading day prior to the date on which we send the notice of redemption to the warrant holders. |
Redemption Date |
Fair Market Value of Class A Stock |
|||||||||||||||||||||||||||||||||||
(period to expiration of warrants) |
£ $10.00 |
$11.00 |
$12.00 |
$13.00 |
$14.00 |
$15.00 |
$16.00 |
$17.00 |
$18.00 |
|||||||||||||||||||||||||||
57 months |
0.257 | 0.277 | 0.294 | 0.310 | 0.324 | 0.337 | 0.348 | 0.358 | 0.365 | |||||||||||||||||||||||||||
54 months |
0.252 | 0.272 | 0.291 | 0.307 | 0.322 | 0.335 | 0.347 | 0.357 | 0.365 | |||||||||||||||||||||||||||
51 months |
0.246 | 0.268 | 0.287 | 0.304 | 0.320 | 0.333 | 0.346 | 0.357 | 0.365 | |||||||||||||||||||||||||||
48 months |
0.241 | 0.263 | 0.283 | 0.301 | 0.317 | 0.332 | 0.344 | 0.356 | 0.365 | |||||||||||||||||||||||||||
45 months |
0.235 | 0.258 | 0.279 | 0.298 | 0.315 | 0.330 | 0.343 | 0.356 | 0.365 | |||||||||||||||||||||||||||
42 months |
0.228 | 0.252 | 0.274 | 0.294 | 0.312 | 0.328 | 0.342 | 0.355 | 0.364 | |||||||||||||||||||||||||||
39 months |
0.221 | 0.246 | 0.269 | 0.290 | 0.309 | 0.325 | 0.340 | 0.354 | 0.364 | |||||||||||||||||||||||||||
36 months |
0.213 | 0.239 | 0.263 | 0.285 | 0.305 | 0.323 | 0.339 | 0.353 | 0.364 | |||||||||||||||||||||||||||
33 months |
0.205 | 0.232 | 0.257 | 0.280 | 0.301 | 0.320 | 0.337 | 0.352 | 0.364 | |||||||||||||||||||||||||||
30 months |
0.196 | 0.224 | 0.250 | 0.274 | 0.297 | 0.316 | 0.335 | 0.351 | 0.364 | |||||||||||||||||||||||||||
27 months |
0.185 | 0.214 | 0.242 | 0.268 | 0.291 | 0.313 | 0.332 | 0.350 | 0.364 | |||||||||||||||||||||||||||
24 months |
0.173 | 0.204 | 0.233 | 0.260 | 0.285 | 0.308 | 0.329 | 0.348 | 0.364 | |||||||||||||||||||||||||||
21 months |
0.161 | 0.193 | 0.223 | 0.252 | 0.279 | 0.304 | 0.326 | 0.347 | 0.364 | |||||||||||||||||||||||||||
18 months |
0.146 | 0.179 | 0.211 | 0.242 | 0.271 | 0.298 | 0.322 | 0.345 | 0.363 | |||||||||||||||||||||||||||
15 months |
0.130 | 0.164 | 0.197 | 0.230 | 0.262 | 0.291 | 0.317 | 0.342 | 0.363 | |||||||||||||||||||||||||||
12 months |
0.111 | 0.146 | 0.181 | 0.216 | 0.250 | 0.282 | 0.312 | 0.339 | 0.363 | |||||||||||||||||||||||||||
9 months |
0.090 | 0.125 | 0.162 | 0.199 | 0.237 | 0.272 | 0.305 | 0.336 | 0.362 | |||||||||||||||||||||||||||
6 months |
0.065 | 0.099 | 0.137 | 0.178 | 0.219 | 0.259 | 0.296 | 0.331 | 0.362 | |||||||||||||||||||||||||||
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 |
• | either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder was approved by the Post-Combination Company Board prior to the time that the stockholder became an interested stockholder; |
• | upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding shares owned by directors who are also officers of the corporation and shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or |
• | at or subsequent to the time the stockholder became an interested stockholder, the business combination was approved by the Post-Combination Company Board and authorized at an annual or special meeting of the stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder. |
• | Board of Directors Vacancies |
• | Classified Board. Management of the Post-Combination Company |
• | Directors Removed Only for Cause. |
• | Stockholder Action; Special Meeting of Stockholders. |
Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws further provide that special meetings of stockholders may be called only by a majority of the Post-Combination Company Board, the chair of the Post-Combination Company Board, the Chief Executive Officer of the Post-Combination Company or the president of the Post-Combination Company, thus prohibiting stockholder action to call a special meeting. These provisions might delay the ability of stockholders to force consideration of a proposal or for stockholders controlling a majority of the Post-Combination Company’s capital stock to take any action, including the removal of directors. |
• | Advance Notice Requirements for Stockholder Proposals and Director Nominations. |
• | No Cumulative Voting. |
• | Amendment of Charter and Bylaws Provisions. two-thirds of the voting power of the Post-Combination Company’s then outstanding voting securities. |
• | Issuance of Undesignated Preferred Stock. |
• | Exclusive Forum. |
the Post-Combination Company in writing, the federal district courts of the United States will be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. However, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all such Securities Act actions. Accordingly, both state and federal courts have jurisdiction to entertain such claims. While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions. In such instance, we would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of the Amended and Restated Bylaws. However, there can be no assurance that the provision will be enforced by a court in those other jurisdictions. Any person or entity purchasing or otherwise acquiring any interest in the Post-Combination Company’s securities shall be deemed to have notice of and consented to these provisions. These provisions may have the effect of discouraging lawsuits against the Post-Combination Company or its directors and officers. |
• | 1% of the number of shares then outstanding; and |
• | the average weekly trading volume of the shares of common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. |
• | the issuer of the securities that was formerly a shell company has ceased to be a shell company; |
• | the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act; |
• | the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and |
• | at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company. |
• | for any transaction from which the director derives an improper personal benefit; |
• | for any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; |
• | for any unlawful payment of dividends or redemption of shares; or |
• | for any breach of a director’s duty of loyalty to the corporation or its stockholders. |
Company |
Sonder |
Post-Combination Company | ||||
Authorized Capital | The total number of shares of all classes of capital stock, each with a par value of $0.0001 per share, which the Company is authorized to issue is 441,000,000 shares, consisting of (a) 440,000,000 shares of Common Stock, including (i) 400,000,000 shares of Class A Stock, and (ii) 40,000,000 shares of Class F Stock, and (b) 1,000,000 shares of Preferred Stock. | The total number of shares of all classes of capital stock, each with a par value of $0.000001 per share, which the Company is authorized to issue is 352,230,628 shares, consisting of (a) 143,234,881 shares of Common Stock, (b) 35,192,637 shares of Special Voting Common Stock, and (c) 173,803,110 shares of Preferred Stock. | The total number of shares of all classes of capital stock, each with a par value of $0.000001 per share, which the Company is authorized to issue is 4,500,000,000 shares, consisting of (a) 2,250,000,000 shares of Common Stock, (b) 2,000,000,000 shares of Special Voting Common Stock, and (c) 250,000,000 shares of Preferred Stock. |
Company |
Sonder |
Post-Combination Company | ||||
Issuance of Preferred Stock | Subject to certain requirements relating to an initial business combination set forth in the Current Company Certificate, the Board is expressly authorized to provide out of the unissued shares of the Preferred Stock for one or more series of Preferred Stock and to establish from time to time the number of shares to be included in each such series and to fix the voting rights, if any, designations, powers, preferences and relative, participating, optional, special and other rights, if any, of each such series and any qualifications, limitations and restrictions thereof, as shall be stated in the resolution or resolutions adopted by the Board providing for the issuance of such series and included in a certificate of designation filed pursuant to the DGCL | There are protective provisions in place such that the board of directors of Sonder cannot authorize or issue Preferred Stock without certain stockholder approval. | The board of directors will have the authority, without further action by stockholders, to issue up to 250,000,000 shares of undesignated Preferred Stock with rights, powers and preferences, including voting rights, designated from time to time by the board of directors. | |||
Voting Rights | Except as otherwise required by law or the Current Company Certificate, the holders of shares of Common Stock shall be entitled to one vote for each such share on each matter properly submitted to the stockholders on which the holders of the Common Stock are entitled to vote. | Holders of Common Stock and Special Voting Common Stock are entitled to one vote for each share held as of the record date for the determination of the stockholders entitled to vote on such matters, except as otherwise required by law. | Holders of Common Stock and Special Voting Common Stock are entitled to one vote for each share held as of the record date for the determination of the stockholders entitled to vote on such matters, except as otherwise required by law. |
Company |
Sonder |
Post-Combination Company | ||||
Cumulative Voting | Delaware law provides that a corporation may grant stockholders cumulative voting rights for the election of directors in its certificate of incorporation. However, the Current Company Certificate does not authorize cumulative voting. | Delaware law provides that a corporation may grant stockholders cumulative voting rights for the election of directors in its certificate of incorporation. However, the Sonder Charter does not authorize cumulative voting. | Delaware law provides that a corporation may grant stockholders cumulative voting rights for the election of directors in its certificate of incorporation. However, the Amended and Restated Certificate of Incorporation does not authorize cumulative voting. | |||
Number of Directors | The Company’s current bylaws provide that the number of directors of the Company shall be fixed exclusively by resolution of the Board. Subject to the special rights of the holders of any series of Preferred Stock to elect directors, commencing at the first annual meeting of the stockholders, and at each annual meeting of the stockholders thereafter, directors elected to succeed those directors whose terms expire shall be elected for a term of office to expire at the second annual meeting of the stockholders after their election. A director shall hold office until the annual meeting for the year in which his or her term expires and until his or her successor has been elected and qualified, subject, however, to such director’s earlier death, resignation, retirement, disqualification or removal. | Sonder’s bylaws provide that the number of directors of directors shall be determined from time to time by a resolution of the board of directors of Sonder. | The Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws provide that the number of directors that constitutes the board of directors will be fixed solely by resolution adopted by a majority of the board of directors. The Amended and Restated Certificate of Incorporation provides for a classified board of directors consisting of three classes of approximately equal size, each serving staggered three-year terms. Only the directors in one class will be subject to election by a plurality of the votes cast at each annual meeting of stockholders, with the directors in the other classes continuing for the remainder of their respective three-year terms. | |||
Election of Directors | Subject to the special rights of the holders of any series of Preferred Stock to elect directors, | The holders of record of Preferred Stock and Special Voting Investor Series Stock, voting | Subject to the rights of holders of any series of Preferred Stock with respect to the election of |
Company |
Sonder |
Post-Combination Company | ||||
the Company’s current bylaws require that the election of directors shall be determined by a plurality of the votes cast by the stockholders present in person or represented by proxy at the meeting and entitled to vote thereon. Pursuant to the Current Company Certificate, prior to the closing of the initial business combination, the holders of Class F Stock, voting together as a single class, have the exclusive right to elect any director. | together as a single class, are entitled to elect 3 directors and the holders of record of Common Stock and Special Voting Series AA Stock are entitled to elect 4 directors of the Sonder board of directors. | directors, the Amended and Restated Bylaws require that the election of directors shall be determined by a plurality of the votes cast by the stockholders present in person or represented by proxy at the meeting and entitled to vote thereon. | ||||
Manner of Acting by Board | The Company’s current bylaws provide that a majority of the Board shall constitute a quorum for the transaction of business at any meeting of the Board, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board, except as may be otherwise specifically provided by applicable law, the Current Company Certificate or the Company’s current bylaws. | At all meetings of the Sonder board of directors, a majority of the total authorized number of directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Sonder board of directors, then the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present. The vote of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Sonder board of directors, except as may be otherwise specifically provided by statute, the certificate of incorporation or the bylaws. | At all meetings of the board of directors, a majority of the board of directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the board of directors, then the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present. The affirmative vote of a majority of the directors present at any meeting at which a quorum is present shall be the act of the board of directors. |
Company |
Sonder |
Post-Combination Company | ||||
Removal of Directors | The Current Company Certificate provides that, subject to the special rights of the holders of any series of Preferred Stock to elect directors, any or all of the directors may be removed from office at any time, but only for cause and only by the affirmative vote of holders of a majority of the voting power of all then outstanding shares of capital stock of the Company entitled to vote generally in the election of directors, voting together as a single class. The Current Company Certificate further provides that, prior to the closing of the initial business combination, the holders of Class F Stock, voting together as a single class, have the exclusive right to remove any director. | Any director elected as provided above may be removed without cause by, and only by, the classes entitled to elect such director, given either at a special meeting of such stockholders duly called for that purpose or pursuant to a written consent of stockholders. | Any director may be removed from office by the stockholders of the Post-Combination Company only for cause. | |||
Vacancies on Board | The Current Company Certificate provides that, subject to the special rights of the holders of any series of Preferred Stock to elect directors, if any, newly created directorships resulting from an increase in the number of directors and any vacancies on the Board resulting from death, resignation, retirement, disqualification, removal or other cause may be filled solely and exclusively by a majority vote of the remaining directors then in office, even if less than a | A vacancy or other unfilled seat in any directorship filled by the holders of any classes or series shall be filled only by the vote or written consent in lieu of a meeting of the holders of such classes or series of capital stock or by any remaining director or directors elected by the holders of such class or series. | Subject to the rights of the holders of any series of Preferred Stock to elect directors and fill vacancies under specified circumstances, and as permitted in the specific case by resolution of the board of directors, vacancies occurring on the board of directors for any reason and newly created directorships resulting from an increase in the authorized number of directors may be filled only by vote of a majority of the directors then in office (which may include one or more |
Company |
Sonder |
Post-Combination Company | ||||
quorum, or by a sole remaining director (and not by stockholders). | directors who are resigning effective at a future date), although less than a quorum, or by a sole remaining director, and not by stockholders. | |||||
Business Proposals by Stockholders | The Company’s current bylaws provide that no business may be transacted at an annual meeting of stockholders, other than business that is either (i) specified in the Company’s notice of meeting (or any supplement thereto) given by or at the direction of the Board, (ii) otherwise properly brought before the annual meeting by or at the direction of the Board or (iii) otherwise properly brought before the annual meeting by any stockholder of the Corporation (a) who is a stockholder of record entitled to vote at such annual meeting and (b) whose notice is timely. To be timely, a stockholder’s notice to the Company with respect to such business must be received not later than the close of business on the 90th day nor earlier than the close of business on the 120th day before the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the annual meeting is more than | Not applicable. | The Amended and Restated Bylaws provide that no business may be transacted at an annual meeting of stockholders, other than business that is either (i) specified in the Post-Combination Company’s notice of meeting (or any supplement thereto) given by or at the direction of the board of directors, the chairperson of the board of directors, the chief executive officer or the president, (ii) otherwise properly brought before the annual meeting by or at the direction of the board of directors or (iii) otherwise properly brought before the annual meeting by any stockholder of the Post-Combination Company (a) who is a stockholder of record entitled to vote at such annual meeting and (b) whose notice is timely. To be timely, a stockholder’s notice to the Post-Combination Company with respect to such business must be received no earlier than 8:00 a.m, local time, on the 120th day and no later than 5:00 p.m., local time, on the 90th day before the anniversary date of the |
Company |
Sonder |
Post-Combination Company | ||||
30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 120th day before the meeting and not later than the later of (x) the close of business on the 90th day before the meeting and (y) the close of business on the 10th day following the day on which public announcement of the date of the annual meeting is first made by the Company. | immediately preceding annual meeting of stockholders; provided, however, that if no annual meeting of stockholders was held in the preceding year or in the event that the annual meeting is changed more than 25 days from the anniversary date, notice by the stockholder to be timely must be so delivered not earlier than 8:00 a.m., local time, on the 120th day before the meeting and not later than 5:00 p.m., local time, on the 10th day following the day on which public announcement of the date of the annual meeting is first made by the Post-Combination Company. | |||||
Special Meetings of the Board | The Company’s current bylaws provide that special meetings of the Board (a) may be called by the Chairman of the Board or President and (b) shall be called by the chairman of the Board, president or secretary on the written request of at least a majority of directors then in office, or the sole director, as the case may be, and shall be held at such time, date and place (within or without the State of Delaware) as may be determined by the person calling the meeting or, if called upon the request of directors or the sole director, as specified in such written request. | Special meetings of the board of directors of Sonder for any purpose or purposes may be called at any time by the Chairperson of the board of directors of Sonder, the Chief Executive Officer, the President, the Secretary or any two directors. | Special meetings of the board of directors for any purpose or purposes may be called at any time by the chairperson of the board of directors, the chief executive officer, the president, the secretary or a majority of the board of directors. |
Company |
Sonder |
Post-Combination Company | ||||
