Delaware |
8200 |
98-1499860 | ||
(State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification No.) |
John M. Mutkoski Jocelyn M. Arel Evyn W. Rabinowitz Goodwin Procter LLP 100 Northern Avenue Boston, Massachusetts 02210 Tel: (617) 570-1000 |
Chris Swenson Chief Legal Officer Nerdy Inc. 101 S. Hanley Rd., Suite 300 St. Louis, MO 63105 Telephone: (314) 412-1227 |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
☒ | Smaller reporting company | |||||
Emerging growth company |
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II-1 |
• | “additional forward purchasers” means third party purchasers not affiliated with TPG Global who committed to purchase securities under the Forward Purchase Agreements; |
• | “amended and restated memorandum and articles of association” means the amended and restated memorandum and articles of association of TPG Pace, effective October 6, 2020; |
• | “Blocker Merger Sub I” means TPG Pace Blocker Merger Sub I Inc., a Delaware corporation and wholly owned subsidiary of TPG Pace; |
• | “Blocker Merger Sub II” means TPG Pace Blocker Merger Sub II Inc., a Delaware corporation and wholly owned subsidiary of TPG Pace; |
• | “Blocker Merger Subs” means Blocker Merger Sub I and Blocker Merger Sub II; |
• | “Blockers” means TCV Blocker and Learn Blocker; |
• | “Business Combination Agreement” means that certain Business Combination Agreement, dated January 28, 2021, by and among TPG Pace, TPG Pace Merger Sub, TCV Blocker, Learn Blocker, Blocker Merger Sub I, Blocker Merger Sub II, Nerdy, and, solely for the purposes stated therein, certain entities affiliates with the Blockers (as amended on March 19, 2021, on July 14, 2021, on August 11, 2021 and on August 18, 2021 and as amended, supplemented or otherwise modified from time to time in accordance with its terms); |
• | “Call Right” means the right, pursuant to OpCo’s LLC Agreement and upon the exercise of the OpCo Redemption Right by an OpCo Unitholder, for Nerdy Inc. to acquire each tendered OpCo Unit directly |
from such OpCo Unitholder for, at Nerdy Inc.’s election, (i) one share of Class A Common Stock, subject to conversion rate adjustments for stock splits, stock dividends and reclassification, or (ii) an equivalent amount of cash; |
• | “Cayman Islands Companies Act” means the Companies Act (2021 Revision) of the Cayman Islands as the same may be amended from time to time; |
• | “Class A Common Stock” means Class A common stock, $0.0001 par value of Nerdy Inc.; |
• | “Class A Shares” means the Class A ordinary shares, $0.0001 par value in the capital of TPG Pace, which automatically converted, on a one-for-one |
• | “Class B Common Stock” means the Class B common Stock, par value $0.0001 per share of Nerdy Inc.; |
• | “Closing Date” means the date on which the Closing occurred; |
• | “Closing” means the closing of the transactions contemplated by the Business Combination Agreement; |
• | “Cohn” means, collectively, Cohn Investments, LLC and Charles K. Cohn VT Trust U/A/D May 26, 2017 |
• | “Common Stock” means the Class A Common Stock and Class B Common Stock; |
• | “Continental” means Continental Stock Transfer & Trust Company; |
• | “Domestication” means the transfer by way of continuation and deregistration of TPG Pace from the Cayman Islands and the continuation and domestication as a corporation registered in the State of Delaware, upon which TPG Pace changed its name to Nerdy Inc.; |
• | “Earnout Equity” means the TPG Pace Sponsor Earnout Equity and the Nerdy Earnout Consideration; |
• | “Effective Time” means the time at which the Merger became effective; |
• | “Equity Incentive Plan” means the Nerdy Inc. 2021 Equity Incentive Plan adopted and approved by the shareholders pursuant to the Equity Incentive Plan Proposal; |
• | “Excess Shares” means shares in excess of 15,000,000 aggregate forward purchase shares; |
• | “Excess Share Forfeitures” means the forfeiture of Excess Shares pursuant to the Waiver Agreement; |
• | “Existing Governing Documents” means the amended and restated memorandum and articles of association; |
• | “Existing Nerdy Holders” means the existing holders of equity securities of Nerdy, but including with respect to the Blockers, the owners of the Blockers with respect to their indirect interest in Nerdy equity; |
• | “Experts” means Nerdy’s tutors, instructors, subject matter experts, educators and other professionals; |
• | “Forward Purchase Agreements” means those certain forward purchase agreements, entered into in connection with the TPG Pace IPO, by and among TPG Pace, TPG Holdings and certain third parties pursuant to which TPG Holdings, certain transferees of TPG Holdings and certain third parties, upon the terms and subject to the conditions set forth therein, have agreed to purchase certain Class A Shares and forward purchase warrants prior to the consummation of TPG Pace’s initial business combination; |
• | “forward purchase shares” means the shares of Class A Common Stock issued pursuant to the Forward Purchase Agreements; |
• | “forward purchase warrants” means the warrants issued pursuant to the Forward Purchase Agreements; |
• | “forward purchases” means the transactions contemplated under the Forward Purchase Agreements; |
• | “forward purchase securities” means, collectively, forward purchase shares and forward purchase warrants; |
• | “Founder Shares” means the 11,250,000 Class F ordinary shares, par value $0.0001 per share, of TPG Pace that were initially issued to our Sponsor in a private placement prior to our initial public offering and of which 160,000 were transferred to each of Chad Leat, Kathleen Philips, Wendi Sturgis and Kneeland Youngblood (40,000 shares each) in October 2020, and, following the Domestication, the 11,250,000 Class F ordinary shares automatically converted, on a one-for-one |
• | “Learn Blocker” means LCSOF XI VT, Inc., a Delaware corporation; |
• | “Learn Capital” means, collectively, Learn Blocker, Learn Capital Special Opportunities Fund XIV, L.P. and Learn Capital Special Opportunities Fund XV; |
• | “Learners” means Nerdy’s students, users, parents, guardians, and purchasers; |
• | “Merger Subs” means the Blocker Merger Subs and TPG Pace Merger Sub; |
• | “Merger” means the merger of TPG Pace Merger Sub with and into Nerdy pursuant to the Business Combination Agreement, with Nerdy as the surviving company in the Merger and, after giving effect to such Merger, OpCo becoming a subsidiary of TPG Pace; |
• | “Nerdy” means, prior to the Closing of the Reverse Recapitalization, Live Learning Technologies LLC, a Missouri limited liability company; |
• | “Nerdy Earnout Consideration” means those aggregate 4,000,000 (1) shares of Class A Common Stock or (2) OpCo Units (and a corresponding number of shares of Class B Common Stock) that were paid to certain Existing Nerdy Holders (treating for such calculation each OpCo Unit and corresponding share of Pace Class B Common Stock as one), which such shares or units, as applicable, were issued but subject to forfeiture until the achievement of Triggering Event I with respect 1,333,333 shares or units, Triggering Event II with respect to 1,333,333 shares or units, and Triggering Event III with respect to 1,333,334 shares or units; |
• | “Nerdy Inc. Board” means the board of directors of Nerdy Inc.; |
• | “Nerdy Inc. Founder Shares” means, after the domestication, the Class F Common Stock, par value $0.0001 of Nerdy Inc.; |
• | “Nerdy Inc. Preferred Stock” means shares of Nerdy Inc. preferred stock, par value $0.0001; |
• | “Nerdy Inc.” means Nerdy Inc., a Delaware corporation (f.k.a. TPG Pace Tech Opportunities Corp.), upon and after the Domestication; |
• | “Nerdy Recapitalization” means the conversion of each outstanding class of Nerdy preferred units and the Nerdy profit units (whether vested or unvested) into Nerdy common units (subject to substantially the same terms and conditions, including applicable vesting requirements); |
• | “Nerdy Securities” means Class A Common Stock and Nerdy Inc. warrants; |
• | “Nerdy Stockholder Group” means, collectively, Cohn, Learn Capital and TCV; |
• | “Nerdy Inc. warrants” means the warrants issued by Nerdy Inc. to acquire shares of Class A Common Stock; |
• | “Nerdy warrants” means the Nerdy Inc. warrants and the OpCo warrants that were issued to the equity holders of Nerdy in connection with the Reverse Recapitalization. |
• | “NYSE” means the New York Stock Exchange; |
• | “OpCo” means, after the conversion to a Delaware limited liability company and the Merger, Nerdy LLC, a Delaware limited liability company; |
• | “OpCo LLC Agreement” means the Second Amended and Restated Limited Liability Company Agreement of OpCo entered into in connection with the Closing; |
• | “OpCo Redemption Right” means the right, pursuant to the OpCo LLC Agreement, for OpCo Unitholders (other than Nerdy Inc.) to cause OpCo to acquire all or a portion of their vested OpCo Units and corresponding shares of Class B Common Stock for shares of Class A Common Stock at a redemption ratio of one share of Class A Common Stock for each OpCo Unit redeemed, subject to conversion rate adjustments for stock splits, stock dividends and reclassification; |
• | “OpCo Units” means the units of OpCo; |
• | “OpCo Unitholder” means a holder of OpCo Units; |
• | “OpCo warrants” means the warrants issued by OpCo to purchase OpCo Units; |
• | “PIPE Financing” means the transactions contemplated by the Subscription Agreements, pursuant to which the certain investors agreed to purchase, and TPG Pace agreed to issue and sell to such investors, newly issued shares of Class A Common Stock at a purchase price of $10.00 per share for gross proceeds of approximately $150 million, which purchase and sale was consummated concurrently with the Business Combination; |
• | “PIPE Investors” means the investors who participated in the PIPE Financing. |
• | “private placement warrants” means the 7,333,333 private placement warrants outstanding as of the date of this proxy statement/prospectus that were issued to our Sponsor (which became exercisable for Class A Shares at an exercise price of $11.50 per share), which are substantially identical to the public warrants sold as part of the units in the TPG Pace IPO, subject to certain limited exceptions, 2,444,444 were forfeited by our Sponsor pursuant to the Waiver Agreement in connection with the Business Combination and, after the Domestication, the 4,888,889 private placement warrants (after giving effect to the forfeiture described in the foregoing) that are exercisable for Class A Common Stock at $11.50 per share; |
• | “public shareholders” means holders of public shares; |
• | “public shares” means the currently outstanding 45,000,000 Class A Shares issued as part of the Units in the TPG Pace IPO; |
• | “public warrants” means the currently outstanding 9,000,000 warrants to purchase Class A Shares that were issued as part of the Units in the TPG Pace IPO (which became exercisable for Class A Shares at an exercise price of $11.50 per share) and, after the Domestication, the 9,000,000 warrants to purchase Class A Common Stock that are exercisable for shares of Class A Common Stock at $11.50 per share; |
• | “redemption” means each redemption of public shares for cash pursuant to the Existing Governing Documents; |
• | “Registration Rights Agreement” means that certain agreement with certain holders of Class A Common Stock and warrants after Closing, pursuant to which registration rights with respect to such securities will be offered; |
• | “SEC” means the Securities and Exchange Commission; |
• | “Securities Act” means the Securities Act of 1933, as amended; |
• | “Share Forfeitures” means, together, the Excess Share Forfeiture and the additional forfeiture of 2,000,000 shares of Class A Common Stock by holders of Founder Shares pursuant to the Waiver Agreement; |
• | “Stockholders’ Agreement” means that certain agreement by and among TPG Pace, the Nerdy Stockholder Group and Sponsor, pursuant to which certain governing rights and obligations of the parties are given; |
• | “Sponsor” means TPG Pace Tech Opportunities Sponsor, Series LLC, a Delaware limited liability company; |
• | “Subscription Agreements” means the subscription agreements, entered into by TPG Pace and certain investors in connection with the PIPE Financing; |
• | “TCV” means, collectively, TCV Blocker, TCV VIII (A) VT, L.P., TCV VIII, L.P., TCV VIII (B), L.P., TCV Member Fund, L.P and TCV VIII Master, L.P.; |
• | “TCV Blocker” means TCV VIII (A) VT, Inc., a Delaware corporation; |
• | “TPG” means TPG Global, LLC and its affiliates; |
• | “TPG Capital BD” means TPG Capital BD, LLC, an affiliate of our Sponsor and TPG Pace; |
• | “TPG Global” means TPG Global, LLC; |
• | “TPG Global Purchasers” means affiliates and employees of TPG Global that have committed to purchase forward purchase securities pursuant to the Forward Purchase Agreements; |
• | “TPG Pace Initial Shareholders” means our Sponsor and the TPG Pace Independent Directors; |
• | “TPG Pace IPO” means TPG Pace’s initial public offering that was consummated on October 9, 2020; |
• | “TPG Pace Merger Sub” means TPG Pace Tech Merger Sub LLC, a Delaware limited liability company and wholly owned subsidiary of TPG Pace; |
• | “TPG Pace ordinary shares” means our Class A Shares and our Founder Shares; |
• | “TPG Pace Public Securities” means Class A Shares and TPG Pace Public Warrants; |
• | “TPG Pace Public Warrants” means the currently outstanding 9,000,000 warrants to purchase Class A Shares that were issued as part of the Units in the TPG Pace IPO (which became exercisable for Class A Shares at an exercise price of $11.50 per share); |