Notice of Stockholder Meetings | The Company’s current bylaws provide that written notice of each stockholders meeting stating the place, if any, date, and time of the meeting, and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, and the record date for determining the stockholders entitled to vote at the meeting, if such date is different from the record date for determining stockholders entitled to notice of the meeting, shall be given in the permitted manners set forth in the Company’s current bylaws to each stockholder entitled to vote thereat as of the record date for determining the stockholders entitled to notice of the meeting, by the Company not less than 10 nor more than 60 days before the date of the meeting unless otherwise required by the DGCL. If said notice is for a stockholders meeting other than an annual meeting, it shall in addition state the purpose or purposes for which the meeting is called, and the business transacted at such meeting shall be limited to the matters so stated in the Company’s notice of meeting (or any supplement thereto). | Whenever stockholders are required or permitted to take any action at a meeting, a notice of the meeting in the form of a writing or electronic transmission will be given which will state the place, if any, date and hour of the meeting, the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, the record date for determining the stockholders entitled to vote at the meeting, if such date is different from the record date for determining stockholders entitled to notice of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Except as otherwise provided in the DGCL, the certificate of incorporation or the bylaws, the notice of any meeting of stockholders shall be given not less than 10 nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting as of the record date for determining the stockholders entitled to notice of the meeting. | Whenever stockholders are required or permitted to take any action at a meeting, a notice of the meeting shall be given which shall state the place, if any, date and hour of the meeting, the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, the record date for determining the stockholders entitled to vote at the meeting, if such date is different from the record date for determining stockholders entitled to notice of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Except as otherwise provided in the DGCL, the certificate of incorporation or these bylaws, the notice of any meeting of stockholders shall be given not less than 10 nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting as of the record date for determining the stockholders entitled to notice of the meeting. |
Company |
Sonder |
Post-Combination Company | ||||
Special Meetings of Stockholders | The Company’s current bylaws provide that, subject to the rights of the holders of any outstanding series of the Preferred Stock and to the requirement of applicable law, special meetings of stockholders, for any purpose or purposes, may be called only by the chairman of the Board, the chief executive officer, or the Board pursuant to a resolution adopted by a majority of the Board, and may not be called by any other person. | A special meeting of the stockholders may be called at any time by the board of directors of Sonder, Chairperson of the Board, Chief Executive Officer or President (in the absence of a Chief Executive Officer). | The Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws provide that special meetings of stockholders may be called only by a majority of the board of directors, the chair of the board of directors, the Chief Executive Officer or the President of the Post-Combination Company. | |||
Manner of Acting by Stockholders | The Company’s current bylaws provide that at all meetings of stockholders all matters other than the election of directors presented to the stockholders at a meeting at which a quorum is present shall be determined by the vote of a majority of the votes cast by the stockholders present in person or represented by proxy at the meeting and entitled to vote thereon, unless the matter is one upon which, by applicable law, the Current Company Certificate, the Company’s bylaws or applicable stock exchange rules, a different vote is required, in which case such provision shall govern and control the decision of such matter. | The bylaws of Sonder provide that at all meetings of stockholders all matters other than the election of directors presented to the stockholders at a meeting at which a quorum is present shall be determined by the vote of a majority of the voting power of the shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter. | The Amended and Restated Bylaws provide that for all matters other than the election of directors presented to the stockholders at a meeting at which a quorum is present shall be determined by the vote of a majority of the votes cast by the stockholders present in person or represented by proxy at the meeting and entitled to vote thereon, unless the matter is one upon which, by applicable law, the Amended and Restated Certificate of Incorporation, the Amended and Restated Bylaws or applicable stock exchange rules, a different vote is provided for, in which case such provision shall govern and control the decision of such matter. |
Company |
Sonder |
Post-Combination Company | ||||
Stockholder Action Without Meeting | The Current Company Certificate provides that, except as may be otherwise provided for or fixed relating to the rights of the holders of any outstanding series of Preferred Stock, subsequent to the consummation of the Company IPO, any action required or permitted to be taken by the stockholders of the Company must be effected by a duly called annual or special meeting of such stockholders and may not be effected by written consent of the stockholders. | Stockholders may act by written consent. | The Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws provide that the stockholders may not take action by written consent and may only take action at a duly called annual or special meetings of the stockholders. | |||
Quorum for Stockholder Meetings | Except as otherwise provided by applicable law, the Current Company Certificate, or the Company’s current bylaws, the presence, in person or by proxy, at a stockholders meeting of the holders of shares of outstanding capital stock of the Company representing a majority of the voting power of all outstanding shares of capital stock of the Company entitled to vote at such meeting shall constitute a quorum for the transaction of business at such meeting, except that when specified business is to be voted on by a class or series of stock voting as a class, the holders of shares representing a majority of the voting | Except as otherwise provided by law, the certificate of incorporation or the bylaws, at each meeting of stockholders the presence in person or by proxy of the holders of shares of stock having a majority of the votes which could be cast by the holders of all outstanding shares of stock entitled to vote at the meeting shall be necessary and sufficient to constitute a quorum. Where a separate vote by a class or series or classes or series is required, a majority of the outstanding shares of such class or series or classes or series, present in person or represented by proxy, shall constitute a quorum entitled to take action with respect to | The holders of a majority of the voting power of the capital stock of the Post-Combination Company issued and outstanding and entitled to vote, present in person or represented by proxy, shall constitute a quorum for the transaction of business at all meetings of the stockholders. Where a separate vote by a class or series or classes or series is required, a majority of the voting power of the outstanding shares of such class or series or classes or series, present in person or represented by proxy, shall constitute a quorum entitled to take action with respect to that vote on that matter, except as otherwise provided by law, the |
Company |
Sonder |
Post-Combination Company | ||||
power of the outstanding shares of such class or series shall constitute a quorum of such class or series for the transaction of such business. | that vote on that matter, except as otherwise provided by law, the certificate of incorporation or the bylaws. | Amended and Restated Certificate of Incorporation or the Amended and Restated Bylaws. | ||||
Anti-Takeover Provisions | The Current Company limits the ability of stockholders to transact business outside of stockholder meetings. Additionally, section 203 of the DGCL generally prohibits any “business combination,” including mergers, sales and leases of assets, issuances of securities and similar transactions, by a corporation or any of its direct or indirect majority-owned subsidiaries with an “interested stockholder” who beneficially owns 15% or more of a corporation’s voting stock, within three years after the person or entity becomes an interested stockholder, unless: (i) the transaction that will cause the person or entity to become an interested stockholder under Section 203 is approved by the Board; (ii) after the completion of the transaction in which the person or entity becomes an interested stockholder, the interested stockholder holds at least 85% of the voting stock of the Company outstanding at the time the transaction commenced but not including shares held by | Not applicable. | The Post-Combination Company limits the ability of stockholders to transact business outside of stockholder meetings. Additionally, section 203 of the DGCL generally prohibits any “business combination,” including mergers, sales and leases of assets, issuances of securities and similar transactions, by a corporation or any of its direct or indirect majority-owned subsidiaries with an “interested stockholder” who beneficially owns 15% or more of a corporation’s voting stock, within three years after the person or entity becomes an interested stockholder, unless: (i) the transaction that will cause the person or entity to become an interested stockholder under Section 203 is approved by the Board; (ii) after the completion of the transaction in which the person or entity becomes an interested stockholder, the interested stockholder holds at least 85% of the voting stock of the Post-Combination Company outstanding at the time the transaction commenced but not including shares held by |
Company |
Sonder |
Post-Combination Company | ||||
persons who are directors and also officers and shares held by specified employee benefit plans; or (iii) after the person or entity becomes an interested stockholder, the business combination is approved by the Board and the holders of at least two-thirds of the Company’s outstanding voting stock, excluding shares held by the interested stockholder. |
persons who are directors and also officers and shares held by specified employee benefit plans; or (iii) after the person or entity becomes an interested stockholder, the business combination is approved by board of directors and the holders of at least two-thirds of the Post-Combination Company’s outstanding voting stock, excluding shares held by the interested stockholder. | |||||
Exclusive Forum Provisions | The Current Company Certificate provides that, unless the Company consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (the Court of Chancery |
Sonder’s bylaws provide that, unless otherwise consented to by Sonder in writing, the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, another State court in Delaware or the federal district court for the District of Delaware) shall, to the fullest extent permitted by law be the sole and exclusive forum for the following types of actions or proceedings: (a) any derivative action or proceeding brought on behalf of the Sonder, (b) any action asserting a claim of breach of a fiduciary duty owed by any director, stockholder, officer or other employee of Sonder to Sonder or Sonder’s stockholders, (c) any action arising pursuant to any provision of the DGCL or the certificate of | The Amended and Restated Bylaws provide that, unless otherwise consented to by the Post-Combination Company in writing, the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, another State court in Delaware or the federal district court for the District of Delaware) shall, to the fullest extent permitted by law be the sole and exclusive forum for the following types of actions or proceedings: (i) any derivative action or proceeding brought on behalf of the Post-Combination Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, stockholder, officer or other employee of the Post-Combination Company to the Post-Combination Company |
Company |
Sonder |
Post-Combination Company | ||||
(iv) any action asserting a claim against the Company, its directors, officers or employees governed by the internal affairs doctrine and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel, except for, as to each of (i) through (iv) above, any claim as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, for which the Court of Chancery does not have subject matter jurisdiction, or any action arising under the Securities Act as to which the Court of Chancery and the federal district court for the District of Delaware shall have concurrent jurisdiction. Notwithstanding the foregoing, the provisions of the exclusive forum provision in the Current Company Certificate will not apply to suits | incorporation or the bylaws (as either may be amended from time to time), and (d) any action asserting a claim governed by the internal affairs doctrine, except for, as to each of (a) through (d) above, any claim as to which such court determines that there is an indispensable party not subject to the jurisdiction of such court (and the indispensable party does not consent to the personal jurisdiction of such court within 10 days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than such court, or for which such court does not have subject matter jurisdiction. Any person or entity purchasing or otherwise acquiring any interest in any security of Sonder shall be deemed to have notice of and consented to these provisions. The enforceability of similar exclusive forum provisions in other companies’ organizational documents has been challenged in legal proceedings and it is possible that a court of law could rule that these types of provisions are inapplicable or unenforceable if they are challenged in a proceeding or otherwise. | or the Post-Combination Company’s stockholders, (iii) any action arising pursuant to any provision of the DGCL or the Amended and Restated Certificate of Incorporation or the Amended and Restated Bylaws (as either may be amended from time to time) or (iv) any action asserting a claim governed by the internal affairs doctrine, except for, as to each of (i) through (iv) above, any claim as to which such court determines that there is an indispensable party not subject to the jurisdiction of such court (and the indispensable party does not consent to the personal jurisdiction of such court within 10 days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than such court or for which such court does not have subject matter jurisdiction. This provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the U.S. federal courts have exclusive jurisdiction. The Amended and Restated Bylaws further provide that, unless otherwise consented to by the Post-Combination Company in writing, the federal district courts of |
Company |
Sonder |
Post-Combination Company | ||||
brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. | the United States will be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. Any person or entity purchasing or otherwise acquiring any interest in the Post-Combination Company’s securities shall be deemed to have notice of and consented to this provision. | |||||
This exclusive forum provision will not apply to claims under the Exchange Act, but will apply to other state and federal law claims including actions arising under the Securities Act. Section 22 of the Securities Act, however, creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Accordingly, there is uncertainty as to whether a court would enforce such a forum selection provision as written in connection with claims arising under the Securities Act, and investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. | Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Accordingly, there is uncertainty as to whether a court would enforce such a forum selection provision as written in connection with claims arising under the Securities Act, and investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. | |||||
Indemnification of Directors and Officers | The Current Company Certificate provides that, to the fullest extent permitted by applicable | Sonder’s bylaws provide that, to the fullest extent permitted by the DGCL, Sonder shall indemnify | The Amended and Restated Bylaws provide that, to the fullest extent permitted by the DGCL, |
Company |
Sonder |
Post-Combination Company | ||||
law, the Company shall indemnify and hold harmless each person who is or was made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative by reason of the fact that he or she is or was a director or officer of the Company or, while a director or officer of the Company, is or was serving at the request of the Company as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, other enterprise or nonprofit entity, including service with respect to an employee benefit plan, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent, or in any other capacity while serving as a director, officer, employee or agent, against all liability and loss suffered and expenses. | any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of Sonder) by reason of the fact that such person is or was a director or officer of Sonder, or is or was a director or officer of Sonder serving at the request of Sonder as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of Sonder, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. Sonder has entered into separate indemnification agreements with its directors and officers. These agreements, | the Post-Combination Company shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative by reason of the fact that such person is or was a director or officer of the Post-Combination Company, or is or was a director or officer of the Post-Combination Company serving at the request of the Post-Combination Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, other enterprise or nonprofit entity, against (as applicable) expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Post-Combination Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s |
Company |
Sonder |
Post-Combination Company | ||||
among other things, require Sonder to indemnify its directors and officers for certain expenses, including attorneys’ fees, judgments, fines, and settlement amounts incurred by a director or officer in any action or proceeding arising out of their services as one of Sonder’s directors or officers or any other company or enterprise to which the person provides services at Sonder’s request. | conduct was unlawful. The Post-Combination Company will enter into separate indemnification agreements with the Post-Combination Company’s directors and officers. These agreements, among other things, require the Post-Combination Company to indemnify its directors and officers for certain expenses, including attorneys’ fees, judgments, fines, and settlement amounts incurred by a director or officer in any action or proceeding arising out of their services as one of the Post-Combination Company’s directors or officers or any other company or enterprise to which the person provides services at the Post-Combination Company’s request. | |||||
Limitation on Liability of Directors | The Current Company Certificate provides that a director of the Company shall not be personally liable to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL as the same exists or may hereafter be amended unless they violated their duty of loyalty to the Company or its stockholders, acted in bad faith, knowingly or intentionally violated | Sonder’s certificate of incorporation limits Sonder’s directors’ liability to the fullest extent permitted under the DGCL. The DGCL provides that directors of a corporation will not be personally liable for monetary damages for breach of their fiduciary duties as directors, except for liability in certain circumstances for which the DGCL does not permit such exculpation. | The Amended and Restated Certificate of Incorporation which will be effective upon consummation of the Business Combination limits the Post-Combination Company’s directors’ liability to the fullest extent permitted under the DGCL. The DGCL provides that directors of a corporation will not be personally liable for monetary damages for breach of their fiduciary duties as directors, except for liability in certain circumstances for which the DGCL does not permit such exculpation. |
Company |
Sonder |
Post-Combination Company | ||||
the law, authorized unlawful payments of dividends, unlawful stock purchases or unlawful redemptions, or derived improper personal benefit from their actions as directors. | ||||||
Corporate Opportunity | The Current Company Certificate provides that the doctrine of corporate opportunity, or any other analogous doctrine, shall not apply with respect to the Company or any of its officers or directors or any of their respective affiliates, in circumstances where the application of any such doctrine would conflict with any fiduciary duties or contractual obligations they may have. In addition to the foregoing, the doctrine of corporate opportunity shall not apply to any other corporate opportunity with respect to any of the directors or officers of the Company unless such corporate opportunity is offered to such person solely in his or her capacity as a director or officer of the Company and such opportunity is one the Company is legally and contractually permitted to undertake and would otherwise be reasonable for the Company to pursue. | Sonder renounces, to the fullest extent permitted by law, any interest or expectancy of Sonder in, or in being offered an opportunity of (i) any non-employee director of Sonder or (ii) any holder of Sonder Preferred Stock or affiliate or agent of any such holder, other than someone who is a Sonder employee, unless such opportunity is offered to such person expressly and solely in such person’s capacity as Sonder director. |
Not applicable. | |||
Amendments to Charter | The Current Company Certificate provides that the Company reserves the right at any time and from time to time to | The Sonder Charter may be adopted, amended or repealed by the board of directors and the stockholders entitled to | Amendments to certain provisions in the Amended and Restated Certificate of Incorporation will |
Company |
Sonder |
Post-Combination Company | ||||
amend, alter, change or repeal any provision of the Current Company Certificate as authorized by the laws of the State of Delaware. Under the DGCL, an amendment to a corporation’s certificate of incorporation generally requires the approval of the board of directors and a majority of the combined voting power of the then-outstanding shares of voting stock, voting together as a single class, subject to certain higher thresholds for amendments to provisions related to the Company’s status as a blank check company. | vote, with certain votes of stockholders required for certain types of charter amendments. | require a resolution adopted by a majority of the Post-Combination Company Board and holders of at least two-thirds of the voting power of the Post-Combination Company’s then outstanding voting securities. Under the DGCL, an amendment to a corporation’s certificate of incorporation generally requires the approval of the board of directors and a majority of the combined voting power of the then-outstanding shares of voting stock, voting together as a single class. | ||||
Amendments to Bylaws | The Company’s current bylaws provide that the Board shall have the power to adopt, amend, alter or repeal the bylaws. The affirmative vote of a majority of the Board shall be required to adopt, amend, alter or repeal the bylaws. The Company’s bylaws also may be adopted, amended, altered or repealed by the stockholders; provided, however, that in addition to any vote of the holders of any class or series of capital stock of the Company required by applicable law or the Current Company Certificate, the affirmative vote of the holders of at least a majority of the voting (except as otherwise | The Sonder Charter provides that the Board is authorized to make, alter, amend or repeal Sonder’s bylaws. The bylaws may also be adopted, amended or repealed by the stockholders entitled to vote. | The Amended and Restated Certificate of Incorporation of the Post-Combination Company provides that the board of directors is authorized to adopt, amend or repeal the Amended and Restated Bylaws. The Amended and Restated Certificate of Incorporation of the Post-Combination Company further provides that the Amended and Restated Bylaws may also be adopted, amended, altered or repealed by the stockholders of the Post-Combination Company. Amendment to certain provisions in the Amended and Restated Bylaws will require approval by holders of at least two-thirds of the |
Company |
Sonder |
Post-Combination Company | ||||
provided in relevant sections of the Company’s bylaws) power of all outstanding shares of capital stock of the Company entitled to vote generally in the election of directors, voting together as a single class, shall be required for the stockholders to adopt, amend, alter or repeal the Company’s bylaws. | voting power of the Post-Combination Company’s then outstanding voting securities. | |||||
Liquidation | The Current Company Certificate provides that, subject to applicable law, the rights, if any, of the holders of any outstanding series of the Preferred Stock and certain provisions of the Current Company Certificate, in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, after payment or provision for payment of the debts and other liabilities of the Company, the holders of shares of Common Stock shall be entitled to receive all the remaining assets of the Company available for distribution to its stockholders, ratably in proportion to the number of shares of Class A Stock (on an as-converted basis with respect to the Class F Stock) held by them. |
In the event of any voluntary or involuntary liquidation, dissolution or winding up of Sonder, the holders of shares of Preferred Stock then outstanding shall be entitled to be paid out of the assets of Sonder available for distribution to its stockholders before any payment shall be made to the holders of Common Stock by reason of their ownership thereof. The holders of the Special Voting Common Stock shall not be entitled to receive any distribution of assets of in such event. | If the Post-Combination Company becomes subject to a liquidation, dissolution, or winding-up, the assets legally available for distribution to the Post-Combination Company’s stockholders would be distributable ratably among the holders of Common Stock and any participating series of Preferred Stock outstanding at that time, subject to prior satisfaction of all outstanding debt and liabilities and the preferential rights of and the payment of liquidation preferences, if any, on any outstanding shares of Preferred Stock. The holders of the Special Voting Common Stock shall not be entitled to receive any distribution of assets of the Post-Combination Company in such event. | |||
Redemption Rights | The Current Company Certificate provides that, prior to the consummation of the | Sonder will automatically redeem, on the date on which any Sonder Canada | The Post-Combination Company will automatically redeem, on the date on which any |
Company |
Sonder |
Post-Combination Company | ||||
initial Business Combination, the Company shall provide all holders of Public Shares with the opportunity to have their Public Shares redeemed upon the consummation of an initial business combination pursuant to, and subject to certain limitations set forth in, the Current Company Certificate for cash equal to the applicable redemption price per share; provided, however, that the Corporation shall not redeem or repurchase Public Shares to the extent that such redemption would result in the Company’s failure to have net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) in excess of $5 million or any greater net tangible asset or cash requirement which may be contained in the agreement relating to an initial business combination. |
Exchangeable Shares held by a holder are redeemed, exchanged or otherwise transferred for Common Stock or Preferred Stock (as applicable) pursuant to the Sonder Canada Articles or the Exchange Rights Agreement, such number of shares of Special Voting Stock held by such holder corresponding to the number of Sonder Canada Exchangeable Shares then redeemed, exchanged or otherwise transferred (the Redeemed Shares |
Sonder Canada Exchangeable Shares held by a holder are redeemed, exchanged or otherwise transferred for Common Stock pursuant to the Sonder Canada Articles or the Exchange Rights Agreement, such number of shares of Special Voting Common Stock held by such holder corresponding to the number of Sonder Canada Exchangeable Shares then redeemed, exchanged or otherwise transferred (the Redeemed Shares |
Name of Stockholder (1) |
No. of Shares (Series C) |
Aggregate Purchase Price ($) |
||||||
Entities affiliated with Greenoaks Capital* (2) |
3,971,249 | $ | 20,000,004 | |||||
Entities affiliated with Spark Capital* (3) |
1,489,219 | $ | 7,500,005 | |||||
Valor Sonder Holdings, LLC (4) |
794,250 | $ | 4,000,002 |
* | Owners of more than 5% of Sonder capital stock. |
(1) | Additional details regarding the stockholder included in this table and their equity holdings are provided in this proxy statement/prospectus/consent solicitation statement under the section “Beneficial Ownership of Securities”. |
(2) | Entities affiliated with Greenoaks Capital, including Greenoaks Capital Opportunities Fund L.P. and Greenoaks Capital MS LP—Vauxhall Series, collectively, beneficially own more than five percent of Sonder’s outstanding shares. |
(3) | Entities affiliated with Spark Capital, including Spark Capital IV, L.P.and Spark Capital Founders’ Fund IV, L.P., collectively, beneficially own more than five percent of Sonder’s outstanding shares. Mr. Hyatt, a member of Sonder’s board of directors, serves as a General Partner at Spark Capital. |
(4) | Mr. Pattipati, a member of Sonder’s board of directors, serves as a Partner at Valor Management LLC, an affiliate of Valor Sonder Holdings, LLC. Mr. Pattipati is not expected to be a member of the post-closing board. |
Name of Stockholder (1) |
No. of Shares (Series D) |
Aggregate Purchase Price ($) |
||||||
Valor Sonder Holdings, LLC* (2) |
4,763,724 | $ | 49,999,999 | |||||
Entities affiliated with WestCap* (3) |
6,383,388 | $ | 66,999,976 | |||||
Entities affiliated with Fidelity* (4) |
2,858,234 | $ | 29,999,996 | |||||
Entities affiliated with iNovia Capital* (5) |
1,429,117 | $ | 14,999,998 | |||||
Greenoaks Capital MS LP – Hovick Tunnel Series* |
952,744 | $ | 9,999,992 | |||||
Frits Dirk van Paasschen^ |
47,637 | $ | 499,997 |
* | Owners of more than 5% of Sonder capital stock. |
^ | Member of Sonder’s Board. |
(1) | Additional details regarding the stockholder included in this table and their equity holdings are provided in this proxy statement/prospectus/consent solicitation statement under the section “ Beneficial Ownership of Securities. |
(2) | Mr. Pattipati, a member of Sonder’s board of directors, serves as a Partner at Valor Management LLC, an affiliate of Valor Sonder Holdings, LLC. Mr. Pattipati is not expected to be a member of the Post-Combination Company Board. |
(3) | Entities affiliated with WestCap, including WestCap SNDR, LLC and SNDR Strategic Investments 2019, LLC, collectively, beneficially own more than five percent of Sonder’s outstanding shares. |
(4) | Entities affiliated with Fidelity, including Fidelity Mt. Vernon Street Trust: Fidelity Series Growth Company Fund, Fidelity Growth Company Commingled Pool, Fidelity Mt. Vernon Street Trust: Fidelity Growth Company Fund, Fidelity Securities Fund: Fidelity Blue Chip Growth Fund, Fidelity Blue Chip Growth Commingled Pool, FIAM Target Date Blue Chip Growth Commingled Pool, Fidelity Securities Fund: Fidelity Blue Chip Growth K6 Fund, Fidelity Blue Chip Growth Institutional Trust, Fidelity Securities Fund: Fidelity Flex Large Cap Growth Fund, Variable Insurance Products Fund III: Growth Opportunities Portfolio, Fidelity Advisor Series I: Fidelity Advisor Growth Opportunities Fund, and Fidelity Advisor Series I: Fidelity Advisor Series Growth Opportunities Fund, collectively, beneficially own more than five percent of Sonder’s outstanding shares. |
(5) | Entities affiliated with iNovia, including iNovia Growth Fund, L.P. and iNovia Growth Fund-A, L.P., collectively, beneficially own more than five percent of Sonder’s outstanding shares. |
Name of Stockholder (1) |
No. of Shares (Series E) |
Aggregate Purchase Price ($) |
||||||
Entities affiliated with iNovia Capital* (2) |
4,179,474 | $ | 44,999,979 | |||||
Entities affiliated with Fidelity* (3) |
4,643,862 | $ | 49,999,999 | |||||
Entities affiliated with WestCap* (4) |
4,179,476 | $ | 45,000,000 | |||||
Valor Sonder Holdings, LLC* (5) |
928,772 | $ | 9,999,995 | |||||
Entities affiliated with Spark Capital* (6) |
46,438 | $ | 499,993 | |||||
Greenoaks Capital Opportunities Fund, L.P.* |
464,386 | $ | 4,999,998 |
* |
Together with its affiliated entities own more than 5% of Sonder capital stock. |
(1) | Additional details regarding the stockholders included in this table and their equity holdings are provided in this proxy statement/prospectus/consent solicitation statement under the section titled “ Beneficial Ownership of Securities . |
(2) | Entities affiliated with iNovia, including iNovia Growth Fund, L.P., iNovia Growth Fund-A, L.P. and iNovia Growth SPV—Quebec, L.P., collectively, beneficially own more than five percent of Sonder’s outstanding shares. |
(3) | Entities affiliated with Fidelity, including Fidelity Mt. Vernon Street Trust: Fidelity Series Growth Company Fund, Fidelity Mt. Vernon Street Trust: Fidelity Growth Company Fund, Fidelity Growth Company Commingled Pool, Fidelity Mt. Vernon Street Trust : Fidelity Growth Company K6 Fund, Variable Insurance Products Fund III: Growth Opportunities Portfolio, Fidelity Advisor Series I: Fidelity Advisor Growth Opportunities Fund and Fidelity Advisor Series I: Fidelity Advisor Series Growth Opportunities Fund, collectively, beneficially own more than five percent of Sonder’s outstanding shares. |
(4) | Entities affiliated with WestCap, including WestCap Sonder 2020-A, LLC, beneficially own more than five percent of Sonder’s outstanding shares. |
(5) | Mr. Pattipati, a member of Sonder’s board of directors, serves as a Partner at Valor Management LLC, an affiliate of Valor Sonder Holdings, LLC. Mr. Pattipati is not expected to be a member of the Post-Combination Company Board. |
(6) | Entities affiliated with Spark Capital, including Spark Capital IV, L.P.and Spark Capital Founders’ Fund IV, L.P., collectively, beneficially own more than five percent of Sonder’s outstanding shares. Mr. Hyatt, a member of Sonder’s board of directors, serves as a General Partner at Spark Capital. |
Name of Stockholder (1) |
Note Principal Amount ($) |
|||
Entities affiliated with Fidelity* (2) |
$ | 25,000,000 | ||
Westcap Sonder Convert Co-Invest 2021, LLC* |
$ | 10,750,000 |
* | Together with its affiliated entities own more than 5% of Sonder capital stock. |
(1) | Additional details regarding the stockholders included in this table and their equity holdings are provided in this proxy statement/prospectus/consent solicitation statement under the section titled “ Beneficial Ownership of Securities |
(2) | Entities affiliated with Fidelity, including Fidelity Mt. Vernon Street Trust: Fidelity Series Growth Company Fund, Fidelity Mt. Vernon Street Trust: Fidelity Growth Company Fund, Fidelity Growth Company Commingled Pool, Fidelity Mt. Vernon Street Trust: Fidelity Growth Company K6 Fund, Fidelity Securities Fund: Fidelity Blue Chip Growth Fund, Fidelity Blue Chip Growth Commingled Pool, Fidelity Securities Fund: Fidelity Flex Large Cap Growth Fund, Fidelity Securities Fund: Fidelity Blue Chip Growth K6 Fund, Fidelity Blue Chip Growth Institutional Trust and FIAM Target Date Blue Chip Growth Commingled Pool, collectively, beneficially own more than five percent of Sonder’s outstanding shares. |
• | whether the transaction is fair to the Post-Combination Company and on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances; |
• | the extent of the related person’s interest in the transaction; |
• | whether there are business reasons for the Post-Combination Company to enter into the transaction; |
• | whether the transaction would impair the independence of a non-employee director; and |
• | whether the transaction would present an improper conflict of interest for any director or executive officer. |
• | each person who is, or is expected to be, the beneficial owner of more than 5% of outstanding shares of Post-Combination Company Stock; |
• | each of our named executive officers and directors; |
• | each person who will become a named executive officer or director of the Post-Combination Company; and |
• | all executive officers and directors of the Post-Combination Company as a group. |
After the Business Combination (1) |
||||||||||||||||||||||||
Before the Business Combination ** (1)(2) |
Assuming No Redemption |
Assuming Maximum Redemption Shares of Class A Stock † |
||||||||||||||||||||||
Name and Address of Beneficial Owners |
Number of Shares |
% |
Number of Shares |
% |
Number of Shares |
% |
||||||||||||||||||
Directors and Named Executive Officers of the Company |
||||||||||||||||||||||||
Gores Metropoulos Sponsor II, LLC (3) |
11,175,000 | 19.9 | % | 15,175,000 | 5.2 | % | 15,175,000 | 5.4 | % | |||||||||||||||
Dean Metropoulos |
— | * | — | * | — | * | ||||||||||||||||||
Alec Gores (3) |
11,175,000 | 19.9 | % | 15,175,000 | 5.2 | % | 15,175,000 | 5.4 | % | |||||||||||||||
Andrew McBride |
— | * | — | * | — | * | ||||||||||||||||||
Randall Bort |
25,000 | * | 25,000 | * | 25,000 | * | ||||||||||||||||||
Michael Cramer |
25,000 | * | 25,000 | * | 25,000 | * | ||||||||||||||||||
Joseph Gatto |
25,000 | * | 25,000 | * | 25,000 | * | ||||||||||||||||||
All directors and executive officers as a group (6 individuals) |
11,250,000 |
20.0 |
% |
15,250,000 |
5.2 |
% |
15,250,000 |
5.5 |
% | |||||||||||||||
Five Percent Holders |
||||||||||||||||||||||||
Entities affiliated with Fidelity (4) |
— | * | 18,553,210 | 6.3 | % | 18,553,210 | 6.7 | % | ||||||||||||||||
Entities affiliated with Greenoaks (5) |
— | * | 18,252,877 | 6.2 | % | 18,252,877 | 6.5 | % | ||||||||||||||||
Entities affiliated with Westcap (6) |
— | * | 16,954,914 | 5.8 | % | 16,954,914 | 6.1 | % | ||||||||||||||||
Entities affiliated with Spark Capital (7) |
— | * | 16,891,444 | 5.7 | % | 16,891,444 | 6.1 | % | ||||||||||||||||
Citadel GP LLC (8) |
3,253,288 | 7.2 | % | 3,253,288 | 1.1 | % | 3,253,288 | 1.2 | % |
After the Business Combination (1) |
||||||||||||||||||||||||
Before the Business Combination ** (1)(2) |
Assuming No Redemption |
Assuming Maximum Redemption Shares of Class A Stock † |
||||||||||||||||||||||
Name and Address of Beneficial Owners |
Number of Shares |
% |
Number of Shares |
% |
Number of Shares |
% |
||||||||||||||||||
Directors and Named Executive Officers of the Post-Combination Company After Consummation of the Business Combination |
||||||||||||||||||||||||
Francis Davidson (9)(10) |
— | * | 13,292,989 | 4.5 | % | 13,292,989 | 4.8 | % | ||||||||||||||||
Sanjay Banker (9)(11) |
— | * | 1,477,411 | * | 1,477,411 | * | ||||||||||||||||||
Satyen Pandya (9)(12) |
— | * | 13,957 | * | 13,957 | * | ||||||||||||||||||
Manon Brouillette (9)(13) |
— | * | 70,417 | * | 70,417 | * | ||||||||||||||||||
Nabeel Hyatt 7) |
— | * | 16,891,444 | 5.7 | % | 16,891,444 | 6.1 | % | ||||||||||||||||
Frits Dirk van Paasschen (9)(14) |
— | * | 254,048 | * | 254,048 | * | ||||||||||||||||||
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|
|
|
|
|
|
|
|
|
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All executive officers and directors of the Post-Combination Company as a group (10 persons) (15) |
— | * | 33,311,847 | 11.3 | % | 33,311,847 | 11.9 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
* | Less than 1%. |
** | Percentage of total voting power represents voting power with respect to all shares of the Class A Stock and Class F Stock, as a single class. |
(1) | Beneficial ownership is determined in accordance with the rules of the SEC. Except as described in the footnotes below and subject to applicable community property laws and similar laws, we believe that each person listed has sole voting and investment power with respect to such shares. |
(2) | Unless otherwise indicated, the business address of each of the entities, directors and executives listed directly below is 6260 Lookout Road, Boulder, Colorado 80301. |