• | “TPG Pace Sponsor Earnout Equity” means 4,000,000 shares of Class A Common Stock that have been made subject to potential forfeiture by Sponsor following the Closing until the achievement of Triggering Event I with respect 1,333,333 shares, Triggering Event II with respect to 1,333,333 shares, and Triggering Event III with respect to 1,333,334 shares, consistent with the forfeiture thresholds for the Nerdy Earnout Consideration; |
• | “TPG Pace,” means TPG Pace Tech Opportunities Corp., a Cayman Islands exempted company, prior to the consummation of the Domestication; |
• | “TRA Holders” means the OpCo Unitholders (other than Nerdy Inc.) that are a party to the Tax Receivable Agreement (and their respective successors and permitted assigns under the Tax Receivable Agreement); |
• | “transfer agent” means Continental, Nerdy’s transfer agent; |
• | “Triggering Event I” means the date on which the closing sale price of one share of Class A Common Stock quoted on the New York Stock Exchange (or the exchange on which the shares of Class A Common Stock are then listed) is greater than or equal to $12.00 for any 20 days within any 30 consecutive day period in which the Class A Common Stock are actually traded on the applicable exchange for the period between January 28, 2021 and the five-year anniversary of the Closing Date; |
• | “Triggering Event II” means the date on which the closing sale price of one share of Class A Common Stock quoted on the New York Stock Exchange (or the exchange on which the shares of Class A Common Stock are then listed) is greater than or equal to $14.00 for any 20 days within any 30 consecutive day period in which the Class A Common Stock are actually traded on the applicable exchange for the period between January 28, 2021 and the five-year anniversary of the Closing Date; |
• | “Triggering Event III” means the date on which the closing sale price of one share of Class A Common Stock quoted on the New York Stock Exchange (or the exchange on which the shares of Class A Common Stock are then listed) is greater than or equal to $16.00 for any 20 days within any 30 consecutive day period in which the Class A Common Stock are actually traded on the applicable exchange for the period between January 28, 2021 and the five-year anniversary of the Closing Date; |
• | “Trust Account” means the trust account established at the consummation of the TPG Pace’s IPO that holds the proceeds of the initial public offering and is maintained by Continental, acting as trustee; |
• | “Units” means the units of TPG Pace, each unit representing one Class A Share and one-fifth of one warrant to acquire one Class A Share, that were offered and sold by TPG Pace in its initial public offering and in its concurrent private placement; |
• | “Waiver Agreement” means that certain waiver agreement, dated January 29, 2021, by and among TPG Pace, our Sponsor and each holder of issued and outstanding Founder Shares which provides, among other things, that (i) holders of Founder Shares agreed to forfeit for no consideration a number of shares of Class A Common Stock equal to the number of shares of Class A Common Stock issued pursuant to certain Forward Purchase Agreements over an aggregate of 15,000,000 shares of Class A Common Stock, (ii) such holders of Founder Shares agreed to forfeit for no consideration 2,000,000 shares of Class A Common Stock, which shares of Class A Common Stock were immediately cancelled upon the Closing, (iii) Sponsor agreed to forfeit for no consideration 2,444,444 private placement warrants that were immediately cancelled upon the Closing and (iv) Sponsor further agreed to subject 4,000,000 shares of Class A Common Stock following the closing to potential forfeiture if certain stock price thresholds are not achieved within a period of five years from the Closing Date, consistent with the forfeiture thresholds for the Nerdy Earnout Consideration; |
• | “warrants” means, collectively, the FPA Warrants, public warrants, private placement warrants and certain Nerdy warrants. |
• | includes (a) the 8,000,000 aggregate shares of Class A Common Stock or OpCo Units (with equivalent number of shares of Class B Common Stock) that comprise the Earnout Equity, which are issued and outstanding as of Closing, but subject to forfeiture and (b) an expected 18,075,207 shares (of which 5,976,406 will be shares of Class A Common Stock of Nerdy, Inc. and 12,098,801 shares of Class B Common Stock of Nerdy Inc.) underlying (i) 9,036,422 vested (of which 1,233,379 are vested unit appreciation rights and 7,803,043 are vested profit interest units) and (ii) 9,038,785 unvested (of which 4,743,027 are unvested stock appreciation rights and 4,295,758 are unvested profit interest units), which unvested stock appreciation rights and profit interest units will be subject to certain vesting conditions and a risk of forfeiture, that are held by the former Nerdy unit appreciation rights and profit interest units holders immediately following the Closing; |
• | does not take into account the issuance of any shares under the Equity Incentive Plan; and |
• | otherwise assumes that none of TPG Pace’s existing shareholders or Nerdy equity holders purchase Class A Shares in the open market. |
• | our limited operating history, which makes it difficult to predict our future financial and operating results; |
• | our history of net losses; |
• | risks associated with our intellectual property, including claims that we infringe on a third party’s intellectual property rights; |
• | risks associated with our classification of some individual and entities we contract with as independent contractors; |
• | risks associated with the liquidity and trading of our securities; |
• | risks associated with payments that we may be required to make under the tax receivable agreement; |
• | risks associated with the terms of our warrants; |
• | litigation, regulatory and reputational risks arising from the fact that many of our learners are minors; |
• | our lack of an effective control environment that meets accounting and reporting requirements; |
• | changes in applicable laws or regulations; |
• | the possibility of cyber-related incidents and their related impacts on our business and results of operations; |
• | the possibility that COVID-19 may adversely affect our results of operations, financial position, and cash flows; |
• | the possibility that we may be adversely affected by other economic, business, and/or competitive factors; |
• | risks associated with managing our rapid growth; and; |
• | other factors detailed in the Prospectus in the section entitled “Risk Factors” beginning on page 11. |
• | Academic Tutoring: Academic Tutoring |
• | Professional Certifications, Training, & Skills: Professional Certifications, Training, & Skills |
• | Enrichment: Enrichment non-academic segments such as enrichment, visual arts, and technology. The size of this market in the U.S. is estimated to be $5.5 billion in 2020 and is projected to grow to $6.2 billion by 2025, according to IBISWorld research from June 2020. |
• | Test Preparation: Test Preparation |