(3) | Represents shares held by Gores Metropoulos Sponsor II, LLC which is controlled indirectly by Mr. Gores. Mr. Gores may be deemed to beneficially own 11,175,000 shares of Class F Stock and 4,000,000 shares of Common Stock to be purchased under the Sponsor Subscription Agreement, provided, however, that Gores Metropoulos Sponsor II, LLC may choose to syndicate such shares pursuant to the Sponsor Subscription Agreement (and the Company currently expects that all such shares will be syndicated) and ultimately exercises voting and dispositive power of the securities held by Gores Metropoulos Sponsor II, LLC. Voting and disposition decisions with respect to such securities are made by Mr. Gores. Mr. Gores disclaims beneficial ownership of these securities except to the extent of any pecuniary interest therein. Gores Metropoulos Sponsor II, LLC and its affiliates’ maximum total potential ownership interest in the Post- Combination Company is [●]%, which assumes (a) the conversion and exercise of all Private Placement Warrants, (b) that no Public Warrants are exercised, (c) the redemption of 15,001,216 Public Shares in accordance with the Maximum Redemption scenario, (d) that the Gores Metropoulos Sponsor II, LLC does not elect to syndicate any of the 4,000,000 shares to be purchased pursuant to the Sponsor Subscription Agreement, and (e) that no Earn Out Shares are issued. |
(4) | Consists of [●] shares of Common Stock, which will be held of record by [●] (collectively referred to as “Fidelity”) assuming the consummation of the Business Combination and based on Sonder’s capitalization as of June 30, 2021. Includes 3,000,000 shares of Common Stock to be purchased by [●] in the PIPE Investment. The business address of Fidelity is [●]. |
(5) | Consists of [●] shares of Common Stock, which will be held of record by [●] (collectively referred to as “Greenoaks”) assuming the consummation of the Business Combination and based on Sonder’s capitalization as of June 30, 2021. The business address of Greenoaks is [●]. |
(6) | Consists of [●] shares of Common Stock, which will be held of record by [●] (collectively referred to as “Westcap”) assuming the consummation of the Business Combination and based on Sonder’s capitalization as of June 30, 2021. The business address of Westcap is [●]. |
(7) | Consists of [●] shares of Common Stock, which will be held of record by [●] (collectively referred to as “Spark”) assuming the consummation of the Business Combination and based on Sonder’s capitalization as of June 30, 2021. Nabeel Hyatt is expected to be a member of the Board of Directors of the Post-Combination Company and disclaims beneficial ownership of the shares held by the Spark entities except to the extent of his pecuniary interest therein. The business address of Spark is [●]. |
(8) | According to the Schedule 13G filed jointly by Citadel Advisors LLC, a Delaware limited liability company (“Citadel Advisors”), Citadel Advisors Holdings LP (“CAH”), Citadel GP LLC (“CGP”), Citadel Securities LLC (“Citadel Securities”), CALC IV LP (“CALC4”), Citadel Securities GP LLC (“CSGP”) and Kenneth Griffin (“Mr. Griffin”), with the SEC on May 14, 2021. Each of Citadel Advisors, CAH and CGP beneficially owned 3,253,288 Class A Stock. Additionally, each of Citadel Securities, CALC4 and CSGP beneficially owned 33,263 shares of Class A Stock. Citadel Advisors is the portfolio manager for Citadel Multi-Strategy Equities Master Fund Ltd., a Cayman Islands company. CAH is the sole member of Citadel Advisors. CGP is the general partner of CAH. CALC4 is the non-member manager of Citadel Securities. CSGP is the general partner of CALC4. Mr. Griffin is the President and Chief Executive Officer of CGP, and owns a controlling interest in CGP and CSGP. Mr. Griffin may be deemed to beneficially own 3,286,551 shares of Class A Stock (which will be reclassified into Common Stock upon the effectiveness of the Amended and Restated Certificate of Incorporation), (a) which constitutes 7.3% of the Class A Stock outstanding prior to the consummation of the Business Combination and (b) which would constitute 1.1% or 1.2% of the Post-Combination Company Stock outstanding following the consummation of the Business Combination assuming no redemption of the Company’s Class A Stock and assuming maximum redemption of the Company’s |
Class A Stock, respectively. The business address of each of Citadel Advisors, CAH, CGP, Citadel Securities, CALC4, CSGP and Mr. Griffin is 131 S. Dearborn Street, 32nd Floor, Chicago, Illinois 60603. |
(9) | The principal business address is c/o Sonder Holdings Inc., 101 15th Street, San Francisco, CA 94103. |
(10) | Consists of (a) 4,752,791 shares of Common Stock to be held beneficially by Mr. Davidson, of which 1,729,347 shares are subject to the Company’s repurchase right at the original exercise price per share held the Post-Combination Company within 60 days of June 30, 2021 in the event of the termination of Mr. Davidson’s employment with the Post-Combination Company and (b) 8,540,198 shares of Post-Combination Company Special Voting Common Stock. Includes the effect of (x) Sonder’s repurchase of 1,500,000 shares of Sonder Common Stock, which is the estimated number of shares that Sonder will repurchase prior to the consummation of the Business Combination to extinguish a promissory note issued by Mr. Davidson to Sonder, with a total principal and accrued interest amount of $25.4 million as of June 30, 2021 (the actual number of shares repurchased will be determined before the completion of the Business Combination based on the value of the Sonder Common Stock and amount of principal and accrued interest at that time) and (y) Mr. Davidson’s sale of 1,829,268 shares of Post-Combination Company Common Stock to certain purchasers immediately following the consummation of the Business Combination for $8.20 per share for the purpose of satisfying personal tax liabilities related to his stock ownership and departure tax related to his move from Canada to the United States. |
(11) | Consists of 1,477,411 shares of Common Stock subject to outstanding options which are exercisable within 60 days of June 30, 2021. |
(12) | Consists of 13,957 shares of Common Stock subject to outstanding options which are exercisable within 60 days of June 30, 2021. |
(13) | Consists of 70,417 shares of Common Stock subject to outstanding options which are exercisable within 60 days of June 30, 2021. |
(14) | Consists of (a) 80,506 shares of Common Stock to be held directly by Mr. van Paasschen, (b) 95,062 shares of Common Stock subject to outstanding options which are exercisable within 60 days of June 30, 2021, and (c) 78,480 shares which may be acquired upon the exercise of Mr. van Paasschen’s right to acquire additional shares of Sonder Preferred Stock prior to the consummation of the Business Combination. |
(15) | Includes 3,046,908 shares subject to outstanding options which are exercisable within 60 days of June 30, 2021 and Mr. van Paasschen’s right to acquire additional shares of Sonder Preferred Stock. |
Public Units (GMIIU) (1) |
Public Shares (GMII) (2) |
Public Warrants (GMIIW) (2) |
||||||||||||||||||||||
High |
Low |
High |
Low |
High |
Low |
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Fiscal Year 2021: |
||||||||||||||||||||||||
Quarter ended June 30, 2021 |
$ | 10.95 | $ | 10.01 | $ | 11.00 | $ | 9.80 | $ | 2.06 | $ | 1.02 | ||||||||||||
Quarter ended March 31, 2021 |
$ | 10.11 | $ | 10.04 | $ | 9.90 | $ | 9.81 | $ | 1.49 | $ | 1.06 | ||||||||||||
Fiscal Year 2020: |
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Quarter ended December 31, 2020 |
N/A | N/A | N/A | N/A | N/A | N/A |
(1) | Began trading on January 20, 2021. |
(2) | Began trading on March 15, 2021. |
• | change the Company’s name to “Sonder Holdings Inc.”; |
• | change the nature of the business or purpose of the Company to “any lawful act or activity for which corporations may be organized under the Delaware General Corporation Law”; |
• | increase the Company’s total number of authorized shares of all classes of stock from 441,000,000 authorized shares to 4,500,000,000 authorized shares, which would consist of (i) increasing the Common Stock from 440,000,000 authorized shares to 2,250,000,000 authorized shares, (ii) authorizing the creation of the Company’s Special Voting Common Stock, which will consist of 2,000,000,000 authorized shares, (iii) eliminating the authorization of the Company’s Class F Stock, (iv) eliminating the authorization of the Company’s Class A Stock, and (v) increasing the Company’s Preferred Stock from 1,000,000 authorized shares to 250,000,000 authorized shares; |
• | cause the reclassification and change of our outstanding shares of Class A Stock and Class F Stock into Common Stock and make certain conforming changes; |
• | provide that the Company’s board of directors shall be divided into three classes as nearly equal in size as is practicable and that a director of the Company can only be removed for cause; |
• | remove the provision in the Current Company Certificate providing that the Company renounces its interest in any corporate opportunity offered to any director or officer of the Company unless such opportunity is expressly offered to such person solely in his or her capacity as the Company’s director or officer and such opportunity is one the Company is legally and contractually permitted to undertake and would otherwise be reasonable for the Company to pursue; and |
• | require the approval by affirmative vote of the holders of at least two-thirds of the voting power of all of the then-outstanding shares of the capital stock of the Company to make amendments to certain provisions of the Amended and Restated Certificate of Incorporation relating to authorized shares and preferred stock, the board of directors, limitations on the liability of directors, bylaws, special meetings, enforceability and amendments. |
• | Amending Article I to change the Company’s name to “Sonder Holdings Inc.” Previously, the Company’s name was Gores Metropoulos II, Inc. Our Board believes the name of the Post-Combination Company should more closely align with the name of the post-Business Combination operating business and therefore has proposed the name change. |
• | Amending Article II to provide that the nature of the business purpose of the Company is “any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware”. Our Board believes this change is appropriate to remove language applicable to a blank check company. |
• | Amending Article IV to increase the Company’s total number of authorized shares of all classes of Common Stock from 441,000,000 authorized shares to 4,500,000,000 authorized shares, which would consist of (i) increasing the Common Stock from 440,000,000 authorized shares to 2,250,000,000 authorized shares, (ii) authorizing the creation of the Company’s Special Voting Common Stock, which will consist of 2,000,000,000 authorized shares, (iii) eliminating the authorization of the Company’s Class F Stock, (iv) eliminating the authorization of the Company’s Class A Stock and (v) increasing the Company’s Preferred Stock from 1,000,000 authorized shares to 250,000,000 authorized shares. The amendment provides for the automatic reclassification and change of the issued and outstanding Class A Stock and Class F Stock, and the elimination of the authorized Class A Stock and Class F Stock, which will facilitate the closing of the Business Combination. In addition, the increase in the total number of authorized shares provides the Post-Combination Company adequate authorized capital to provide flexibility for future issuances of Common Stock if determined by our Board to be in the best interests of the Post-Combination Company, without incurring the risk, delay and potential expense incident to obtaining stockholder approval for a particular issuance. |
• | Removing Article X providing that the Company renounces its interest in any corporate opportunity offered to any director or officer of the Company unless such opportunity is expressly offered to such person solely in his or her capacity as the Company’s director or officer and such opportunity is one the Company is legally and contractually permitted to undertake and would otherwise be reasonable for the Company to pursue. The Board believes that the removal of the corporate opportunity doctrine provisions ensures that directors, officers and certain stockholders may not to take advantage of opportunities beneficial to the Post-Combination Company for themselves without first disclosing the opportunity to the Post-Combination Company and giving the Post-Combination Company Board the opportunity to pursue or decline the opportunity on behalf of the Post-Combination Company. |
• | Amending Article V to provide that the Company’s board of directors shall be divided into three classes as nearly equal in size as is practicable and that a director of the Company may only be removed for cause. The amendment is intended to protect all stockholders against the potential self-interested actions by one or a few large stockholders. In addition, our Board believes that a voting requirement that only allows removal for cause encourages any person seeking control of the Post-Combination Company to negotiate with our Board to reach terms that are appropriate for all stockholders. |
• | Amending Article XI to require the approval by at least two-thirds of the voting power of all of the then-outstanding shares of the capital stock of the Company to make amendments to certain provisions of the Amended and Restated Certificate of Incorporation relating to authorized shares and preferred stock, the board of directors, limitations on the liability of directors, bylaws, special meetings, enforceability and amendments. The amendment is intended to protect key provisions of the Amended and Restated Certificate of Incorporation from arbitrary amendment, to prevent a simple majority of stockholders from taking actions that may be harmful to other stockholders or making changes to provisions that are intended to protect all stockholders as negotiated by the parties with respect to the Business Combination. |
• | The Management Equity Incentive Plan will continue until terminated by our Board or our compensation committee; |
• | The Management Equity Incentive Plan provides for the grant of restricted stock units; |
• | Up to 14,500,000 shares of Common Stock may become authorized for issuance pursuant to awards under the Management Equity Incentive Plan, depending on the occurrence of Triggering Events, as described below; |
• | The Management Equity Incentive Plan will be administered by our Board or, if designated by our Board, our compensation committee. |
• | The Incentive Plan will continue until terminated by our Board or our compensation committee, but (i) no incentive stock options may be granted after ten years from the earlier of the Board or stockholder approval of the Incentive Plan and (ii) the Incentive Plan’s automatic share reserve increase (as described below) will operate only until the tenth anniversary of the earlier of the Board or stockholder approval of the Incentive Plan; |
• | The Incentive Plan provides for the grant of stock options, both incentive stock options and nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, and performance awards; |
• | [●]shares of Common Stock will be authorized for issuance pursuant to awards under the Incentive Plan, plus up to [●] shares of Common Stock that may become available for issuance as a result of recycling of assumed awards outstanding immediately prior to the Closing, as described below; |
• | The Incentive Plan provides for an automatic share reserve increase feature, whereby the share reserve will automatically be increased on the first day of each fiscal year beginning with the 2022 fiscal year and ending with the 2031 fiscal year, in an amount equal to the least of (i) [●]shares, (ii) 5% of the total number of shares of Common Stock outstanding on the last day of the immediately preceding fiscal year, and (iii) a lesser number of shares as determined by the administrator. |
• | The Incentive Plan will be administered by our Board or, if designated by our Board, our compensation committee. |
• | [●] shares of Common Stock; |
• | 5% of the total number of shares of Common Stock outstanding as of the last day of our immediately preceding fiscal year; or |
• | Such lesser amount determined by the administrator. |
• | [●] shares of Common Stock; |
• | 1% of the total number of shares of Common Stock outstanding as of the last day of our immediately preceding fiscal year; or |
• | Such lesser amount determined by the administrator. |
• | immediately after the grant would own capital stock and/or hold outstanding options to purchase such stock possessing 5% or more of the total combined voting power or value of all classes of capital stock of the Company or of any parent or subsidiary of the Company; or |
• | holds rights to purchase shares under all employee stock purchase plans of the Company or any parent or subsidiary of the Company that accrue at a rate that exceeds $25,000 worth of shares for each calendar year in which such rights are outstanding at any time. |
• | if the shares are registered in the name of the stockholder, the stockholder should contact us at our offices at Gores Metropoulos II, Inc., 6260 Lookout Road, Boulder, CO 80301 or by telephone at (303) 531-3100, to inform us of his or her request; or |
• | if a bank, broker or other nominee holds the shares, the stockholder should contact the bank, broker or other nominee directly. |
Page |
||||
Gores Metropoulos II, Inc. |
||||
Audited Financial Statements—For the period ended December 31, 2020 |
||||
F-2 |
||||
F-3 |
||||
F-4 |
||||
F-5 |
||||
F-6 |
||||
F-7 |
||||
Unaudited Financial Statements—For the three and six months ended June 30, 2021 |
||||
F-14 |
||||
F-15 |
||||
F-16 |
||||
F-17 |
||||
F-18 |
||||
Sonder Holdings Inc. |
||||
Unaudited Financial Statements—For the three and six months ended June 30, 2021 |
||||
F-32 |
||||
F-33 |
||||
F-34 |
||||
F-38 |
||||
F-40 |
||||
Audited Financial Statements—For the year ended December 31, 2020 |
||||
F-63 |
||||
F-64 |
||||
F-65 |
||||
F-66 |
||||
F-67 |
||||
F-69 |
CURRENT ASSETS: |
||||
Cash |
$ | |||
Deferred offering costs associated with proposed public offering |
||||
|
|
|||
Total assets |
$ | |||
|
|
|||
LIABILITIES AND STOCKHOLDER’S EQUITY |
||||
Current liabilities: |
||||
State franchise tax |
||||
Accrued expenses, formation and offering costs |
||||
Notes payable—related party |
||||
|
|
|||
Total liabilities |
$ | |||
|
|
|||
COMMITMENTS AND CONTINGENCIES |
||||
Stockholder’s equity: |
||||
Class A common stock, subject to redemption |
— | |||
Preferred stock, $ |
||||
Common stock |
||||
Class A common stock, $ |
— | |||
Class F common stock, $ |
||||
Additional paid-in-capital |
||||
Accumulated Deficit |
( |
) | ||
|
|
|||
Total stockholder’s equity |
( |
) | ||
|
|
|||
Total liabilities and stockholder’s equity |
$ | |||
|
|
Revenues |
$ | — | ||
Organizational expenses |
( |
) | ||
Professional fees |
( |
) | ||
State franchise tax |
( |
) | ||
|
|
|||
Net loss |
$ | ( |
) | |
|
|
|||
Weighted average common shares outstanding |
||||
Basic and diluted |
||||
Net loss per common share: |
$ | ( |
) |
Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Total Stockholder’s Equity |
|||||||||||||||||||||||||
Class A |
Class F |
|||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||
Balance at July 21, 2020 (inception) |
$ | $ | $ | $ | $ | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Sale of Class F common stock, par value $ to Sponsor on July 23, 2020 (1) |
— | — | — | |||||||||||||||||||||||||
Net loss |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2020 |
$ |
$ |
$ |
( |
) |
$ |
( |
) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
This number includes up to shares of Class F common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters. |
Cash flows from operating activities: |
||||
Net loss |
$ | ( |
) | |
Changes in accrued expenses, formation and offering costs |
||||
Changes in state franchise tax accrual |
||||
Net cash used by operating activities |
( |
) | ||
Cash flows from financing activities: |
||||
Proceeds from note payable—related party |
$ | |||
Proceeds from sale of Class F common stock to Sponsor |
||||
Payments of deferred offering cost |
( |
) | ||
Net cash provided by financing activities |
||||
Increase in cash |
||||
Cash at beginning of period |
— | |||
Cash at end of period |
||||
Supplemental disclosure of non-cash financing activities: |
||||
Deferred offering costs |
$ |
June 30, 2021 (unaudited) |
December 31, 2020 (audited) |
|||||||
CURRENT ASSETS: |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Deferred offering costs |
— | |||||||
Prepaid assets |
— | |||||||
|
|
|
|
|||||
Total current assets |
||||||||
Investments and cash held in Trust Account |
— | |||||||
|
|
|
|
|||||
Total assets |
$ | $ | ||||||
|
|
|
|
|||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
||||||||
Current liabilities: |
||||||||
Accrued expenses, formation and offering costs |
$ | $ | ||||||
State franchise tax accrual |
||||||||
Public warrants derivative liability |
— | |||||||
Private warrants derivative liability |
— | |||||||
Notes and advances payable – related party |
||||||||
|
|
|
|
|||||
Total current liabilities |
||||||||
Deferred underwriting compensation |
— | |||||||
|
|
|
|
|||||
Total liabilities |
$ | $ | ||||||
|
|
|
|
|||||
Commitments and c ontingencies |
||||||||
Class A subject to possible redemption, - June 30 , 2021 and December 31, 2020, respectively (at redemption value of $ |
— | |||||||
Stockholders’ equity (deficit): |
||||||||
Preferred stock, $ |
||||||||
Common stock |
||||||||
Class A Common Stock, $ |
— | — | ||||||
Class F Common Stock, $ J une 30 , 2021 and December 31, 2020, respectively |
||||||||
Additional paid-in-capital |
— | |||||||
Accumulated deficit |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total stockholders’ equity (deficit) |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total liabilities and stockholders’ equity (deficit) |
$ | $ | ||||||
|
|
|
|
Three Months Ended June 30, 2021 |
Six Months Ended June 30, 2021 |
|||||||
Revenues |
— |
— |
||||||
Professional fees and other expenses |
( |
) | |
( |
) | |||
State franchise taxes, other than income tax |
( |
) | |
( |
) | |||
Gain from change in fair value of warrant liability |
|
|||||||
Allocated expense for warrant issuance cost |
|
( |
) | |||||
|
|
|
|
|
||||
Net income/(loss) from operations |
( |
) | |
|||||
Other income—interest income |
|
|||||||
|
|
|
|
|
||||
Net income/(loss) before income taxes |
$ | ( |
) | |
$ |
|||
|
|
|
|
|
||||
Provision for income tax |
— | |
||||||
|
|
|
|
|
||||
Net income/(loss) attributable to common shares |
$ | ( |
) | |
$ |
|||
|
|
|
|
|
||||
Net loss per ordinary share: |
|
|||||||
Class A Common Stock—basic and diluted |
$ | ( |
) | |
$ |
( |
) | |
|
|
|
|
|
||||
Class F Common Stock—basic and diluted |
$ | ( |
) | |
$ |
( |
) |
Three Months Ended June 30, 2021 |
||||||||||||||||||||||||||||
Class A Common Stock |
Class F Common Stock |
Additional Paid-In Capital |
Accumulated Deficit |
Stockholders’ Equity (Deficit) |
||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||
Balance at April 1, 2021 |
— |
$ |
— |
$ |
$ |
— |
$ |
( |
) |
$ |
( |
) | ||||||||||||||||
Net loss |
— |
— |
— |
— |
— |
( |
) |
( |
) | |||||||||||||||||||
Balance at June 30, 2021 |
— |
$ |
— |
$ |
$ |
— |
$ |
( |
) |
$ |
( |
) | ||||||||||||||||
Six Months Ended June 30, 2021 |
||||||||||||||||||||||||||||
Class A Common Stock |
Class F Common Stock |
Additional Paid-In Capital |
Accumulated Deficit |
Stockholders’ Equity (Deficit) |
||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||
Beginning Balance at January 1, 2021 |
— | $ | — | $ | $ | $ | ( |
) | $ | ( |
) | |||||||||||||||||
Forfeited Class F Common stock by Sponsor |
— | — | ( |
) | ( |
) | — | — | ||||||||||||||||||||
Excess of fair value paid by founders for warrants |
— | — | — | — | — | |||||||||||||||||||||||
Subsequent measurement under ASC 480-10-S99 against additional paid-in capital |
— | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||
Subsequent measurement under ASC 480-10-S99 against accumulated deficit |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
Net income |
— | — | — | — | — | |||||||||||||||||||||||
Balance at June 30 , 2021 |
— | $ | — | $ | $ | — | $ | ( |
) | $ | ( |
) | ||||||||||||||||
Cash flows from operating activities: |
||||
Net income |
$ | |||
Changes in state franchise tax accrual |
||||
Changes in prepaid assets |
( |
) | ||
Changes in accrued expenses, formation and offering costs |
||||
Issuance costs related to warrant liability |
||||
Changes in fair value warrants derivative liability |
( |
) | ||
Net cash used by operating activities |
( |
) | ||
Cash flows from investing activities: |
||||
Cash deposited in Trust Account |
( |
) | ||
Interest and dividends reinvested in the Trust Account |
( |
) | ||
Net cash used in investing activities |
( |
) | ||
Cash flows from financing activities: |
||||
Proceeds from sale of Units in initial public offering |
||||
Proceeds from sale of Private Placement Warrants to Sponsor |
||||
Proceeds from notes and advances payable – related party |
||||
Repayment of notes and advances payable – related party |
( |
) | ||
Payment of underwriters’ discounts and commissions |
( |
) | ||
Payment of accrued offering costs |
( |
) | ||
Net cash provided by financing activities |
||||
De crease in cash |
( |
) | ||
Cash at beginning of period |
||||
Cash at end of period |
$ | |||
Supplemental disclosure of income and franchise taxes paid: |
||||
Deferred underwriting compensation |
$ | |||
Cash paid for income and state franchise taxes |
$ |
For the Three Months Ended June 30, 2021 |
For the Six Months Ended June 30, 2021 |
|||||||||||||||
Class A |
Class F |
Class A |
Class F |
|||||||||||||
Basic and diluted net income/(loss) per share: |
||||||||||||||||
Numerator: |
||||||||||||||||
Allocation of net income/(loss) including accretion of temporary equity |
$ | ( |
) | $ | ( |
) | $ |
( |
) |
$ |
( |
) | ||||
Denominator: |
||||||||||||||||
Weighted-average shares outstanding |
||||||||||||||||
Basic and diluted net income/(loss) per share |
$ | ( |
) | $ | ( |
) | $ |
( |
) |
$ |
( |
) |
As of June 30, 2021 |
||||
Gross proceeds |
$ | |||
Less: |
||||
Proceeds allocated to public warrants |
$ | ( |
) | |
Class A shares issuance costs |
$ | ( |
) | |
|
|
|||
Plus: |
||||
Accretion of carrying value to redemption value |
$ | ( |
) | |
|
|
|||
Contingently redeemable Class A Common Stock |
$ | |||
|
|
As of |
||||||||
January 20, 2021 |
June 30, 2021* |
|||||||
Implied volatility/Volatility |
% | |||||||
Risk-free interest rate |
% | |||||||
Warrant exercise price |
$ | $ | ||||||
Expected term |
* |
Volatility and risk-free rate were not utilized in computation. |
Private placement warrants |
Public warrants |
Total warrant liabilities |
||||||||||
Fair value at January 20, 2021 |
$ | $ | $ | |||||||||
Change in fair value |
( |
) | ( |
) | ( |
) | ||||||
Fair value at June 30 , 2021 |
$ |
Description |
June 30, 2021 |
Quoted Prices in Active Markets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Other Unobservable Inputs (Level 3) |
||||||||||||
Investments and cash held in Trust Account |
$ | $ | $ | — | $ | — | ||||||||||
Public warrants |
— | — | ||||||||||||||
Private placement warrants |
— | — | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | $ | $ | $ | — | |||||||||||
|
|
|
|
|
|
|
|
June 30, 2021 |
December 31, 2020 |
|||||||
Assets |
||||||||
Current assets |
||||||||
Cash |
$ |
178,351 |
$ |
121,467 |
||||
Restricted cash |
75 |
1,641 |
||||||
Accounts receivable, net of allowance of $2,658 and $2,570 at June 30, 2021 and December 31, 2020, respectively |
1,815 |
1,774 |
||||||
Prepaid rent |
10,786 |
9,907 |
||||||
Prepaid expenses |
4,063 |
3,112 |
||||||
Other current assets |
9,399 |
8,375 |
||||||
|
|
|
|
|||||
Total current assets |
204,489 |
146,276 |
||||||
Property and equipment, net |
22,469 |
24,204 |
||||||
Other non-current assets |
14,179 |
7,041 |
||||||
|
|
|
|
|||||
Total assets |
$ |
241,137 |
$ |
177,521 |
||||
|
|
|
|
|||||
Liabilities, mezzanine equity and stockholders’ deficit |
||||||||
Current liabilities |
||||||||
Accounts payable |
$ |
10,131 |
$ |
10,915 |
||||
Accrued liabilities |
15,281 |
8,248 |
||||||
Sales tax payable |
8,873 |
6,880 |
||||||
Deferred revenue |
22,005 |
10,203 |
||||||
Current portion of long-term debt |
20,847 |
17,038 |
||||||
Convertible notes |
170,964 |
— |
||||||
Other current liabilities |
869 |
917 |
||||||
|
|
|
|
|||||
Total current liabilities |
248,970 |
54,201 |
||||||
Deferred rent |
35,985 |
28,760 |
||||||
Long-term debt |
14,839 |
25,022 |
||||||
Other non-current liabilities |
4,532 |
2,935 |
||||||
|
|
|
|
|||||
Total liabilities |
304,326 |
110,918 |
||||||
|
|
|
|
|||||
Commitments and contingencies (Note 8) |
||||||||
Mezzanine equity: |
||||||||
Redeemable convertible preferred stock |
518,750 |
517,730 |
||||||
Exchangeable preferred stock |
49,733 |
49,733 |
||||||
|
|
|
|
|||||
Total mezzanine equity |
568,483 |
567,463 |
||||||
Stockholders’ deficit: |
||||||||
Common stock |
1 |
1 |
||||||
Exchangeable AA stock |
— |
— |
||||||
Additional paid-in capital |
32,742 |
13,898 |
||||||
Cumulative translation adjustment |
8,500 |
5,666 |
||||||
Accumulated deficit |
(672,915 |
) |
(520,425 |
) | ||||
|
|
|
|
|||||
Total stockholders’ deficit |
(631,672 |
) |
(500,860 |
) | ||||
|
|
|
|
|||||
Total liabilities, mezzanine equity and stockholders’ deficit |
$ |
241,137 |
$ |
177,521 |
||||
|
|
|
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Revenue |
$ |
47,269 |
$ |
18,841 |
$ |
78,827 |
$ |
60,722 |
||||||||
Cost of revenue (excluding depreciation and amortization) |
43,745 |
28,387 |
82,950 |
75,313 |
||||||||||||
Operations and support |
34,889 |
22,641 |
60,312 |
57,704 |
||||||||||||
General and administrative |
24,615 |
15,156 |
56,764 |
36,424 |
||||||||||||
Research and development |
4,066 |
3,999 |
7,385 |
9,478 |
||||||||||||
Sales and marketing |
4,888 |
2,923 |
7,399 |
7,297 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total costs and expenses |
112,203 |
73,106 |
214,810 |
186,216 |
||||||||||||
Loss from operations |
(64,934 |
) |
(54,265 |
) |
(135,983 |
) |
(125,494 |
) | ||||||||
Interest expense, net and other expense (income), net |
||||||||||||||||
Interest expense, net |
12,522 |
1,669 |
16,349 |
3,176 |
||||||||||||
Other expense (income), net |
(3,577 |
) |
4,862 |
65 |
(6,131 |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total interest expense, net and other expense (income), net |
8,945 |
6,531 |
16,414 |
(2,955 |
) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before income taxes |
(73,879 |
) |
(60,796 |
) |
(152,397 |
) |
(122,539 |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Provision for income taxes |
70 |
3 |
93 |
3 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss |
$ |
(73,949 |
) |
$ |
(60,799 |
) |
$ |
(152,490 |
) |
$ |
(122,542 |
) | ||||
|
|
|
|
|
|
|
|
|||||||||
Net loss per share, basic and diluted |
$ |
(9.41 |
) |
$ |
(9.86 |
) |
$ |
(20.18 |
) |
$ |
(20.35 |
) | ||||
|
|
|
|
|
|
|
|
|||||||||
Weighted average shares outstanding of common stock, basic and diluted |
7,857,000 |
6,167,073 |
7,558,055 |
6,022,003 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive loss: |
||||||||||||||||
Net loss |
$ |
(73,949 |
) |
$ |
(60,799 |
) |
$ |
(152,490 |
) |
$ |
(122,542 |
) | ||||
Change in foreign currency translation adjustment |
1,689 |
4,990 |
2,834 |
(6,876 |
) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Comprehensive loss |
$ |
(72,260 |
) |
$ |
(55,809 |
) |
$ |
(149,656 |
) |
$ |
(129,418 |
) | ||||
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2021 |
||||||||||||||||||||||||||||||||||||||||||||||||
Redeemable Convertible Preferred Stock |
Exchangeable Preferred Stock |
Common Stock |
Exchangeable AA Stock |
Additional Paid-in Capital |
Accumulated Other Comprehensive Income |
Accumulated Deficit |
Total Stockholders’ Deficit |
|||||||||||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Par Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||||||||||
Balances as of March 31, 2021 |
75,757,555 |
$ |
518,750 |
12,579,755 |
$ |
49,733 |
7,427,992 |
$ |
1 |
9,437,358 |
— |
$ |
28,797 |
$ |
6,811 |
$ |
(598,966 |
) |
$ |
(563,357 |
) | |||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options |
— |
— |
— |
— |
638,941 |
— |
— |
— |
1,377 |
— |
— |
1,377 |
||||||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of common stock warrants |
— |
— |
— |
— |
56,075 |
— |
— |
— |
120 |
— |
— |
120 |
||||||||||||||||||||||||||||||||||||
Stock-based compensation |
— |
— |
— |
— |
— |
— |
— |
— |
2,448 |
— |
— |
2,448 |
||||||||||||||||||||||||||||||||||||
Components of comprehensive loss: |
||||||||||||||||||||||||||||||||||||||||||||||||
Net loss |
— |
— |
— |
— |
— |
— |
— |
— |
— |
(73,949 |
) |
(73,949 |
) | |||||||||||||||||||||||||||||||||||
Other comprehensive income |
— |
— |
— |
— |
— |
— |
— |
— |
1,689 |
— |
1,689 |
|||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Balances as of June 30, 2021 |
75,757,555 |
$ |
518,750 |
12,579,755 |
$ |
49,733 |
8,123,008 |
$ |
1 |
9,437,358 |
— |
$ |
32,742 |
$ |
8,500 |
$ |
(672,915 |
) |
$ |
(631,672 |
) | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2020 |
||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Preferred Stock |
Exchangeable Preferred Stock |
Common Stock |
Exchangeable AA Stock |
Additional Paid-in Capital |
Accumulated Other Comprehensive Income (loss) |
Accumulated Deficit |
Total Stockholders’ Deficit |
|||||||||||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Par Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||||||||||
Balances as of March 31, 2020 |
56,801,371 |
$ |
315,381 |
12,159,185 |
$ |
45,203 |
6,059,870 |
$ |
1 |
9,842,579 |
— |
$ |
8,540 |
$ |
(5,460 |
) |
$ |
(331,852 |
) |
$ |
(328,771 |
) | ||||||||||||||||||||||||||
Issuance of Series E Redeemable Convertible Preferred Stock, net of issuance costs |
15,267,648 |
163,775 |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||||||
Issuance of Exchangeable Series E Preferred Stock, net of issuance costs |
— |
— |
420,570 |
4,530 |
— |
— |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options |
— |
— |
— |
— |
223,219 |
— |
— |
— |
416 |
— |
— |
416 |
||||||||||||||||||||||||||||||||||||
Stock-based compensation |
— |
— |
— |
— |
— |
— |
— |
— |
1,742 |
— |
— |
1,742 |
||||||||||||||||||||||||||||||||||||
Components of comprehensive loss: |
||||||||||||||||||||||||||||||||||||||||||||||||
Net loss |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
(60,799 |
) |
(60,799 |
) | ||||||||||||||||||||||||||||||||||
Other comprehensive income |
— |
— |
— |
— |
— |
— |
— |
— |
— |
4,990 |
— |
4,990 |
||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Balances as of June 30, 2020 |
72,069,019 |
$ |
479,156 |
12,579,755 |
$ |
49,733 |
6,283,089 |
$ |
1 |
9,842,579 |
— |
$ |
10,698 |
$ |
(470 |
) |
$ |
(392,651 |
) |
$ |
(382,422 |
) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2021 |
||||||||||||||||||||||||||||||||||||||||||||||||
Redeemable Convertible Preferred Stock |
Exchangeable Preferred Stock |
Common Stock |
Exchangeable AA Stock |
Additional Paid-in Capital |
Accumulated Other Comprehensive Income (loss) |
Accumulated Deficit |
Total Stockholders’ Deficit |
|||||||||||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Par Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||||||||||
Balances as of December 31, 2020 |
75,664,679 |
$ |
517,730 |
12,579,755 |
$ |
49,733 |
7,169,758 |
$ |
1 |
9,437,358 |
— |
$ |
13,898 |
$ |
5,666 |
$ |
(520,425 |
) |
$ |
(500,860 |
) | |||||||||||||||||||||||||||
Issuance of Series E Redeemable Convertible Preferred Stock, net of issuance costs |
92,876 |
1,020 |
— |
— |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options |
— |
— |
— |
— |
897,175 |
— |
— |
— |
2,123 |
— |
— |
2,123 |
||||||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of common stock warrants |
— |
— |
— |
— |
56,075 |
— |
— |
— |
120 |
— |
— |
120 |
||||||||||||||||||||||||||||||||||||
Stock-based compensation |
— |
— |
— |
— |
— |
— |
— |
— |
16,601 |
— |
— |
16,601 |
||||||||||||||||||||||||||||||||||||
Components of comprehensive loss: |
||||||||||||||||||||||||||||||||||||||||||||||||
Net loss |
— |
— |
— |
— |
— |
— |
— |
— |
— |
(152,490 |
) |
(152,490 |
) | |||||||||||||||||||||||||||||||||||
Other comprehensive income |
— |
— |
— |
— |
— |
— |
— |
— |
2,834 |
— |
2,834 |
|||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Balances as of June 30, 2021 |
75,757,555 |
$ |
518,750 |
12,579,755 |
$ |
49,733 |
8,123,008 |
$ |
1 |
9,437,358 |
— |
$ |
32,742 |
$ |
8,500 |
$ |
(672,915 |
) |
$ |
(631,672 |
) | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2020 |
||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Preferred Stock |
Exchangeable Preferred Stock |
Common Stock |
Exchangeable AA Stock |
Additional Paid-in Capital |
Accumulated Other Comprehensive Income (loss) |
Accumulated Deficit |
Total Stockholders’ Deficit |
|||||||||||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Par Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||||||||||
Balances as of December 31, 2019 |
56,753,734 |
$ |
314,967 |
12,159,185 |
$ |
45,203 |
5,705,570 |
$ |
1 |
9,842,579 |
— |
$ |
5,032 |
$ |
6,406 |
$ |
(270,109 |
) |
$ |
(258,670 |
) | |||||||||||||||||||||||||||
Issuance of Series D Redeemable Convertible Preferred Stock, net of issuance costs |
47,637 |
414 |
||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Series E Redeemable Convertible Preferred Stock, net of issuance costs |
15,267,648 |
163,775 |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||||||
Issuance of Exchangeable Series E Preferred Stock, net of issuance costs |
— |
— |
420,570 |
4,530 |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options |
— |
— |
— |
— |
577,519 |
— |
— |
— |
857 |
— |
— |
857 |
||||||||||||||||||||||||||||||||||||
Stock-based compensation |
— |
— |
— |
— |
— |
— |
— |
— |
4,809 |
— |
— |
4,809 |
||||||||||||||||||||||||||||||||||||
Components of comprehensive loss: |
||||||||||||||||||||||||||||||||||||||||||||||||
Net loss |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
(122,542 |
) |
(122,542 |
) | ||||||||||||||||||||||||||||||||||
Other comprehensive loss |
— |
— |
— |
— |
— |
— |
— |
— |
— |
(6,876 |
) |
— |
(6,876 |
) | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Balances as of June 30, 2020 |
72,069,019 |
$ |
479,156 |
12,579,755 |
$ |
49,733 |
6,283,089 |
$ |
1 |
9,842,579 |
— |
$ |
10,698 |
$ |
(470 |
) |
$ |
(392,651 |
) |
$ |
(382,422 |
) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
||||||||
2021 |
2020 |
|||||||
Cash flows from operating activities |
||||||||
Net loss |
$ | (152,490 | ) | $ | (122,542 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Depreciation and amortization |
8,332 | 8,358 | ||||||
Share-based compensation |
16,601 | 4,809 | ||||||
Bad debt expense |
88 | 1,848 | ||||||
Write-off of capital assets |
658 | 1,540 | ||||||
Straight-line rent |
6,199 | 4,105 | ||||||
Unrealized (gain) loss on foreign currency transactions |
2,921 | (6,046 | ) | |||||
Amortization of debt issuance costs |
1,012 | 287 | ||||||
Amortization of debt discounts |
11,977 | — | ||||||
Change in fair value of derivative instruments |
(4,100 | ) | — | |||||
Change in fair value of warrants, net |
1,286 | 11 | ||||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
(164 | ) | 1,240 | |||||
Prepaid rent |
(852 | ) | 2,142 | |||||
Prepaid expenses |
(945 | ) | 1,792 | |||||
Other current assets |
(701 | ) | (831 | ) | ||||
Other non-current assets |
(6,988 | ) | 2,375 | |||||
Accounts payable |
(856 | ) | 2,229 | |||||
Accrued liabilities |
6,801 | (4,004 | ) | |||||
Sales tax payable |
1,982 | (1,778 | ) | |||||
Deferred revenue |
12,722 | 3,632 | ||||||
Other current liabilities |
13 | — | ||||||
Other non-current liabilities |
251 | 1,806 | ||||||
|
|
|
|
|||||
Net cash used in operating activities |
(96,253 | ) | (99,027 | ) | ||||
Cash flows from investing activities |
||||||||
Purchases of property and equipment |
(4,476 | ) | (8,068 | ) | ||||
Development of internal-use software |
(2,424 | ) | (1,170 | ) | ||||
|
|
|
|
|||||
Net cash used in investing activities |
(6,900 | ) | (9,238 | ) | ||||
Cash flows from financing activities |
||||||||
Repayment of debt |
(6,900 | ) | — | |||||
Proceeds from debt financing, net |
162,366 | 24,451 | ||||||
Proceeds from exercise of stock options |
2,123 | 857 | ||||||
Exercise of common stock warrants |
120 | — | ||||||
Issuance of redeemable convertible preferred stock, net |
1,020 | 168,719 | ||||||
|
|
|
|
|||||
Net cash provided by financing activities |
158,729 | 194,027 | ||||||
Effects of foreign exchange on cash |
(258 | ) | (1,056 | ) | ||||
Net change in cash and restricted cash |
55,318 | 84,706 | ||||||
Cash and restricted cash at the beginning of period |
123,108 | 114,246 | ||||||
|
|
|
|
|||||
Cash and restricted cash at end of period |
$ | 178,426 | $ | 198,952 | ||||
|
|
|
|
Six Months Ended June 30, |
||||||||
2021 |
2020 |
|||||||
Supplemental disclosures of cash flow information: |
||||||||
Cash paid for income taxes |
163 | — | ||||||
Cash paid for interest |
1,761 | 1,934 | ||||||
Non-cash disclosure of investing and financing activities: |
||||||||
Accrued purchases of property and equipment |
227 | — | ||||||
Reconciliation of cash and restricted cash: |
||||||||
Cash |
$ | 178,351 | $ | 196,242 | ||||
Restricted cash |
75 | 2,710 | ||||||
|
|
|
|
|||||
Total cash and restricted cash |
$ | 178,426 | $ | 198,952 | ||||
|
|
|
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Direct revenue |
$ | 23,924 | $ | 11,131 | $ | 44,005 | $ | 22,441 | ||||||||
Indirect revenue |
23,345 | 7,710 | 34,822 | 38,281 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenue |
$ | 47,269 | $ | 18,841 | $ | 78,827 | $ | 60,722 | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Numerator |