• | We have a limited operating history, which makes it difficult to predict our future financial and operating results, and we may not achieve our expected financial and operating results in the future. |
• | We have incurred significant net losses since our formation, and we expect our operating expenses to increase significantly in the foreseeable future, which may make it more difficult for us to achieve and maintain profitability. |
• | A regional or global health pandemic, including COVID-19, could severely affect our business, results of operations, and financial condition due to impacts on learners and experts that use the platform, and consumer and institutional spending more broadly, as well as impacts from remote work arrangements, actions taken to contain the disease or treat its impact, and the speed and extent of the recovery. |
• | We contract with some individuals and entities classified as independent contractors, not employees, and if federal or state law mandates that they be classified as employees, our business may be adversely impacted. |
• | Our business depends heavily on the adoption by new and existing customers of one-on-one instruction, small group classes, large format group classes, adaptive self-study, and other online learning offerings. If we fail to attract new Learners or retain existing Learners, our revenue growth and profitability will suffer. |
• | We rely on our new and existing learners to drive utilization and to generate revenue and pay for our services. |
• | We did not design and maintain an effective control environment that meets our accounting and reporting requirements. |
• | Our reputation, brand, and the network effects among Experts and Learners on our platform are important to our success, and if we are not able to maintain and continue developing our reputation, brand, and network effects, our business, financial condition, and results of operations could be adversely affected. |
• | Many of our Learners are minors, which may subject us to significant and/or heightened litigation risks, regulatory scrutiny, and reputational damage. |
• | We may be exposed to claims and losses, including class action lawsuits, brought by or on behalf of our Learners or Experts, which could have a material adverse effect on our business. |
• | If we are not successful in launching and/or scaling up our new institutional offering to education systems, we could suffer losses and our results of operations will suffer. |
• | Contracts with education systems present unique risks and uncertainties that are not present when selling directly to Learners. |
• | We have grown rapidly and expect to continue to invest in our growth for the foreseeable future. If we fail to manage this growth effectively, the success of our business model may be compromised. |
• | Computer malware, viruses, hacking, phishing attacks, spamming, and other cyber-related incidents could harm our business and results of operations. |
• | Our financial performance depends heavily on Learner retention within our offerings, and factors influencing learner retention may be out of our control. |
• | We face competition from established, as well as other emerging companies, which could divert customers to our competition, result in pricing pressure, and significantly reduce our revenue. |
• | Part of our revenue is based on demand related to certain tests and admissions to certain types of schools, which could face headwinds. |
• | We may need additional capital in the future to pursue our business objectives. Additional capital may not be available on favorable terms, or at all, which could compromise our ability to grow our business. |
• | Changes in laws or regulations relating to consumer data privacy or data protection, or any actual or perceived failure by us to comply with such laws and regulations or our privacy policies, could materially and adversely affect our business. |
• | We operate in an industry with extensive intellectual property litigation, and we have been, and may be in the future, subject to claims related to a violation of third-party’s intellectual property rights. Such claims against us or our important vendors and suppliers, even where meritless, can be costly to defend and may hurt our business, results of operations, and financial condition. |
• | Failure to adequately protect our intellectual property and other proprietary rights could adversely affect our business, results of operations, and financial condition. |
• | A significant portion of our total outstanding shares may be sold into the market in the near future. This could cause the market price of our Class A Common Stock to drop significantly, even if our business is performing well. |
• | Our public warrants may never be in the money, and they may expire worthless, and the terms of the warrants may be amended in a manner adverse to a holder if holders of at least 50% of the then outstanding public warrants approve of such amendment. |
• | We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless. |
• | In certain cases, payments under the tax receivable agreement may be accelerated and/or significantly exceed the actual benefits, if any, we realize in respect of the tax attributes subject to the tax receivable agreement. |
• | We will not be reimbursed for any payments made under the tax receivable agreement in the event that any tax benefits are subsequently disallowed. |
• | execute on our relatively new, evolving, and unproven business model, including our shift in 2020 to operate 100% online; |
• | build new products and services, both internally or through third parties; |
• | acquire complementary products and services to expand our offerings and enhance our platform; |
• | attract and retain Learners and Experts and increase their engagement with/through our platform; |
• | manage the growth of our business, including increasing or unforeseen expenses; |
• | develop and scale a technology infrastructure to efficiently handle increased utilization by Learners, especially during peak periods; |
• | maintain and manage relationships with strategic partners; |
• | ensure our platform remains secure and protects the information of Learners, Experts, and other users; |
• | build and pursue a profitable business model and pricing strategy; |
• | compete with companies that offer similar services or products; |
• | expand into adjacent markets; |
• | navigate the ongoing evolution and uncertain application of regulatory requirements, such as privacy laws, to our business; and |
• | continue our expansion into new geographic markets, including markets outside the U.S. |
• | monetary exposure arising from or relating to failure to withhold and remit taxes, unpaid wages and wage and hour laws and requirements (such as those pertaining to failure to pay minimum wage and overtime, or to provide required breaks and wage statements), expense reimbursement, statutory and punitive damages, penalties, including related to attorney general actions by states, and government fines; |
• | injunctions prohibiting continuance of existing business practices; |
• | claims for employee benefits, social security, workers’ compensation, and unemployment; |
• | claims of discrimination, harassment, and retaliation under civil rights laws; |
• | manage the growth of our business, including increasing or unforeseen expenses; |
• | develop and scale a technology infrastructure to efficiently handle increased utilization by Learners, especially during peak periods; |
• | claims under laws pertaining to unionizing, collective bargaining, and other concerted activity; |
• | other claims, charges, or other proceedings under laws and regulations applicable to employers and employees, including risks relating to allegations of joint employer liability or agency liability; and |
• | harm to our reputation and brand. |
• | our ability to consistently provide Learners with a convenient, high quality experience; |
• | the pricing of our offerings in relation to other alternatives, including the prices charged by offline competitors and other learning alternatives; |
• | the quality and prices of our products and services that we offer to Learners and those of our competitors and other learning alternatives; |
• | our ability to acquire and retain Learners of all age segments; |
• | changes in standardized testing or admissions requirements; |
• | changes in college or university enrollment; |
• | changes in online versus in-person attendance at schools, colleges, or universities; |
• | changes in professional licensure, certification requirements, or regulations; |
• | changes in learning-related spending levels by consumers; |
• | the effectiveness of our sales and marketing efforts; |
• | seasonal demands for one-on-one |
• | our ability to introduce new products and services that are favorably received by Learners. |
• | Negative perceptions about online learning offerings and other non-traditional online servicesnon-traditional form of delivering learning and/or instruction direct-to-consumers one-on-one COVID-19 pandemic, telehealth services, and other non-traditional online services are becoming increasingly prevalent. If any of these online products or services fail to perform well, Learners may become reluctant to purchase or consume online offerings for fear that the learning experience may be substandard and begin to look for alternatives to online learning. |
• | Ineffective marketing efforts |
our execution of this strategy proves to be inefficient or unsuccessful in generating a sufficient quantity of high quality prospective Learners and Experts, our revenue could be adversely affected. |
• | Impact of the COVID-19 pandemic and other general economic and social conditions.COVID-19 pandemic. An improvement in the COVID-19 pandemic would have an unknown impact on our business and may reduce demand among potential Learners for direct-to-consumer COVID-19 pandemic would have an unknown impact on our business and may reduce the willingness of Learners to purchase or consume online learning services. |
• | We did not maintain effective controls over risk assessment, including designing and maintaining formal accounting and information technology (“IT”) policies, procedures, and controls over significant accounts and disclosures to achieve complete, accurate, and timely financial accounting, reporting, and disclosures, including segregation of duties controls, controls over the preparation and review of account reconciliations and journal entries, and controls over the review of assurance reports from third-party service organizations. |
• | We did not design and maintain effective controls over certain IT general controls for information systems that are relevant to the preparation of our financial statements. Specifically, we did not design and maintain: (i) program change management controls for financial systems to ensure that IT program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized, and implemented appropriately, (ii) user access controls to ensure appropriate segregation of duties and that adequately restrict user and privileged access to financial applications, programs, and data to appropriate Company personnel, and (iii) testing and approval controls for program development to ensure that new software development is aligned with business and IT requirements. |
• | Expanding the finance, accounting, and IT teams as a result of hiring of additional resources with an appropriate level of knowledge and prior experience in internal control over financial reporting commensurate with our financial reporting requirements, and supplementing with continued trainings on policies, regulations, and internal controls over financial reporting. |
• | Implementing a suite of policies and procedures in the areas of accounting, finance, governance, ethics, cybersecurity, and IT, and disseminating the policies and procedures through various communications and trainings. |
• | Conducting operational, cybersecurity, fraud, and financial reporting risk assessments and subsequently designing and working to implement an enhanced suite of internal controls over financial reporting addressing key areas, including segregation of duties, preparation and independent review of account reconciliations and journal entries, and review of third-party service organization assurance reports, as well as IT security, system development, and change management controls. |
• | Implementing a dedicated internal audit function to continuously promote and monitor compliance. |
• | complaints or negative publicity about us, Experts on our platform, our product offerings, or our policies and guidelines, including our practices and policies, even if factually incorrect or based on isolated incidents; |
• | illegal, negligent, reckless, or otherwise inappropriate behavior by Experts, Learners, or third parties; |
• | a failure to provide Experts with competitive compensation and opportunities to work with Learners; |
• | actual or perceived disruptions or defects in our platform, such as privacy or data security breaches, site outages, payment disruptions, or other incidents that impact the reliability of our offerings; |
• | litigation over, or investigations by regulators into, our platform or our business; |
• | Learners’ lack of awareness of, or compliance with, our policies and terms and conditions; |
• | Experts’ lack of awareness of, or compliance with, our terms and conditions; |
• | changes to our policies that Learners or others perceive as overly restrictive, unclear, or inconsistent with our values or mission, or that are not clearly articulated; |
• | changes to our terms and conditions that Experts perceive as overly restrictive, unclear, or inconsistent with our values, or mission or that are not clearly articulated; |
• | a failure to enforce our policies or terms and conditions in a manner that users perceive as effective, fair, and transparent; |