||||||||||||||||
Net loss |
$ | (73,949 | ) | $ | (60,799 | ) | $ | (152,490 | ) | $ | (122,542 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Denominator |
||||||||||||||||
Weighted-average common shares used in computing basic and diluted net loss per share |
7,857,000 | 6,167,073 | 7,558,055 | 6,022,003 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss per share, basic and diluted |
$ | (9.41 | ) | $ | (9.86 | ) | $ | (20.18 | ) | $ | (20.35 | ) | ||||
|
|
|
|
|
|
|
|
As of June 30, |
||||||||
2021 |
2020 |
|||||||
Options to purchase common stock |
17,100 | 10,261 | ||||||
Common stock subject to repurchase or forfeiture |
1,834 | 4,678 | ||||||
Redeemable convertible preferred stock (1) |
75,758 | 72,069 | ||||||
Exchangeable shares |
22,017 | 22,422 | ||||||
|
|
|
|
|||||
Total common stock equivalents |
116,709 | 109,430 | ||||||
|
|
|
|
(1) | Includes the warrants reclassified to equity as of December 31, 2019 and those issued in connection with the 2018 Security and Loan Agreement and related amendment as of June 30, 2021 and 2020. |
Level 3 |
||||||||
June 30, 2021 |
December 31, 2020 |
|||||||
Financial liabilities: |
||||||||
Other non-current liabilities: |
||||||||
Preferred stock warrant liabilities |
$ | 2,426 | $ | 1,140 | ||||
Share-settled redemption feature |
41,055 | — | ||||||
|
|
|
|
|||||
Total financial liabilities measured and recorded at fair value |
$ | 43,481 | $ | 1,140 | ||||
|
|
|
|
Level 3 |
||||||||
June 30, 2021 |
December 31, 2020 |
|||||||
Beginning balance |
$ | 1,140 | $ | 822 | ||||
Additions for new instruments issued |
45,155 | 292 | ||||||
Increase in fair value of preferred stock warrants |
1,286 | 26 | ||||||
Decrease in fair value of share-settled redemption feature |
(4,100 | ) | — | |||||
|
|
|
|
|||||
Total financial liabilities measured and recorded at fair value |
$ | 43,481 | $ | 1,140 | ||||
|
|
|
|
• | Qualified Financing Conversion: If Sonder receives aggregate gross proceeds of at least $50.0 million in the next round of preferred stock financing on or prior to the maturity date (Qualified Financing), the outstanding principal and accrued and unpaid interest of the Convertible Notes shall be automatically converted at the closing of such financing into shares of the preferred stock issued in such financing. |
• | Qualified IPO Conversion: If Sonder closes an initial public offering with gross proceeds not less than $50.0 million on or prior to the maturity date (Qualified IPO), the outstanding principal and accrued and unpaid interest of the Convertible Notes shall be automatically converted into Sonder’s common shares. |
• | Qualified Public Transaction Conversion – Qualified SPAC: If the closing of an acquisition transaction with a publicly listed special purpose acquisition company or its subsidiary with not less than $200 million in available cash in its escrow or trust account occurs on or prior to the maturity date (Qualified SPAC), the outstanding principal and accrued and unpaid interest of the Convertible Notes shall be automatically converted into Sonder’s common stock. |
• | Qualified Financing Conversion: the lesser of (i) $2.3 billion divided by the number of outstanding shares of Sonder’s common stock on a fully diluted basis immediately prior to the closing of the next |
round preferred stock financing, and (ii) 87.5% of the lowest price per share paid by the investors purchasing the preferred stock issued in such financing in cash (Financing Conversion Price). |
• | Qualified IPO Conversion: the lesser of (i) $2.3 billion divided by the number of outstanding shares of Sonder’s common stock on a fully diluted basis, and (ii) 87.5% of the price to the public in the Qualified IPO. |
• | Qualified Public Transaction Conversion – Qualified SPAC: the lesser of (i) $2.3 billion divided by the number of outstanding shares of Sonder’s common stock on a fully diluted basis, and (ii) 87.5% of the amount obtained by dividing the enterprise value of Sonder by the number of outstanding shares of Sonder’s common stock on a fully diluted basis. |
Three Months Ended June 30, 2021 |
Six Months Ended June 30, 2021 |
|||||||
Effective Interest Rate |
35.83 | % | 35.83 | % | ||||
Contractually Stated Interest Expense |
$ | 0.4 | $ | 0.5 | ||||
Amortization of discount |
$ | 10.6 | $ | 12.7 |
Type of Warrant |
Number Outstanding |
Issuance Date |
Exercise Price |
Expiration Date |
||||||||||||
Series A |
59,440 | 10/20/2016 | $ | 1.36 | 10/20/2026 | |||||||||||
Series B |
57,696 | 1/30/2018 | $ | 2.40 | 1/30/2028 | |||||||||||
Series C |
218,417 | 12/28/2018 | $ | 5.04 | 12/28/2025 | |||||||||||
Series D |
71,456 | 2/21/2020 | $ | 10.50 | 2/21/2027 |
Year Ended December 31, |
Amount |
|||
remaining six months of 2021 |
$ | 102,219 | ||
2022 |
282,964 | |||
2023 |
349,486 | |||
2024 |
372,182 | |||
2025 |
366,558 | |||
Thereafter |
1,631,087 | |||
|
|
|||
Total minimum future lease payments |
$ | 3,104,496 | ||
|
|
June 30, 2021 |
||||||||||||||||||||
Shares Authorized |
Shares Issued and Outstanding |
Issuance Price Per Share |
Net Carrying Value |
Aggregate Liquidation Preference |
||||||||||||||||
Series AA Common |
22,517,608 | 9,437,358 | $ | — | $ | — | $ | — | ||||||||||||
Series Seed 1 |
2,588,866 | 2,588,866 | 0.53 | 1,359 | 1,372 | |||||||||||||||
Series Seed 2 |
1,209,160 | 1,209,160 | 0.50 | 606 | 605 | |||||||||||||||
Series Seed 3 |
704,380 | 704,380 | 1.09 | 787 | 768 | |||||||||||||||
Series A |
183,420 | 183,420 | 1.36 | 250 | 250 | |||||||||||||||
Series B |
2,335,500 | 2,335,500 | 2.40 | 5,610 | 5,605 | |||||||||||||||
Series C |
3,175,207 | 3,175,207 | 5.04 | 15,991 | 16,003 | |||||||||||||||
Series D |
2,057,926 | 1,962,652 | 10.50 | 20,600 | 20,608 | |||||||||||||||
Series E |
420,570 | 420,570 | 10.77 | 4,530 | 4,530 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total exchangeable shares |
35,192,637 | 22,017,113 | — | $ | 49,733 | $ | 49,741 |
December 31, 2020 |
||||||||||||||||||||
Shares Authorized |
Shares Issued and Outstanding |
Issuance Price Per Share |
Net Carrying Value |
Aggregate Liquidation Preference |
||||||||||||||||
Series AA Common |
22,517,608 | 9,437,358 | $ | — | $ | — | $ | — | ||||||||||||
Series Seed 1 |
2,588,866 | 2,588,866 | 0.53 | 1,359 | 1,372 | |||||||||||||||
Series Seed 2 |
1,209,160 | 1,209,160 | 0.50 | 606 | 605 | |||||||||||||||
Series Seed 3 |
704,380 | 704,380 | 1.09 | 787 | 768 | |||||||||||||||
Series A |
183,420 | 183,420 | 1.36 | 250 | 250 | |||||||||||||||
Series B |
2,335,500 | 2,335,500 | 2.40 | 5,610 | 5,605 | |||||||||||||||
Series C |
3,175,207 | 3,175,207 | 5.04 | 15,991 | 16,003 | |||||||||||||||
Series D |
2,057,926 | 1,962,652 | 10.50 | 20,600 | 20,608 | |||||||||||||||
Series E |
420,570 | 420,570 | 10.77 | 4,530 | 4,530 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total exchangeable shares |
35,192,637 | 22,017,113 | — | $ | 49,733 | $ | 49,741 |
June 30, 2021 |
||||||||||||||||||||
Shares Authorized |
Shares Issued and Outstanding |
Issuance Price Per Share |
Net Carrying Value |
Aggregate Liquidation Preference |
||||||||||||||||
Series Seed 1 |
3,702,526 | 785,420 | $ | 0.53 | $ | 269 | $ | 416 | ||||||||||||
Series Seed 1-A |
3,702,526 | 328,240 | 0.53 | 174 | 174 | |||||||||||||||
Series Seed 2 |
1,719,560 | 470,994 | 0.50 | 222 | 235 | |||||||||||||||
Series Seed 2-A |
1,719,560 | 39,406 | 0.50 | 20 | 20 | |||||||||||||||
Series Seed 3 |
704,380 | — | 1.09 | — | — | |||||||||||||||
Series Seed 3-A |
704,380 | — | 1.09 | — | — | |||||||||||||||
Series A |
7,023,193 | 6,780,333 | 1.36 | 9,241 | 9,221 | |||||||||||||||
Series A-1 |
7,023,193 | — | 1.36 | — | — | |||||||||||||||
Series B |
15,611,276 | 13,218,080 | 2.40 | 27,105 | 31,723 | |||||||||||||||
Series B-1 |
15,611,276 | — | 2.40 | — | — | |||||||||||||||
Series C |
19,070,648 | 12,143,631 | 5.04 | 56,496 | 61,204 | |||||||||||||||
Series C-1 |
19,070,648 | 3,513,536 | 5.04 | 17,708 | 17,708 | |||||||||||||||
Series D |
21,603,476 | 3,472,366 | 10.50 | 35,808 | 36,460 | |||||||||||||||
Series D-1 |
21,603,476 | 16,049,365 | 10.50 | 168,518 | 168,518 | |||||||||||||||
Series E |
34,932,992 | 18,956,184 | 10.77 | 203,189 | 204,159 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total redeemable convertible preferred stock |
173,803,110 | 75,757,555 | — | $ | 518,750 | $ | 529,838 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
December 31, 2020 |
||||||||||||||||||||
Shares Authorized |
Shares Issued and Outstanding |
Issuance Price Per Share |
Net Carrying Value |
Aggregate Liquidation Preference |
||||||||||||||||
Series Seed 1 |
3,702,526 | 1,113,660 | $ | 0.53 | $ | 443 | $ | 590 | ||||||||||||
Series Seed 1-A |
3,702,526 | — | $ | 0.53 | — | — | ||||||||||||||
Series Seed 2 |
1,719,560 | 510,400 | 0.50 | 242 | 255 | |||||||||||||||
Series Seed 2-A |
1,719,560 | — | 0.50 | — | — | |||||||||||||||
Series Seed 3 |
704,380 | — | 1.09 | — | — | |||||||||||||||
Series Seed 3-A |
704,380 | — | 1.09 | — | — | |||||||||||||||
Series A |
7,023,193 | 6,780,333 | 1.36 | 9,241 | 9,221 | |||||||||||||||
Series A-1 |
7,023,193 | — | 1.36 | — | — | |||||||||||||||
Series B |
15,611,276 | 13,218,080 | 2.40 | 27,105 | 31,723 | |||||||||||||||
Series B-1 |
15,611,276 | — | 2.40 | — | — | |||||||||||||||
Series C |
19,070,648 | 15,657,167 | 5.04 | 74,204 | 78,912 | |||||||||||||||
Series C-1 |
19,070,648 | — | 5.04 | — | — | |||||||||||||||
Series D |
21,603,476 | 16,663,497 | 10.50 | 174,315 | 174,967 | |||||||||||||||
Series D-1 |
21,603,476 | 2,858,234 | 10.50 | 30,011 | 30,011 | |||||||||||||||
Series E |
20,432,992 | 18,863,308 | 10.77 | 202,169 | 203,158 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total redeemable convertible preferred stock |
159,303,110 | 75,664,679 | — | $ | 517,730 | $ | 528,837 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
• | The Senior Preferred Stock then outstanding shall be entitled to be paid out of the assets of Sonder available for distribution to Sonder’s stockholders before any payment shall be made to the holders of the Junior Preferred Stock or Common Stock, an amount per share equal to the greater of (i) the applicable original issue price of such series of Senior Preferred Stock, plus any dividends declared but unpaid thereon or (ii) such amount per share as would have been payable had all shares of each series of the Senior Preferred Stock that would have received a greater amount upon conversion into common stock in accordance with Sonder’s certificate of incorporation immediately prior to the Liquidation Event. |
• | After the payment of all preferential amounts required to be paid to the holders of the Senior Preferred Stock, the holders of shares of Junior Preferred Stock then outstanding are entitled to be paid out of the assets of Sonder available for distribution to its stockholders before any payment shall be made to the holders of common stock, an amount per share equal to the greater of (i) the applicable original issue price of such series of Junior Preferred Stock, plus any dividends declared but unpaid thereon or (ii) such amount per share as would have been payable had all shares of each series of the Junior Preferred Stock that would have received a greater amount upon conversion into common stock in accordance with Sonder’s certificate of incorporation immediately prior to the Liquidation Event. |
• | After the payment of all preferential amounts required to be paid to the holders of Senior Preferred Stock and Junior Preferred Stock, the remaining assets of Sonder available for distribution to its stockholders shall be distributed among the holders of common stock, pro rata based on the number of shares held by each such holder. |
June 30, 2021 |
December 31, 2020 |
|||||||
Conversion of preferred stock and exchangeable shares (1) |
208,995,747 | 194,495,747 | ||||||
Outstanding stock options |
17,099,526 | 12,802,899 | ||||||
Options available for grant under the 2019 Equity Incentive Plan |
1,225,272 | 3,413,074 | ||||||
|
|
|
|
|||||
Total common stock reserved for future issuance |
227,320,545 | 210,711,720 | ||||||
|
|
|
|
(1) | Includes the warrants reclassified to equity as of December 31, 2019 and those issued in connection with the 2018 Loan and Security Agreement and related amendment as of June 30, 2021 and December 31, 2020. |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Operations and support |
$ | 534 | $ | 522 | $ | 940 | $ | 1,259 | ||||||||
General and administrative |
1,628 | 918 | 15,119 | 2,692 | ||||||||||||
Research and development |
286 | 302 | 541 | 857 | ||||||||||||
Sales and marketing |
— | — | 1 | 1 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total stock-based compensation expense |
$ | 2,448 | $ | 1,742 | $ | 16,601 | $ | 4,809 | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
Six Months Ended June 30, | |||||
2020 |
2021 |
2020 | ||||
Expected term (in years) |
5.79 | 3.99 | 5.79 | |||
Expected volatility |
67% | 64% | 63% - 67% | |||
Dividend yield |
— % | — % | — % | |||
Risk-free interest Rate |
0.44% | 0.41% | 0.44% - 1.46% | |||
Weighted-average grant-date fair value per share |
$2.69 | $4.54 | $2.56 - $2.69 |
• | 1,530,897 performance awards upon an initial public offering (“IPO”) if Sonder reaches certain share price targets (the “IPO Condition”); |
• | 1,020,598 performance awards upon a qualified financing at certain valuation milestones (the “Qualified Financing Condition”); and |
• | 1,020,598 performance awards upon Sonder achieving a certain market capitalization milestone (the “Market Capitalization Condition”). |
/s/ DELOITTE & TOUCHE LLP |
San Francisco, California |
July 6, 2021 |
We have served as Sonder’s auditor since 2019. |
December 31, 2020 |
December 31, 2019 |
|||||||
Assets |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ | 121,467 | $ | 110,916 | ||||
Restricted cash |
1,641 | 3,330 | ||||||
Accounts receivable, net of allowance of $2,570 and $2,503 at December 31, 2020 and 2019, respectively |
1,774 | 5,995 | ||||||
Prepaid rent |
9,907 | 13,882 | ||||||
Prepaid expenses |
3,112 | 3,655 | ||||||
Other current assets |
8,375 | 3,190 | ||||||
|
|
|
|
|||||
Total current assets |
146,276 | 140,968 | ||||||
Property and equipment, net |
24,204 | 30,102 | ||||||
Other non-current assets |
7,041 | 8,190 | ||||||
|
|
|
|
|||||
Total assets |
$ | 177,521 | $ | 179,260 | ||||
|
|
|
|
|||||
Liabilities, mezzanine equity and stockholders’ deficit |
||||||||
Current liabilities |
||||||||
Accounts payable |
$ | 10,915 | $ | 7,114 | ||||
Accrued liabilities |
8,248 | 8,909 | ||||||
Sales tax payable |
6,880 | 4,656 | ||||||
Deferred revenue |
10,203 | 6,863 | ||||||
Current portion of long-term debt |
17,038 | 5,753 | ||||||
Other current liabilities |
917 | 197 | ||||||
|
|
|
|
|||||
Total current liabilities |
54,201 | 33,492 | ||||||
Deferred rent |
28,760 | 25,172 | ||||||
Long-term debt |
25,022 | 18,274 | ||||||
Other non-current liabilities |
2,935 | 822 | ||||||
|
|
|
|
|||||
Total liabilities |
110,918 | 77,760 | ||||||
Commitments and contingencies (Note 10) |
||||||||
Mezzanine equity: |
||||||||
Redeemable convertible preferred stock, 159,303,110 and 138,679,570 shares authorized at December 31, 2020 and 2019, respectively; 75,664,679 shares and 56,753,734 shares issued and outstanding at December 31, 2020 and 2019, respectively; aggregate liquidation preference of $528,837 and $325,179 at December 31, 2020 and 2019, respectively |
517,730 | 314,967 | ||||||
Exchangeable preferred stock, 12,675,029 and 12,254,459 shares authorized at December 31, 2020 and 2019, respectively; 12,579,755 shares and 12,159,185 shares issued and outstanding at December 31, 2020 and 2019, respectively; aggregate liquidation preference of $49,741 and $45,211 at December 31, 2020 and 2019, respectively |
49,733 | 45,203 | ||||||
|
|
|
|
|||||
Total mezzanine equity |
567,463 | 360,170 | ||||||
Stockholders’ deficit: |
||||||||
Common stock, $.000001 par value—128,734,881 and 107,168,070 shares authorized at December 31, 2020 and 2019, respectively; 7,169,758 and 5,705,570 shares issued and outstanding at December 31, 2020 and 2019, respectively |
1 | 1 | ||||||
Exchangeable AA stock, 22,517,608 and 22,254,459 shares authorized at December 31, 2020 and 2019, respectively; 9,437,358 and 9,842,579 shares issued and outstanding at December 31, 2020 and 2019, respectively |
— | — | ||||||
Additional paid-in capital |
13,898 | 5,032 | ||||||
Cumulative translation adjustment |
5,666 | 6,406 | ||||||
Accumulated deficit |
(520,425 | ) | (270,109 | ) | ||||
|
|
|
|
|||||
Total stockholders’ deficit |
(500,860 | ) | (258,670 | ) | ||||
|
|
|
|
|||||
Total liabilities, mezzanine equity, and stockholders’ deficit |
$ | 177,521 | $ | 179,260 | ||||
|
|
|
|
Years Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Revenue |
$ | 115,678 | $ | 142,910 | ||||
Cost of revenue (excluding depreciation and amortization) |
136,995 | 124,866 | ||||||
Operations and support |
115,072 | 105,401 | ||||||
General and administrative |
77,033 | 60,894 | ||||||
Research and development |
17,552 | 15,737 | ||||||
Sales and marketing |
12,848 | 7,115 | ||||||
|
|
|
|
|||||
Total costs and expenses |
359,500 | 314,013 | ||||||
Loss from operations |
(243,822 | ) | (171,103 | ) | ||||
Interest expense, net and other (income) expense, net: |
||||||||
Interest expense, net |
6,402 | 1,133 | ||||||
Other (income) expense, net |
(231 | ) | 6,013 | |||||
|
|
|
|
|||||
Total interest expense, net and other (income) expense, net |
6,171 | 7,146 | ||||||
|
|
|
|
|||||
Loss before income taxes |
(249,993 | ) | (178,249 | ) | ||||
|
|
|
|
|||||
Provision for income taxes |
323 | — | ||||||
|
|
|
|
|||||
Net loss |
(250,316 | ) | (178,249 | ) | ||||
|
|
|
|
|||||
Net loss per share, basic and diluted |
$ | (39.98 | ) | $ | (18.04 | ) | ||
|
|
|
|
|||||
Weighted average shares outstanding of common stock, basic and diluted |
6,261,247 | 9,878,239 | ||||||
|
|
|
|
|||||
Other comprehensive loss: |
||||||||
Net loss |
(250,316 | ) | (178,249 | ) | ||||
Change in foreign currency translation adjustment |
(740 | ) | 6,284 | |||||
|
|
|
|
|||||
Comprehensive loss |
$ | (251,056 | ) | $ | (171,965 | ) | ||
|
|
|
|
Redeemable Convertible Preferred Stock |
Exchangeable Preferred Stock |
Common Stock |
Exchangeable AA Stock |
Additional Paid-in Capital |
Accumulated Other Comprehensive Income (loss) |
Accumulated Deficit |
Total Stockholders’ Deficit |
|||||||||||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Par Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||||||||||
Balances as of December 31, 2018 |
47,476,173 | $ | 135,506 | — | $ | — | 9,426,463 | $ | — | — | $ | — | $ | 856 | $ | 122 | $ | (91,860 | ) | $ | (90,882 | ) | ||||||||||||||||||||||||||
Issuance of Series D Redeemable Convertible Preferred Stock, net of issuance costs |
21,436,746 | $ | 224,664 | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Exchangeable Stock conversion in connection with the corporate inversion |
(12,159,185 | ) | (45,203 | ) | 12,159,185 | 45,203 | (9,842,579 | ) | — | 9,842,579 | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options |
— | — | — | — | 6,121,686 | 1 | — | — | 737 | — | — | 738 | ||||||||||||||||||||||||||||||||||||
Stock-based compensation |
— | — | — | — | — | — | — | — | 3,380 | — | — | 3,380 | ||||||||||||||||||||||||||||||||||||
Issuance of warrants |
— | — | — | — | — | — | — | — | 59 | — | — | 59 | ||||||||||||||||||||||||||||||||||||
Components of comprehensive income: |
||||||||||||||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | — | (178,249 | ) | (178,249 | ) | ||||||||||||||||||||||||||||||||||
Other comprehensive loss |
— | — | — | — | — | — | — | — | — | 6,284 | — | 6,284 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Balances as of December 31, 2019 |
56,753,734 | $ | 314,967 | 12,159,185 | $ | 45,203 | 5,705,570 | 1 | 9,842,579 | — | 5,032 | 6,406 | (270,109 | ) | (258,670 | ) | ||||||||||||||||||||||||||||||||
Series D Redeemable convertible Preferred Stock extension round |
47,637 | 594 | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Issuance of Series E Redeemable Convertible Preferred Stock, net of issuance costs |
18,863,308 | 202,169 | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Issuance of Exchangeable Series E Preferred Stock, net of issuance costs |
— | — | 420,570 | 4,530 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Exchange of Series AA Special Voting shares for common stock |
— | — | — | — | 405,221 | — | (405,221 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options |
— | — | — | — | 1,058,967 | — | — | — | 1,643 | — | — | 1,643 | ||||||||||||||||||||||||||||||||||||
Stock-based compensation |
— | — | — | — | — | — | — | — | 7,223 | — | — | 7,223 | ||||||||||||||||||||||||||||||||||||
Components of comprehensive loss: |
||||||||||||||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | — | (250,316 | ) | (250,316 | ) | ||||||||||||||||||||||||||||||||||