• | inadequate or unsatisfactory Learner support service experiences; |
• | illegal or otherwise inappropriate behavior by Experts, management team members, or other employees or contractors; |
• | negative responses by Experts or Learners to new offerings on our platform; |
• | impacts of COVID-19 generally; |
• | political or social policies or activities; or |
• | any of the foregoing with respect to our competitors, to the extent such resulting negative perception affects the public’s perception of us or our industry as a whole. |
• | satisfy existing Learners and institutions in, and attract and engage new Learners or institutions for, our offerings; |
• | attract qualified Experts to support expanding offerings and utilization; |
• | develop and produce new products; |
• | successfully introduce new features and enhancements and maintain a high level of functionality in our platform; and |
• | deliver high quality technical support and customer service to Experts and Learners using our platform. |
• | Learner dissatisfaction or changes in preference COVID-19 pandemic may subsequently reduce or discontinue their use of our services after the impact of the pandemic has tapered and in-person learning can safely be resumed. Factors outside our control related to Learners’ satisfaction with, and overall perception of, an offering may contribute to decreased retention rates for that offering. |
• | Poor performance by Experts in-person setting, if necessary. Our ability to maintain high Learner retention will depend in part on the ability of the Experts to devote the necessary time and effort to develop their own teaching style(s), lesson plans, course curriculum, and content. Inability of Experts to meet Learner needs could cause the quality of the instruction and the quality of the customer experience to decline, which could contribute to decreased Learner satisfaction and retention. |
• | Personal factors |
• | Circumvention of the platform/Disintermediation |
• | Timing of school and school districts’ funding sources and budget cycle |
• | Negative publicity. |
• | Changes in the composition of the school board or changes in school administration non-renewals even if there are no issues with our products and offerings. |
• | effectively recruit, onboard, motivate, and retain a large number of new employees, including in software engineering, data science, product, design, marketing, sales, and customer service, while retaining existing employees, maintaining the most important aspects of our corporate culture and effectively executing our business plan; |
• | effectively recruit, vet, contract, and curate a large number of new independent contractors, while retaining existing independent contractors, maintaining and improving our platform and its curation in connection with effectively executing our business plan; |
• | continue to improve our operational, financial, and management controls; |
• | protect and further develop our strategic assets, including our intellectual property rights; and |
• | make sound business decisions in light of the scrutiny associated with operating as a public company. |
• | competitors may develop service offerings that Learners find to be more compelling than ours; |
• | competitors may adopt more aggressive pricing policies and offer more attractive sales terms and adapt more quickly to new technologies and changes in student requirements; |
• | competitors may offer better compensation to Experts or divert qualified Experts from our platform; and |
• | current and potential competitors may establish relationships among themselves or with third parties to enhance their products and expand their markets, and our industry is likely to see an increasing number of new entrants and increased consolidation. Accordingly, new competitors may emerge and rapidly acquire significant market share. |
• | hurt our reputation; |
• | adversely affect our relationships with our current or future Learners, Experts, schools, school districts, or other instructors or business relationships; |
• | cause delays or stoppages in providing our offerings; |
• | divert management’s attention and resources; |
• | require technology changes to our platform or other software that could cause us to incur substantial cost; |
• | subject us to significant liabilities; or |
• | require us to cease some or all of our activities. |
• | timing of our costs incurred in connection with the launch of new offerings and the delay in receiving revenue from these new offerings, which delay may last for several years; |
• | seasonal variation driven by the seasonal nature of traditional academic calendars; |
• | changes in Learner purchases, utilization, and retention levels in our offerings; |
• | changes in our key metrics or the methods used to calculate our key metrics; |
• | changes in our pricing; |
• | changes in the mix of our product offerings; |
• | timing and amount of our marketing and sales expenses; |
• | costs necessary to improve and maintain our software platform; and |
• | changes in the prospects of the economy generally, which could alter current or prospective customers’ spending priorities or could increase the time it takes us to launch new offerings. |
• | actual or anticipated variations in our operating results; |
• | changes in financial estimates by us or by any securities analysts who might cover our stock; |
• | changes in laws and regulations affecting our business; |
• | conditions or trends in our industry; |
• | changes as a result of the COVID-19 pandemic or similar macroeconomic events; |
• | stock market price and volume fluctuations of comparable companies and, in particular, those that operate in the software and information technology industries; |
• | announcements by us or our competitors of new product or service offerings, significant acquisitions, strategic partnerships, or divestitures; |
• | announcements of investigations or regulatory scrutiny of our operations or lawsuits filed against us; |
• | the public’s reaction to our press releases, our other public announcements, and our filings with the SEC; |
• | capital commitments; |
• | commencement of, or involvement in, litigation involving Nerdy Inc.; |
• | investors’ general perception of our company and our business; |
• | recruitment or departure of key personnel, including Charles Cohn, our Founder, Chairman and Chief Executive Officer; |
• | sales of Class A Common Stock, including sales by our directors and officers or specific stockholders |
• | changes in Nerdy Inc.’s capital structure, such as future issuances of securities or the incurrence of additional debt; and |
• | the volume of shares of Class A Common Stock available for public sale. |
• | the ability of the Nerdy Inc. Board to issue shares of preferred stock, including “blank check” preferred stock, and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; |