Other comprehensive loss |
— | — | — | — | — | — | — | — | — | (740 | ) | — | (740 | ) | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Balances as of December 31, 2020 |
75,664,679 | $ | 517,730 | 12,579,755 | $ | 49,733 | 7,169,758 | $ | 1 | 9,437,358 | $ | — | $ | 13,898 | $ | 5,666 | $ | (520,425 | ) | $ | (500,860 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Cash flows from operating activities |
||||||||
Net loss |
$ | (250,316 | ) | $ | (178,249 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Depreciation and amortization |
16,969 | 11,167 | ||||||
Share-based compensation |
7,223 | 3,380 | ||||||
Bad debt expense |
2,567 | 1,217 | ||||||
Write-off of capital assets |
3,782 | (2 | ) | |||||
Straight-line rent |
1,821 | 21,890 | ||||||
Unrealized (gain) loss on foreign currency transactions |
(245 | ) | 3,298 | |||||
Amortization of debt issuance costs |
716 | 244 | ||||||
Fair value of warrants |
26 | 278 | ||||||
Other adjustments to net loss |
(14 | ) | 58 | |||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
1,681 | 1,220 | ||||||
Prepaid rent |
4,121 | (9,361 | ) | |||||
Prepaid expenses |
552 | (1,591 | ) | |||||
Other current assets |
(5,058 | ) | (2,369 | ) | ||||
Other non-current assets |
1,193 | (3,776 | ) | |||||
Accounts payable |
3,668 | 1,924 | ||||||
Accrued liabilities |
(590 | ) | 7,051 | |||||
Sales tax payable |
2,062 | 3,596 | ||||||
Deferred revenue |
4,841 | 4,120 | ||||||
Other current liabilities |
237 | — | ||||||
Other non-current liabilities |
2,262 | 45 | ||||||
|
|
|
|
|||||
Net cash used in operating activities |
(202,502 | ) | (135,860 | ) | ||||
Cash flows from investing activities |
||||||||
Purchases of property and equipment |
(12,247 | ) | (22,561 | ) | ||||
Development of internal-use software |
(2,603 | ) | (1,696 | ) | ||||
|
|
|
|
|||||
Net cash used in investing activities |
(14,850 | ) | (24,257 | ) | ||||
Cash flows from financing activities |
||||||||
Repayment of debt |
(6,741 | ) | (13,750 | ) | ||||
Proceeds from debt financing, net |
24,366 | 7,063 | ||||||
Proceeds from exercise of stock options |
1,643 | 738 | ||||||
Issuance of redeemable convertible preferred stock, net |
207,293 | 224,664 | ||||||
|
|
|
|
|||||
Net cash provided by financing activities |
226,561 | 218,715 | ||||||
Effects of foreign exchange on cash |
(347 | ) | 2,279 | |||||
Net change in cash, cash equivalents, and restricted cash |
8,862 | 60,877 | ||||||
Cash, cash equivalents, and restricted cash at the beginning of year |
114,246 | 53,369 | ||||||
|
|
|
|
|||||
Cash, cash equivalents, and restricted cash at end of year |
$ | 123,108 | $ | 114,246 | ||||
|
|
|
|
Years Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Supplemental disclosures of cash flow information: |
||||||||
Cash paid for income taxes |
$ | 100 | $ | 3 | ||||
Cash paid for interest |
$ | 5,428 | $ | 3,509 | ||||
Reconciliation of cash, cash equivalents, and restricted cash: |
||||||||
Cash and cash equivalents |
$ | 121,467 | $ | 110,916 | ||||
Restricted cash |
$ | 1,641 | $ | 3,330 | ||||
|
|
|
|
|||||
Total cash, cash equivalents, and restricted cash |
$ | 123,108 | $ | 114,246 | ||||
|
|
|
|
Classification |
Useful Life |
|||
Furniture and fixtures |
3 years | |||
Computers, equipment, and software |
3 years | |||
Internal-use software |
2 years | |||
Leasehold improvements |
|
Shorter of remaining lease term or the estimated useful life of 3 years |
|
Year Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Direct revenue |
$ | 59,340 | $ | 46,779 | ||||
Indirect revenue |
56,338 | 96,131 | ||||||
|
|
|
|
|||||
Total revenue |
$ | 115,678 | $ | 142,910 | ||||
|
|
|
|
Year Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Revenue: |
||||||||
Americas |
||||||||
United States |
$ | 85,891 | $ | 113,567 | ||||
Other Americas |
5,520 | 7,661 | ||||||
|
|
|
|
|||||
Total Americas |
91,411 | 121,228 | ||||||
Europe, Middle East, and Africa (EMEA) |
||||||||
Great Britain |
8,607 | 16,139 | ||||||
United Arab Emirates |
10,328 | 1,787 | ||||||
Other EMEA |
5,332 | 3,756 | ||||||
|
|
|
|
|||||
Total EMEA |
24,267 | 21,682 | ||||||
|
|
|
|
|||||
Total revenue |
$ | 115,678 | $ | 142,910 | ||||
|
|
|
|
Year Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Beginning balance |
$ | 2,503 | $ | 1,292 | ||||
Additions |
2,577 | 1,211 | ||||||
Write-offs, net of recoveries |
2,510 | — | ||||||
|
|
|
|
|||||
Ending balance |
$ | 2,570 | $ | 2,503 | ||||
|
|
|
|
December 31, |
||||||||
2020 |
2019 |
|||||||
Accrued compensation |
$ | 3,269 | $ | 3,817 | ||||
Accrued legal expenses |
1,606 | 2,602 | ||||||
Accrued other liabilities |
3,373 | 2,490 | ||||||
|
|
|
|
|||||
Total accrued liabilities |
$ | 8,248 | $ | 8,909 | ||||
|
|
|
|
Level 3 |
||||||||
December 31, |
||||||||
2020 |
2019 |
|||||||
Financial liabilities: |
||||||||
Other non-current liabilities: |
||||||||
Preferred stock warrant liabilities |
$ | 1,140 | $ | 822 | ||||
|
|
|
|
|||||
Total financial liabilities measured and recorded at fair value |
$ | 1,140 | $ | 822 | ||||
|
|
|
|
Level 3 |
||||||||
December 31, |
||||||||
2020 |
2019 |
|||||||
Beginning balance |
$ | 822 | $ | — | ||||
Additions for new instruments issued |
292 | 544 | ||||||
Increase in fair value of preferred stock warrants |
26 | 278 | ||||||
|
|
|
|
|||||
Total financial liabilities measured and recorded at fair value |
$ | 1,140 | $ | 822 | ||||
|
|
|
|
December 31, |
||||||||
2020 |
2019 |
|||||||
Furniture and fixtures |
$ | 41,092 | $ | 38,863 | ||||
Computers, equipment, and software |
4,361 | 4,024 | ||||||
Internal-use software |
7,023 | 7,232 | ||||||
Leasehold improvements |
179 | 222 | ||||||
|
|
|
|
|||||
Property and equipment |
52,655 | 50,341 | ||||||
Less accumulated depreciation |
(28,451 | ) | (20,239 | ) | ||||
|
|
|
|
|||||
Property and equipment, net |
$ | 24,204 | $ | 30,102 | ||||
|
|
|
|
Type of Warrant |
Number Outstanding |
Issuance Date |
Exercise Price |
Expiration Date |
||||||||||||
Series A |
59,440 | 10/20/2016 | $ | 1.36 | 10/20/2026 | |||||||||||
Series B |
57,696 | 1/30/2018 | $ | 2.40 | 1/30/2028 | |||||||||||
Series C |
218,417 | 12/28/2018 | $ | 5.04 | 12/28/2025 | |||||||||||
Series D |
71,456 | 2/21/2020 | $ | 10.50 | 2/21/2027 |
Years Ended December 31, |
Amount |
|||
2021 |
$ | 200,157 | ||
2022 |
274,010 | |||
2023 |
317,339 | |||
2024 |
322,268 | |||
2025 |
296,205 | |||
Thereafter |
1,117,893 | |||
|
|
|||
Total minimum future lease payments |
$ | 2,527,872 | ||
|
|
December 31, 2020 |
||||||||||||||||||||
Shares Authorized |
Shares Issued and Outstanding |
Issuance Price Per Share |
Net Carrying Value |
Aggregate Liquidation Preference |
||||||||||||||||
Series AA Common |
22,517,608 | 9,437,358 | $ | — | $ | — | $ | — | ||||||||||||
Series Seed 1 |
2,588,866 | 2,588,866 | 0.53 | 1,359 | 1,372 | |||||||||||||||
Series Seed 2 |
1,209,160 | 1,209,160 | 0.50 | 606 | 605 | |||||||||||||||
Series Seed 3 |
704,380 | 704,380 | 1.09 | 787 | 768 | |||||||||||||||
Series A |
183,420 | 183,420 | 1.36 | 250 | 250 | |||||||||||||||
Series B |
2,335,500 | 2,335,500 | 2.40 | 5,610 | 5,605 | |||||||||||||||
Series C |
3,175,207 | 3,175,207 | 5.04 | 15,991 | 16,003 | |||||||||||||||
Series D |
2,057,926 | 1,962,652 | 10.50 | 20,600 | 20,608 | |||||||||||||||
Series E |
420,570 | 420,570 | 10.77 | 4,530 | 4,530 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total exchangeable shares |
35,192,637 | 22,017,113 | $ | 49,733 | $ | 49,741 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
December 31, 2019 |
||||||||||||||||||||
Shares Authorized |
Shares Issued and Outstanding |
Issuance Price Per Share |
Net Carrying Value |
Aggregate Liquidation Preference |
||||||||||||||||
Series AA Common |
22,254,459 | 9,842,579 | $ | — | $ | — | $ | — | ||||||||||||
Series Seed 1 |
2,588,866 | 2,588,866 | 0.53 | 1,359 | 1,372 | |||||||||||||||
Series Seed 2 |
1,209,160 | 1,209,160 | 0.50 | 606 | 605 | |||||||||||||||
Series Seed 3 |
704,380 | 704,380 | 1.09 | 787 | 768 | |||||||||||||||
Series A |
183,420 | 183,420 | 1.36 | 250 | 250 | |||||||||||||||
Series B |
2,335,500 | 2,335,500 | 2.40 | 5,610 | 5,605 | |||||||||||||||
Series C |
3,175,207 | 3,175,207 | 5.04 | 15,991 | 16,003 | |||||||||||||||
Series D |
2,057,926 | 1,962,652 | 10.50 | 20,600 | 20,608 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total exchangeable shares |
34,508,918 | 22,001,764 | $ | 45,203 | $ | 45,211 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
December 31, 2020 |
||||||||||||||||||||
Shares Authorized |
Shares Issued and Outstanding |
Issuance Price Per Share |
Net Carrying Value |
Aggregate Liquidation Preference |
||||||||||||||||
Series Seed 1 |
3,702,526 | 1,113,660 | $ | 0.53 | $ | 443 | $ | 590 | ||||||||||||
Series Seed 1-A |
3,702,526 | — | 0.53 | — | — | |||||||||||||||
Series Seed 2 |
1,719,560 | 510,400 | 0.50 | 242 | 255 | |||||||||||||||
Series Seed 2-A |
1,719,560 | — | 0.50 | — | — | |||||||||||||||
Series Seed 3 |
704,380 | — | 1.09 | — | — | |||||||||||||||
Series Seed 3-A |
704,380 | — | 1.09 | — | — | |||||||||||||||
Series A |
7,023,193 | 6,780,333 | 1.36 | 9,241 | 9,221 | |||||||||||||||
Series A-1 |
7,023,193 | — | 1.36 | — | — | |||||||||||||||
Series B |
15,611,276 | 13,218,080 | 2.40 | 27,105 | 31,723 | |||||||||||||||
Series B-1 |
15,611,276 | — | 2.40 | — | — | |||||||||||||||
Series C |
19,070,648 | 15,657,167 | 5.04 | 74,204 | 78,912 | |||||||||||||||
Series C-1 |
19,070,648 | — | 5.04 | — | — | |||||||||||||||
Series D |
21,603,476 | 16,663,497 | 10.50 | 174,315 | 174,967 | |||||||||||||||
Series D-1 |
21,603,476 | 2,858,234 | 10.50 | 30,011 | 30,011 | |||||||||||||||
Series E |
20,432,992 | 18,863,308 | 10.77 | 202,169 | 203,158 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total redeemable convertible preferred stock |
159,303,110 | 75,664,679 | $ | 517,730 | $ | 528,837 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
December 31, 2019 |
||||||||||||||||||||
Shares Authorized |
Shares Issued and Outstanding |
Issuance Price Per Share |
Net Carrying Value |
Aggregate Liquidation Preference |
||||||||||||||||
Series Seed 1 |
3,702,526 | 1,113,660 | $ | 0.53 | $ | 443 | $ | 590 | ||||||||||||
Series Seed 1-A |
3,702,526 | — | 0.53 | — | — | |||||||||||||||
Series Seed 2 |
1,719,560 | 510,400 | 0.50 | 242 | 255 | |||||||||||||||
Series Seed 2-A |
1,719,560 | — | 0.50 | — | — | |||||||||||||||
Series Seed 3 |
704,380 | — | 1.09 | — | — | |||||||||||||||
Series Seed 3-A |
704,380 | — | 1.09 | — | — | |||||||||||||||
Series A |
7,023,193 | 6,780,333 | 1.36 | 9,241 | 9,221 | |||||||||||||||
Series A-1 |
7,023,193 | — | 1.36 | — | — | |||||||||||||||
Series B |
15,611,276 | 13,218,080 | 2.40 | 27,105 | 31,723 | |||||||||||||||
Series B-1 |
15,611,276 | — | 2.40 | — | — | |||||||||||||||
Series C |
19,070,648 | 15,657,167 | 5.04 | 74,204 | 78,912 | |||||||||||||||
Series C-1 |
19,070,648 | — | 5.04 | — | — | |||||||||||||||
Series D |
21,508,202 | 19,474,094 | 10.50 | 203,732 | 204,478 | |||||||||||||||
Series D-1 |
21,508,202 | — | 10.50 | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total redeemable convertible preferred stock |
138,679,570 | 56,753,734 | $ | 314,967 | $ | 325,179 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
• | The Senior Preferred Stock then outstanding shall be entitled to be paid out of the assets of Sonder available for distribution to Sonder’s stockholders before any payment shall be made to the holders of the Junior Preferred Stock or Common Stock, an amount per share equal to the greater of (i) the applicable original issue price of such series of Senior Preferred Stock, plus any dividends declared but unpaid thereon or (ii) such amount per share as would have been payable had all shares of each series of the Senior Preferred Stock that would have received a greater amount upon conversion into common stock in accordance with Sonder’s certificate of incorporation immediately prior to the Liquidation Event. |
• | After the payment of all preferential amounts required to be paid to the holders of the Senior Preferred Stock, the holders of shares of Junior Preferred Stock then outstanding are entitled to be paid out of the assets of Sonder available for distribution to its stockholders before any payment shall be made to the holders of common stock, an amount per share equal to the greater of (i) the applicable original issue price of such series of Junior Preferred Stock, plus any dividends declared but unpaid thereon or (ii) such amount per share as would have been payable had all shares of each series of the Junior Preferred Stock that would have received a greater amount upon conversion into common stock in accordance with Sonder’s certificate of incorporation immediately prior to the Liquidation Event. |
• | After the payment of all preferential amounts required to be paid to the holders of Senior Preferred Stock and Junior Preferred Stock, the remaining assets of Sonder available for distribution to its stockholders shall be distributed among the holders of common stock, pro rata based on the number of shares held by each such holder. |
December 31, |
||||||||
2020 |
2019 |
|||||||
Conversion of preferred stock and exchangeable shares (1) |
194,495,747 | 173,188,488 | ||||||
Outstanding stock options |
12,802,899 | 10,633,972 | ||||||
Options available for grant under the 2019 Equity Incentive Plan |
3,413,074 | 6,526,981 | ||||||
|
|
|
|
|||||
Total common stock reserved for future issuance |
210,711,720 | 190,349,441 | ||||||
|
|
|
|
(1) | Includes the warrants reclassified to equity as of December 31, 2019 and those issued in connection with the 2018 Loan and Security Agreement and related amendment as of December 31, 2020 and 2019. |
Years Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Research and development |
$ | 1,171 | $ | 459 | ||||
General and administrative |
4,336 | 2,447 | ||||||
Operations and support |
1,710 | 471 | ||||||
Sales and marketing |
6 | 3 | ||||||
|
|
|
|
|||||
Total stock-based compensation expense |
$ | 7,223 | $ | 3,380 | ||||
|
|
|
|
Years Ended December 31, | ||||
2020 |
2019 | |||
Expected term (in years) |
5.79 | 5.00 - 6.25 | ||
Expected volatility |
63% - 69% |
33% - 35% | ||
Dividend yield |
—% | —% | ||
Risk-free interest rate |
0.4% - 1.5% |
1.6% - 2.6% | ||
Weighted-average grant-date fair value per share |
$2.51 - $2.77 |
$1.47 - $1.62 |
Options Outstanding |
||||||||||||||||
Number of Options |
Weighted- Average Exercise Price per Option |
Weighted- Average Remaining Contractual Term |
Aggregate Intrinsic Value |
|||||||||||||
Balance as of December 31, 2019 |
10,633 | $ | 2.52 | 8.28 | $ | 20,195 | ||||||||||
Grants |
5,829 | $ | 4.58 | |||||||||||||
Exercises |
(1,093 | ) | $ | 1.85 | ||||||||||||
Forfeited |
(2,122 | ) | $ | 3.21 | ||||||||||||
Canceled |
(444 | ) | $ | 2.16 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance as of December 31, 2020 |
12,803 | $ | 3.02 | 7.97 | $ | 19,219 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
As of December 31, 2020 |
||||||||||||||||
Options vested and exercisable |
4,827 | $ | 2.47 | 6.54 | $ | 11,798 | ||||||||||
Options vested and expected to vest |
12,803 | $ | 3.02 | 7.97 | $ | 19,219 |
• | 1,530,897 performance awards upon an initial public offering (“IPO”) if Sonder reaches certain share price targets (the “IPO Condition”); |
• | 1,020,598 performance awards upon a qualified financing at certain valuation milestones (the “Qualified Financing Condition”); and |
• | 1,020,598 performance awards upon Sonder achieving a certain market capitalization milestone (the “Market Capitalization Condition”). |
December 31, 2020 |
||||
State |
$ | 104 | ||
Foreign |
219 | |||
|
|
|||
Total provision for income taxes |
$ | 323 | ||
|
|
Years Ended December 31, |
||||||||
2020 |
2019 |
|||||||
United States |
($ | 148,332 | ) | ($ | 84,426 | ) | ||
Foreign |
(101,661 | ) | (93,823 | ) | ||||
|
|
|
|
|||||
Total loss before provision for income taxes |
($ | 249,993 | ) | ($ | 178,249 | ) | ||
|
|
|
|
Years Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Income tax at U.S. statutory rate of 21% |
$ | (52,499 | ) | $ | (36,582 | ) | ||
Foreign tax rate differential |
(889 | ) | (843 | ) | ||||
State income taxes (net of federal benefit) |
(8,553 | ) | (4,706 | ) | ||||
Tax credits |
(1,214 | ) | — | |||||
Stock-based compensation |
66 | 694 | ||||||
Non-deductible expenses |
221 | 818 | ||||||
Other, net |
(1 | ) | 5,545 | |||||
Change in valuation allowance |
63,192 | 35,074 | ||||||
|
|
|
|
|||||
Total provision for income taxes |
$ | 323 | $ | — | ||||
|
|
|
|
Years Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Deferred tax assets: |
||||||||
Federal and state net operating losses |
$ | 85,972 | $ | 29,916 | ||||
Credit carryforwards |
2,239 | 28 | ||||||
Accrued expenses and reserves |
847 | 498 | ||||||
Deferred revenue |
2,520 | 1,429 | ||||||
Deferred rent |
4,747 | 5,007 | ||||||
Fixed and intangible assets |
18,564 | 18,282 | ||||||
Other |
7,131 | 3,667 | ||||||
|
|
|
|
|||||
Gross deferred tax assets |
122,020 | 58,827 | ||||||
Valuation allowance |
(122,020 | ) | (58,827 | ) | ||||
|
|
|
|
|||||
Total deferred tax assets |
$ | — | $ | — | ||||
|
|
|
|
Year Ended December 31, |
||||
2020 |
||||
Beginning unrecognized tax benefits |
$ | — | ||
Addition to tax positions related to prior years |
383 | |||
Addition to tax positions related to current year |
300 | |||
|
|
|||
Ending unrecognized tax benefits |
$ | 683 | ||
|
|
Years Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Numerator |
||||||||
Net Loss |
$ | (250,316 | ) | $ | (178,249 | ) | ||
|
|
|
|
|||||
Net loss |
$ | (250,316 | ) | $ | (178,249 | ) | ||
|
|
|
|
|||||
Denominator |
||||||||
Weighted-average common shares outstanding |
6,261,247 | 9,878,239 | ||||||
|
|
|
|
|||||
Weighted-average common shares used in computing basic and diluted net loss per share |
6,261,247 | 9,878,239 | ||||||
|
|
|
|
|||||
Net loss per share, basic and diluted |
$ | (39.98 | ) | $ | (18.04 | ) | ||
|
|
|
|
Years Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Options to purchase common stock |
12,802,899 | 10,633,972 | ||||||
Common stock subject to repurchase or forfeiture |
4,562,207 | 4,847,841 | ||||||
Redeemable convertible preferred stock (1) |
75,664,679 | 56,753,734 | ||||||
Exchangeable shares |
22,017,113 | 22,001,764 | ||||||
|
|
|
|
|||||
Total common stock equivalents |
115,046,898 | 94,237,311 | ||||||
|
|
|
|
(1) | Includes the warrants reclassified to equity as of December 31, 2019 and those issued in connection with the 2018 Loan and Security Agreement and related amendment as of December 31, 2020 and 2019. |
Page |
||||||
ARTICLE I CERTAIN DEFINITIONS |
A-2 | |||||
1.01 |
Definitions | A-2 | ||||
1.02 |
Construction | A-18 | ||||
1.03 |
Knowledge | A-18 | ||||
ARTICLE II THE MERGERS; CLOSING |
A-19 | |||||
2.01 |
The Mergers | A-19 | ||||
2.02 |
Effects of the Mergers | A-19 | ||||
2.03 |
Closing | A-19 | ||||
2.04 |
Closing Certificates | A-19 | ||||
2.05 |
Certificate of Formation and Operating Agreement of the Surviving Entity | A-19 | ||||
2.06 |
Directors and Officers of the Surviving Corporation and the Surviving Entity | A-19 | ||||
2.07 |
Tax Free Reorganization Matters | A-19 | ||||
ARTICLE III EFFECTS OF THE MERGERS |
A-21 | |||||
3.01 |
Treatment of Capital Stock in the First Merger | A-21 | ||||
3.02 |
Treatment of Capital Stock and Equity Interests in the Second Merger | A-22 | ||||
3.03 |
Equitable Adjustments | A-22 | ||||
3.04 |
Delivery of Per Share Company Common Stock Consideration and Per Share Company Special Voting Stock Consideration | A-22 | ||||
3.05 |
Lost Certificate | A-23 | ||||
3.06 |
Conversion of Company Stock Options | A-23 | ||||
3.07 |
Treatment of Company Warrants | A-24 | ||||
3.08 |
Withholding | A-24 | ||||
3.09 |
Cash in Lieu of Fractional Shares | A-24 | ||||
3.10 |
Payment of Expenses | A-25 | ||||
3.11 |
Dissenting Shares | A-25 | ||||
ARTICLE IV EARN OUT |
A-25 | |||||
4.01 |
Issuance of Earn Out Shares | A-25 | ||||
4.02 |
Acceleration Event | A-26 | ||||
4.03 |
Earn Out and Company Stock Options | A-27 | ||||
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
A-27 | |||||
5.01 |
Corporate Organization of the Company | A-27 | ||||
5.02 |
Subsidiaries | A-27 | ||||
5.03 |
Due Authorization | A-28 | ||||
5.04 |
No Conflict | A-28 | ||||
5.05 |
Governmental Authorities; Consents | A-29 | ||||
5.06 |
Capitalization | A-29 | ||||
5.07 |
Financial Statements | A-31 | ||||
5.08 |
Undisclosed Liabilities | A-32 | ||||
5.09 |
Litigation and Proceedings | A-32 | ||||
5.10 |
Compliance with Laws | A-32 | ||||
5.11 |
Intellectual Property | A-33 | ||||
5.12 |
Data Privacy | A-36 | ||||
5.13 |
Contracts; No Defaults | A-37 | ||||
5.14 |
Company Benefit Plans | A-39 | ||||
5.15 |
Labor Matters | A-41 | ||||
5.16 |
Taxes | A-43 | ||||
5.17 |
Brokers’ Fees | A-44 | ||||
5.18 |
Insurance | A-44 | ||||
5.19 |
Real Property; Tangible Property | A-55 |
5.20 |
Environmental Matters | A-45 | ||||
5.21 |
Absence of Changes | A-46 | ||||
5.22 |
Significant OTAs and Suppliers | A-46 | ||||
5.23 |
Affiliate Agreements | A-46 | ||||
5.24 |
Internal Controls | A-46 | ||||
5.25 |
Permits | A-47 | ||||
5.26 |
Registration Statement | A-47 | ||||
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PARENT, MERGER SUB I AND MERGER SUB II |
A-47 | |||||
6.01 |
Corporate Organization | A-47 | ||||
6.02 |
Due Authorization | A-48 | ||||
6.03 |
No Conflict | A-49 | ||||
6.04 |
Litigation and Proceedings | A-49 | ||||
6.05 |
Compliance with Laws | A-49 | ||||
6.06 |
Benefit Plans | A-50 | ||||
6.07 |
Governmental Authorities; Consents | A-50 | ||||
6.08 |
Trust Account | A-50 | ||||
6.09 |
Taxes | A-51 | ||||
6.10 |
Brokers’ Fees | A-51 | ||||
6.11 |
Parent SEC Reports; Financial Statements; Sarbanes-Oxley Act | A-52 | ||||
6.12 |
Business Activities; Absence of Changes | A-53 | ||||
6.13 |
Registration Statement | A-54 | ||||
6.14 |
Capitalization | A-55 | ||||
6.15 |
Parent Listing | A-56 | ||||
6.16 |
Contracts; No Defaults | A-56 | ||||
6.17 |
Investment Company Act; JOBS Act | A-56 | ||||
6.18 |
Affiliate Agreements | A-56 | ||||
6.19 |
Parent Stockholders | A-57 | ||||
6.20 |
PIPE Investment; Subscription Agreements | A-57 | ||||
ARTICLE VII COVENANTS OF THE COMPANY |
A-57 | |||||
7.01 |
Conduct of Business | A-57 | ||||
7.02 |
Inspection | A-60 | ||||
7.03 |
Exercise or Assumption of Company Warrants | A-61 | ||||
7.04 |
Termination of Certain Agreements | A-61 | ||||
7.05 |
No Parent Securities Transactions | A-61 | ||||
7.06 |
No Claim Against the Trust Account | A-61 | ||||
7.07 |
Company Financial Statements; Other Actions | A-61 | ||||
7.08 |
Consent Solicitation; Company Stockholder Consent | A-62 | ||||
7.09 |
Non-Solicitation |
A-62 | ||||
7.10 |
Existing Credit Agreements | A-63 | ||||
ARTICLE VIII COVENANTS OF PARENT |
A-63 | |||||
8.01 |
Indemnification and Insurance | A-63 | ||||
8.02 |
Conduct of Parent During the Interim Period | A-65 | ||||
8.03 |
Trust Account | A-66 | ||||
8.04 |
Inspection | A-67 | ||||
8.05 |
Parent Nasdaq Listing | A-67 | ||||
8.06 |
Parent Public Filings | A-67 | ||||
8.07 |
Section 16 Matters | A-67 | ||||
8.08 |
Director and Officers | A-67 | ||||
8.09 |
Exclusivity | A-67 | ||||
8.10 |
Bylaws | A-68 | ||||
8.11 |
Insider Letters | A-68 |
8.12 |
Inversion Agreements | A-68 | ||||
8.13 |
Waiver Agreements | A-68 | ||||
8.14 |
Parent A&R Charter. | A-68 | ||||
ARTICLE IX JOINT COVENANTS |
A-68 | |||||
9.01 |
Support of Transaction | A-68 | ||||
9.02 |
Preparation of Registration Statement; Special Meeting | A-68 | ||||
9.03 |
Other Filings; Press Release | A-70 | ||||
9.04 |
Confidentiality; Communications Plan. | A-71 | ||||
9.05 |
Regulatory Approvals | A-71 | ||||
9.06 |
Management Equity Incentive Plan; Parent Incentive Plans | A-72 | ||||
9.07 |
FIRPTA | A-73 | ||||
9.08 |
A&R Registration Rights Agreement | A-73 | ||||
9.09 |
Transaction Litigation | A-73 | ||||
9.10 |
Canadian Exchangeable Shares | A-73 | ||||
ARTICLE X CONDITIONS TO OBLIGATIONS |
A-73 | |||||
10.01 |
Conditions to Obligations of All Parties | A-73 | ||||
10.02 |
Additional Conditions to Obligations of Parent | A-74 | ||||
10.03 |
Additional Conditions to Obligations of the Company | A-75 | ||||
10.04 |
Frustration of Conditions | A-75 | ||||
ARTICLE XI TERMINATION/EFFECTIVENESS |
A-75 | |||||
11.01 |
Termination | A-75 | ||||
11.02 |
Effect of Termination | A-77 | ||||
ARTICLE XII MISCELLANEOUS |
A-77 | |||||
12.01 |
Waiver | A-77 | ||||
12.02 |
Notices | A-77 | ||||
12.03 |
Assignment | A-78 | ||||
12.04 |
Rights of Third Parties | A-78 | ||||
12.05 |
Expenses | A-78 | ||||
12.06 |
Governing Law | A-78 | ||||
12.07 |
Captions; Counterparts | A-78 | ||||
12.08 |
Schedules and Exhibits | A-78 | ||||
12.09 |
Entire Agreement | A-79 | ||||
12.10 |
Amendments | A-79 | ||||
12.11 |
Severability | A-79 | ||||
12.12 |
Jurisdiction; WAIVER OF TRIAL BY JURY | A-79 | ||||
12.13 |
Enforcement | A-80 | ||||
12.14 |
Non-Recourse |
A-80 | ||||
12.15 |
Nonsurvival of Representations, Warranties and Covenants | A-80 | ||||
12.16 |
Acknowledgements | A-80 |
GORES METROPOULOS II, INC. | ||
By: | /s/ Alec Gores | |
Name: Alec Gores | ||
Title: Chief Executive Officer | ||
SUNSHINE MERGER SUB I, INC. | ||
By: | /s/ Andrew McBride | |
Name: Andrew McBride | ||
Title: Chief Financial Officer and Secretary | ||
SUNSHINE MERGER SUB II, LLC | ||
By: | /s/ Andrew McBride | |
Name: Andrew McBride | ||
Title: Manager |
SONDER HOLDINGS INC. | ||
By: | /s/ Francis Davidson | |
Name: Francis Davidson | ||
Title: Chief Executive Officer |
Andrew McBride |
Chief Financial Officer and Secretary |
Page |
||||||
ARTICLE I - CORPORATE OFFICES |
C-1 |
|||||
1.1 |
REGISTERED OFFICE | C-1 |
||||
1.2 |
OTHER OFFICES | C-1 |
||||
ARTICLE II - MEETINGS OF STOCKHOLDERS |
C-1 |
|||||
2.1 |
PLACE OF MEETINGS | C-1 |
||||
2.2 |
ANNUAL MEETING | C-1 |
||||
2.3 |
SPECIAL MEETING | C-1 |
||||
2.4 |
ADVANCE NOTICE PROCEDURES | C-2 |
||||
2.5 |
NOTICE OF STOCKHOLDERS’ MEETINGS | C-7 |
||||
2.6 |
QUORUM | C-7 |
||||
2.7 |
ADJOURNED MEETING; NOTICE | C-7 |
||||
2.8 |
CONDUCT OF BUSINESS | C-7 |
||||
2.9 |
VOTING | C-8 |
||||
2.10 |
STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING | C-8 |
||||
2.11 |
RECORD DATES | C-8 |
||||
2.12 |
PROXIES | C-9 |
||||
2.13 |
LIST OF STOCKHOLDERS ENTITLED TO VOTE | C-9 |
||||
2.14 |
INSPECTORS OF ELECTION | C-9 |
||||
ARTICLE III - DIRECTORS |
C-10 |
|||||
3.1 |
POWERS | C-10 |
||||
3.2 |
NUMBER OF DIRECTORS | C-10 |
||||
3.3 |
ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS | C-10 |
||||
3.4 |
RESIGNATION AND VACANCIES | C-10 |
||||
3.5 |
PLACE OF MEETINGS; MEETINGS BY TELEPHONE | C-10 |
||||
3.6 |
REGULAR MEETINGS | C-11 |
||||
3.7 |
SPECIAL MEETINGS; NOTICE | C-11 |
||||
3.8 |
QUORUM; VOTING | C-11 |
||||
3.9 |
BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING | C-12 |
||||
3.10 |
FEES AND COMPENSATION OF DIRECTORS | C-12 |
||||
3.11 |
REMOVAL OF DIRECTORS | C-12 |
||||
ARTICLE IV - COMMITTEES |
C-12 |
|||||
4.1 |
COMMITTEES OF DIRECTORS | C-12 |
||||
4.2 |
COMMITTEE MINUTES | C-12 |
||||
4.3 |
MEETINGS AND ACTION OF COMMITTEES | C-12 |
||||
4.4 |
SUBCOMMITTEES | C-13 |
||||
ARTICLE V - OFFICERS |
C-13 |
|||||
5.1 |
OFFICERS | C-13 |
||||
5.2 |
APPOINTMENT OF OFFICERS | C-13 |
||||
5.3 |
SUBORDINATE OFFICERS | C-13 |
||||
5.4 |
REMOVAL AND RESIGNATION OF OFFICERS | C-14 |
||||
5.5 |
VACANCIES IN OFFICES | C-14 |
||||
5.6 |
REPRESENTATION OF SECURITIES OF OTHER ENTITIES | C-14 |
||||
5.7 |
AUTHORITY AND DUTIES OF OFFICERS | C-14 |
Page |
||||||
ARTICLE VI - STOCK |
C-14 |
|||||
6.1 |
STOCK CERTIFICATES; PARTLY PAID SHARES | C-14 |
||||
6.2 |
SPECIAL DESIGNATION ON CERTIFICATES | C-15 |
||||
6.3 |
LOST CERTIFICATES | C-15 |
||||
6.4 |
DIVIDENDS | C-15 |
||||
6.5 |
TRANSFER OF STOCK | C-15 |
||||
6.6 |
STOCK TRANSFER AGREEMENTS | C-16 |
||||
6.7 |
REGISTERED STOCKHOLDERS | C-16 |
||||
6.8 |
[LOCK-UP] |
C-16 |
||||
ARTICLE VII - MANNER OF GIVING NOTICE AND WAIVER |
C-18 |
|||||
7.1 |
NOTICE OF STOCKHOLDERS’ MEETINGS | C-18 |
||||
7.2 |
NOTICE TO STOCKHOLDERS SHARING AN ADDRESS | C-18 |
||||
7.3 |
NOTICE TO PERSON WITH WHOM COMMUNICATION IS UNLAWFUL | C-18 |
||||
7.4 |
WAIVER OF NOTICE | C-18 |
||||
ARTICLE VIII - INDEMNIFICATION |
C-19 |
|||||
8.1 |
INDEMNIFICATION OF DIRECTORS AND OFFICERS IN THIRD PARTY PROCEEDINGS | C-19 |
||||
8.2 |
INDEMNIFICATION OF DIRECTORS AND OFFICERS IN ACTIONS BY OR IN THE RIGHT OF THE COMPANY | C-19 |
||||
8.3 |
SUCCESSFUL DEFENSE | C-19 |
||||
8.4 |
INDEMNIFICATION OF OTHERS | C-20 |
||||
8.5 |
ADVANCED PAYMENT OF EXPENSES | C-20 |
||||
8.6 |
LIMITATION ON INDEMNIFICATION | C-20 |
||||
8.7 |
DETERMINATION; CLAIM | C-21 |
||||
8.8 |
NON-EXCLUSIVITY OF RIGHTS |
C-21 |
||||
8.9 |
INSURANCE | C-21 |
||||
8.10 |
SURVIVAL | C-21 |
||||
8.11 |
EFFECT OF REPEAL OR MODIFICATION | C-22 |
||||
8.12 |
CERTAIN DEFINITIONS | C-22 |
||||
ARTICLE IX - GENERAL MATTERS |
C-22 |
|||||
9.1 |
EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS | C-22 |
||||
9.2 |
FISCAL YEAR | C-22 |
||||
9.3 |
SEAL | C-22 |
||||
9.4 |
CONSTRUCTION; DEFINITIONS | C-23 |
||||
9.5 |
FORUM SELECTION | C-23 |
||||
ARTICLE X - AMENDMENTS |
C-23 |
3.11 | REMOVAL OF DIRECTORS |
Fair Market Value of Class A Common Stock |
||||||||||||||||||||||||||||||||||||
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 |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
57 months |
0.257 | 0.277 | 0.294 | 0.31 | 0.324 | 0.337 | 0.348 | 0.358 | 0.365 | |||||||||||||||||||||||||||
54 months |
0.252 | 0.272 | 0.291 | 0.307 | 0.322 | 0.335 | 0.347 | 0.357 | 0.365 | |||||||||||||||||||||||||||
51 months |
0.246 | 0.268 | 0.287 | 0.304 | 0.32 | 0.333 | 0.346 | 0.357 | 0.365 | |||||||||||||||||||||||||||
48 months |
0.241 | 0.263 | 0.283 | 0.301 | 0.317 | 0.332 | 0.344 | 0.356 | 0.365 | |||||||||||||||||||||||||||
45 months |
0.235 | 0.258 | 0.279 | 0.298 | 0.315 | 0.33 | 0.343 | 0.356 | 0.365 | |||||||||||||||||||||||||||
42 months |
0.228 | 0.252 | 0.274 | 0.294 | 0.312 | 0.328 | 0.342 | 0.355 | 0.364 | |||||||||||||||||||||||||||
39 months |
0.221 | 0.246 | 0.269 | 0.29 | 0.309 | 0.325 | 0.34 | 0.354 | 0.364 | |||||||||||||||||||||||||||
36 months |
0.213 | 0.239 | 0.263 | 0.285 | 0.305 | 0.323 | 0.339 | 0.353 | 0.364 | |||||||||||||||||||||||||||
33 months |
0.205 | 0.232 | 0.257 | 0.28 | 0.301 | 0.32 | 0.337 | 0.352 | 0.364 | |||||||||||||||||||||||||||
30 months |
0.196 | 0.224 | 0.25 | 0.274 | 0.297 | 0.316 | 0.335 | 0.351 | 0.364 | |||||||||||||||||||||||||||
27 months |
0.185 | 0.214 | 0.242 | 0.268 | 0.291 | 0.313 | 0.332 | 0.35 | 0.364 | |||||||||||||||||||||||||||
24 months |
0.173 | 0.204 | 0.233 | 0.26 | 0.285 | 0.308 | 0.329 | 0.348 | 0.364 | |||||||||||||||||||||||||||
21 months |
0.161 | 0.193 | 0.223 | 0.252 | 0.279 | 0.304 | 0.326 | 0.347 | 0.364 | |||||||||||||||||||||||||||
18 months |
0.146 | 0.179 | 0.211 | 0.242 | 0.271 | 0.298 | 0.322 | 0.345 | 0.363 | |||||||||||||||||||||||||||
15 months |
0.13 | 0.164 | 0.197 | 0.23 | 0.262 | 0.291 | 0.317 | 0.342 | 0.363 | |||||||||||||||||||||||||||
12 months |
0.111 | 0.146 | 0.181 | 0.216 | 0.25 | 0.282 | 0.312 | 0.339 | 0.363 | |||||||||||||||||||||||||||
9 months |
0.09 | 0.125 | 0.162 | 0.199 | 0.237 | 0.272 | 0.305 | 0.336 | 0.362 | |||||||||||||||||||||||||||
6 months |
0.065 | 0.099 | 0.137 | 0.178 | 0.219 | 0.259 | 0.296 | 0.331 | 0.362 | |||||||||||||||||||||||||||
3 months |
0.034 | 0.065 | 0.104 | 0.15 | 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 |
GORES METROPOULOS II, INC. | ||
By: | /s/ Alec Gores | |
Name: Alec Gores | ||
Title: Chief Executive Officer | ||
Computershare Inc. | ||
Computershare Trust Company, N.A., as Warrant Agent | ||
By: | /s/ Collin Ekeogu | |
Name: Collin Ekeogu | ||
Title: Manager, Corporate Actions |
GORES METROPOULOS II, INC. | ||
By: | | |
Name: | ||
Title: | ||
Computershare Inc. Computershare Trust Company, N.A., as Warrant Agent | ||
By: | | |
Name: | ||
Title: |
Date: , 21 | | |
(Signature) | ||
| ||
| ||
| ||
(Address) | ||
(Tax Identification Number) |
GORES METROPOULOS II, INC. | ||
By: | ||
Name: | ||
Title: |
Signature of Subscriber: | Signature of Joint Subscriber, if applicable: | |
By: |
By: | |
Name: | Name: | |
Title: | Title: | |
Name of Subscriber: | Name of Joint Subscriber, if applicable: | |
(Please print. Please indicate name and capacity of | (Please print. Please indicate name and | |
person signing above) | capacity of person signing above) | |
Name in which shares are to be registered | ||
(if different): | ||
Email Address: |
||
If there are joint investors, please check one: | ||
☐ Joint Tenants with Rights of Survivorship | ||
☐ Tenants-in-Common |
||
☐ Community Property | ||
Subscriber’s EIN: |
Joint Subscriber’s EIN: ______________________ | |
Business Address-Street: | Mailing Address-Street (if different): | |
City, State, Zip: | City, State, Zip: | |
Attn: | Attn: | |
Telephone No.: |
Telephone No.: | |
Facsimile No.: |
Facsimile No.: |
Aggregate Number of Acquired Shares subscribed for: |
Aggregate Purchase Price: $ |
A. | QUALIFIED INSTITUTIONAL BUYER STATUS |
1. | ☐ We are a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act (a “QIB”)). |
2. | ☐ We are subscribing for the Acquired Shares as a fiduciary or agent for one or more investor accounts, and each owner of such account is a QIB. |
B. | INSTITUTIONAL ACCREDITED INVESTOR STATUS |
1. | ☐ We are an “institutional accredited investor” (within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act or an entity in which all of the equity holders are institutional accredited investors within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act), and have marked and initialed the appropriate box on the following page indicating the provision under which we qualify as an “institutional accredited investor.” |
2. | ☐ We are not a natural person. |
C. | AFFILIATE STATUS |
☐ | is: |
☐ | is not: |
COMPANY: | ||
SONDER HOLDINGS INC., a Delaware corporation | ||
By: | ||
Name: | ||
Title: |
GORES HOLDERS: | ||
GORES METROPOULOS SPONSOR II, LLC, a Delaware limited liability company | ||
By: | ||
Name: | ||
Title: |
By: | ||
Name: | ||
By: | ||
Name: | ||
By: | ||
Name: | ||
SONDER HOLDERS: | ||
By: | ||
Name: | ||
Title: |
GORES METROPOULOS II, INC. | ||
By: | | |
Name: Andrew McBride | ||
Title: Chief Financial Officer | ||
SUNSHINE MERGER SUB I, INC. | ||
By: | | |
Name: Andrew McBride | ||
Title: Chief Financial Officer and Secretary | ||
SUNSHINE MERGER SUB II, LLC | ||
By: | | |
Name: Andrew McBride | ||
Title: Manager |
[STOCKHOLDER] |
|
Stockholder Name |
Physical Address for Notice |
Email Address for Notice |
Class/Series of Company Stock |
Number of Shares |
Dated: | [STOCKHOLDER] | |
By: | ||
Name: | ||
Title: |
_____ Original Application | Offering Date: | |||||
_____ Change in Payroll Deduction Rate |
Employee’s Social |
||
Security Number |
||
(for U.S.-based employees): |
| |
Employee’s Address: |
| |
| ||
|
Dated: | |
|||||||
Signature of Employee | ||||||||
Name and Address of Participant: | ||
| ||
| ||
| ||
Signature: | ||
| ||
Date: |
(1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
(i) | To include any prospectus required by Section 10(a)(3) of the Securities Act; |
(ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof), which, individually or in the |
aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
(iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
(2) | 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. |
(3) | 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. |
(4) | That, for the purpose of determining liability under the Securities Act to any purchasers: |
(i) | 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. |
(5) | 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: |
(i) | any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
(ii) | 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; |
(iii) | 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 the undersigned registrant; and |
(iv) | any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
(b) | The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement 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. |
(1) | The undersigned registrant hereby undertakes as follows: that prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of this form. |
(2) | The registrant undertakes that every prospectus (i) that is filed pursuant to paragraph (1) immediately preceding or (ii) that purports to meet the requirements of Section 10(a)(3) of the Securities Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes 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. |
(d) | Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. |
(e) | The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of Form S-4, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. |
(f) | The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. |
Exhibit No. |
Description | |
2.1** | Agreement and Plan of Merger, dated as of April 29, 2021, by and among Gores Metropoulos II, Inc., Sunshine Merger Sub I, Inc., Sunshine Merger Sub II, LLC, and Sonder Holdings Inc. (included as Annex A to the proxy statement/prospectus/consent solicitation statement and was previously included as Exhibit 2.1 to the Company’s current report on Form 8-K, filed April 30, 2021) | |
3.1** | Form of proposed Amended and Restated Certificate of Incorporation of Gores Metropoulos II, Inc. (included as to the proxy statement/prospectus/consent solicitation statement) | |
3.2** | Form of proposed Amended and Restated Bylaws of Sonder Holdings Inc. (included as to the proxy statement/prospectus/consent solicitation statement) | |
5.1* | Opinion of Weil, Gotshal & Manges LLP regarding the validity of the securities being registered | |
8.1* | Form of Opinion of Wilson Sonsini Goodrich & Rosati, PC regarding certain U.S. tax matters | |
10.1** | Warrant Agreement, dated as of January 22, 2021, by and among Gores Metropoulos II, Inc., Computershare Inc., and Computershare Trust Company, N.A., as warrant agent (included as to the proxy statement/prospectus/consent solicitation statement and was previously included as Exhibit 4.1 to the Company’s current report on Form 8-K, filed January 25, 2021) | |
10.2** | Form of Subscription Agreement (included as to the proxy statement/prospectus/consent solicitation statement and was previously included as Exhibit 10.1 to the Company’s current report on Form 8-K, filed April 30, 2021) | |
10.3** | Form of Amended and Restated Registration Rights Agreement, by and among Sonder Holdings Inc. (f/k/a Gores Metropoulos II, Inc.), Gores Metropoulos Sponsor II, LLC, the Gores Holders and the Sonder Holders (included as to the proxy statement/prospectus/consent solicitation statement) | |
10.4**# | 2021 Management Equity Incentive Plan (included as to the proxy statement/prospectus/consent solicitation statement) | |
10.5**# | 2021 Equity Incentive Plan (included as to the proxy statement/prospectus/consent solicitation statement) | |
10.6**# | 2021 Employee Stock Purchase Plan (included as to the proxy statement/prospectus/consent solicitation statement) | |
10.7†# | Key Executive Change in Control and Severance Plan and related forms of agreement | |
10.8** | Industrial Gross Lease for 101 15th Street (Sonder San Francisco HQ), dated as of March 22, 2018, by and between Thomas F. Murphy and Martina Murphy as settlors and trustees of the Murphy Trust UDT dated October 3, 2003, and Sonder USA Inc. | |
10.9** | First Amendment to Lease for 101 15th Street (Sonder San Francisco HQ), dated as of December 3, 2019, by and between Thomas F. Murphy and Martina Murphy as settlors and trustees of the Murphy Trust UDT dated October 3, 2003, and Sonder USA Inc. | |
10.10†# | Offer Letter from Sonder Holdings Inc. to Sanjay Banker, dated [ ], 2021. | |
10.11†# | Offer Letter from Sonder Holdings Inc. to Francis Davidson, dated [ ], 2021. | |
10.12†# | Offer Letter from Sonder Holdings Inc. to Satyen Pandya, dated [ ], 2021. | |
10.13** | Form of Voting and Support Agreement, dated April 29, 2021, by and among Gores Metropoulos II, Inc., Sunshine Merger Sub I, Inc., Sunshine Merger Sub II, LLC, and the stockholder party thereto (included as to the proxy statement/prospectus/consent solicitation statement and was previously included as Exhibit 10.2 to the Company’s current report on Form 8-K, filed April 30, 2021) |
Exhibit No. |
Description | |
23.1* | Consent of KPMG LLP, independent registered accounting firm for Gores Metropoulos II, Inc. | |
23.2* | Consent of Deloitte & Touche LLP, independent registered public accounting firm for Sonder Holdings Inc. | |
23.3* | Consent of Moelis & Company LLC, financial advisor for Gores Metropoulos II, Inc. | |
23.4** | Consent of Francis Davidson to be named as director | |
23.5** | Consent of Manon Brouillette to be named as director | |
23.6** | Consent of Nabeel Hyatt to be named as director | |
23.7** | Consent of Frits van Paasschen to be named as director | |
99.1* | Form of Proxy Card for Special Meeting | |
101.INS* | Inline XBRL Instance Document | |
101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* | Filed herewith |
** | Previously filed |
† | To be filed upon amendment |
# | Indicates management contract or compensatory plan or arrangement. |
Gores Metropoulos II, Inc. | ||
By: | * | |
Name: | Dean Metropoulos | |
Title: | Chairman of the Board of Directors |
Signature |
Title |
Date | ||
* Dean Metropoulos |
Chairman | August 19, 2021 | ||
* Alec Gores |
CEO (Principal Executive Officer) |
August 19, 2021 | ||
* Andrew McBride |
CFO and Secretary (Principal Financial and Accounting Officer) |
August 19, 2021 | ||
* Randall Bort |
Director | August 19, 2021 | ||
* Michael Cramer |
Director | August 19, 2021 | ||
* Joseph Gatto |
Director | August 19, 2021 |
*By: | /s/ Andrew McBride | |
Name: Andrew McBride | ||
Title: Attorney-in-Fact |