• | the limitation of the liability of, and the indemnification of, Nerdy Inc.’s directors and officers; |
• | a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of stockholders after such date and could delay the ability of stockholders to force consideration of a stockholder proposal or to take action, including the removal of directors; |
• | the requirement that a special meeting of stockholders may be called only by the Chief Executive Officer, the Chairman of the Board, or the Nerdy Inc. Board, which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors; |
• | controlling the procedures for the conduct and scheduling of board of directors and stockholder meetings; |
• | the ability of the Nerdy Inc. Board to amend the bylaws, which may allow the Nerdy Inc. Board to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt; and |
• | advance notice procedures with which stockholders must comply to nominate candidates to the Nerdy Inc. Board or to propose matters to be acted upon at a stockholders’ meeting, which could preclude |
stockholders from bringing matters before annual or special meetings of stockholders and delay changes in the Nerdy Inc. Board, and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of Nerdy Inc. |
• | to proactively improve their academic performance; |
• | to remediate academic underperformance; |
• | for enrichment to learn about a subject they are passionate about or to advance a foundational skill they want to develop; |
• | to learn new professional and technical skills; |
• | to obtain professional and technical designations and certifications; |
• | to maximize their chances of admission into their school or program of choice, spanning private schools, to undergraduate programs, to graduate school, and beyond; and |
• | to address COVID-19-related |
• | Trust : |
• | Quality experience: AI-powered Learner-Expert matching engine intelligently matches Learners with Experts who best fit their specific needs in order to deliver effective live learning. Additionally, Learners benefit from our modern technology and learning tools, including adaptive testing capabilities, that support a collaborative interaction and optimize the learning experience. |
• | Convenience: pre-scheduled times and on-demand. |
• | Purpose-Built Technology: two-way video, collaborative work-spaces, recording and replay capabilities, and adaptive diagnostic testing, as well as integrated personalization features to facilitate instruction and provide a more engaging and enjoyable experience to Learners. |
• | Expansive range of subjects: |
• | Cost effective: |
• | Large Learner Population, Strong Income Potential, Less Hassle: |
• | Purpose-Built Technology: two-way video, collaborative work-spaces, recording and replay capabilities, and integrated personalization features to make delivering online instruction easy. |
• | Frictionless Payment Processing: on-time and securely with frequent direct deposits, alleviating administrative burden and hassle and allowing them to focus on helping Learners learn. |
• | Changing Workforce Dynamics: |
• | Secular Digitization of Learning: in-person interactions, increasing affordability, extending geographic access, and providing flexibility and convenience through on-demand online models. AI is the theory and development of computer systems able to perform tasks that normally require human intelligence. Machine learning is a method of data analysis that automates analytical model building. It is a branch of AI based on the idea that systems can learn from data, identify patterns, and make decisions with minimal human intervention. We leverage both internally developed and externally licensed capabilities related to AI, which allows large data sets to be leveraged and understood in a way that can generate substantial insights that drive the personalization of the learning experience. Increased digital connectivity between Learners, Experts, and other key stakeholders is improving communication and accountability to provide increased transparency into Learner achievement. These trends have only accelerated as the COVID-19 pandemic has provided an enormous catalyst, with global digital learning projected to grow at a 30% compound annual growth rate (“CAGR”) over the next seven years, according to GSV Ventures. |
• | Consumerization of Learning: direct-to-consumer on-demand. By providing numerous learning formats to help Learners access top Experts across a multitude of formats, including adaptive self-study tools, our platform empowers both Learners and Experts to have more agency, optimize interactions, and enhance their learning and instructing experience. |
• | Pandemic’s Impact on Learning Proficiency: shelter-in-place K-12 schools and colleges and universities throughout the United States (the “U.S.”). These closures have been a significant driver of learning loss in the last two years for students across the U.S. A recent McKinsey study suggests students are four months behind in mathematics and three months behind in reading with students where they otherwise would have been prior to the pandemic. The McKinsey report also notes the federal government has committed more than $200 billion to K-12 education through the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), the Coronavirus Response and Relief Supplemental Appropriations Act (the “CRRSAA”), and the American Rescue Plan (the “ARP”), which we believe will help to accelerate the adoption of third-party supplemental learning solutions by school districts, opening the door for the start of durable, long-term relationships. In the third quarter of 2021, we launched our institutional strategy with the introduction of Varsity Tutors for Schools, Varsity Tutors for Schools K-12 school districts and universities, as a durable, long-term opportunity to help improve the way supplemental learning is administered. |
• | Shift to Lifelong and Skills-based Learning: job-appropriate and up to-date skill sets. Additionally, technological advancements and their resulting transformational changes across industries are impacting skill requirements in today’s workplace. According to the Future of Jobs |
Report 2020 published by the World Economic Forum, companies hope to internally redeploy 50% of employees displaced by technological automation and augmentation. As a result, today’s workforce needs to constantly learn new concepts and skills to keep pace with fast-changing job requirements without the heavy penalty of having to temporarily exit the workforce. The Future of Jobs Report 2020 believes that companies looking to ensure success of these redeployment strategies will, among other things, need to direct their employees to effective resources and meaningful curricula. Our learning platform is ideally positioned to provide today’s professionals the flexibility to continue their learning journey at their convenience while acquiring the requisite skills across a vast range of subjects and multiple learning modalities, and also provide their employers with a return on their investment. |
• | Academic Tutoring: Academic Tutoring |
• | Professional Certifications, Training, & Skills: Professional Certifications, Training, & Skills |
• | Enrichment: Enrichment non-academic segments such as enrichment, visual arts, and technology. The size of this market in the U.S. is estimated to be $5.5 billion in 2020 and is projected to grow to $6.2 billion by 2025, according to IBISWorld research from June 2020. |
• | Test Preparation: Test Preparation |
• | Small Group Classes: re-inventing the in-person classroom online, allowing Learners to join up to 20 other peers for live lessons in a virtual classroom across a range of topics, including academic, enrichment, foreign languages, test prep, and professional certification. By using adaptive assessments to determine the proficiency of each Learner before placement, the class experience is more tailored to the individualized needs of participants. Classes are taught by highly qualified Experts with deep instructional and teaching experience. Through Q&A sessions, student projects, and individualized attention, the Experts are able to intimately engage with each Learner while providing a different, more social, less intensive, and lower cost solution than one-on-one |
• | Large Group Classes: |
• | Data Lake: |
• | Curation Layer: |
• | Matching Layer: AI-powered Learner-Expert matching engine analyzes approximately 100 high dimensional features per Learner and Expert to identify the Learner-to-Expert Learner-to-Expert |
• | Adaptive Learning Layer: |
• | Interaction Layers: two-way video, collaborative workspaces purpose-built for learning, a companion app to enhance the interactivity of sessions in real-time, reference tools, proprietary and third party content integrations, and additional subject-specific tools. These features enable effective on-demand, integrated and personalized live learning interaction that increases engagement and Learner satisfaction. Our interactive learning platform serves multiple learning formats meeting the individual preferences of each Learner and empowering them to acquire knowledge in any chosen subject. |
• | Immediately prior to the Closing, TPG Pace became a Delaware corporation and was renamed Nerdy Inc.; |
• | TPG Pace’s outstanding Class A ordinary shares and Class F ordinary shares were converted into corresponding shares of Nerdy Inc.’s Class A common stock, par value $0.0001 per share (the “Class A Common Stock”) and Class F common stock, par value $0.0001 per share (the “Class F Common Stock”) and its outstanding private placement warrants and public warrants to purchase Class A ordinary shares were converted into corresponding private placement warrants to purchase Class A Common Stock (the “Private Placement Warrant(s)”) and public warrants to purchase Class A Common Stock (the “Public Warrant(s)”), respectively, (collectively, the “Domestication”). Each Private Placement Warrant and Public Warrant allows for the purchase of one share of Class A Common Stock at an exercise price of $11.50 per share. The shares of Class F Common Stock were subsequently converted to shares of Class A Common Stock; |
• | Following the Domestication, Nerdy LLC merged with a wholly-owned subsidiary of Nerdy Inc. (the “Merger”), with Nerdy LLC surviving such merger; |
• | In accordance with Nerdy LLC’s amended and restated limited liability company agreement (the “Nerdy LLC Agreement”), existing ownership interests in Nerdy LLC (including redeemable preferred units) were converted into Nerdy LLC units (the “OpCo Units”). Additionally, the Nerdy LLC Agreement provided that Nerdy LLC will be managed by a five person board of managers; |
• | Holders of Nerdy LLC common and preferred units (the “Legacy Nerdy Holders”) exchanged their historical Nerdy LLC equity for: (i) cash consideration of $336,846 thousand, of which $767 thousand was accrued and reported as “Due to legacy Nerdy holders” on the Consolidated Balance Sheet at December 31, 2021, (ii) either OpCo Units and an equivalent number of shares of Nerdy Inc.’s Class B common stock, $0.0001 par value per share (the “Class B Common Stock”) or shares of Class A Common Stock, and (iii) warrants to purchase OpCo Units at an exercise price of $11.50 (the exercise of which would also result in the issuance of one corresponding share of Class B Common Stock) (the “OpCo Warrant(s)”) or Private Placement Warrants at an exercise price of $11.50; |
• | Nerdy Inc. contributed all of its assets (other than the OpCo Units it then held) to Nerdy LLC in exchange for additional OpCo Units and OpCo Warrants, such that the Company will hold a number of OpCo Units equal to the total number of shares of Class A Common Stock and OpCo Warrants equal to the total number of Public Warrants; |
• | Nerdy Inc. issued and sold 15,000 thousand shares of Class A Common Stock for aggregate consideration of $150,000 thousand in connection with the PIPE Financing; and |
• | Nerdy Inc. issued and sold 16,117 thousand shares of Class A Common Stock and 3,000 thousand warrants to purchase Class A Common Stock (the “FPA Warrant(s)”) for aggregate consideration of $150,000 thousand in connection with the FPA Financing. Each FPA Warrant allows for the purchase of one share of Class A Common Stock at an exercise price of $11.50 per share. |
• | Nerdy Inc. is a holding company that has no material assets other than its ownership interests in Nerdy LLC and its indirect interests in the subsidiaries of Nerdy LLC, and has no independent means of generating revenue or cash flow; |
• | Nerdy Inc. had the following securities outstanding: (i) 83,875 thousand shares of Class A Common Stock, including Earnouts (as defined below), (ii) 73,971 thousand shares of Class B Common Stock, including Earnouts, held by certain of the Legacy Nerdy Holders, and (iii) 17,281 thousand warrants, each exercisable to purchase one share of Class A Common Stock at a price of $11.50 per share; |
• | Members of Nerdy LLC are the Legacy Nerdy Holders and Nerdy Inc.; |
• | Nerdy LLC had the following OpCo Units and OpCo Warrants outstanding: (i) 157,846 thousand OpCo Units, including Earnouts, and (ii) 2,052 thousand OpCo Warrants; |
• | Legacy Nerdy Holders owned 70,613 thousand OpCo Units, excluding Earnouts, equal to 47.1% of the economic interest in Nerdy LLC, and 70,613 thousand shares of Class B Common Stock, excluding Earnouts, which, together (the “Combined Interests”), are redeemable beginning six months after the Closing Date at the option of the Legacy Nerdy Holders on a one-for-one |
• | Public stockholders of Nerdy Inc., including certain Legacy Nerdy Holders, (i) owned 79,233 thousand shares of Class A Common Stock, excluding Earnouts, which represented 52.9% of the combined voting power of Nerdy Inc. and 100% of the economic interest in Nerdy Inc., and (ii) through Nerdy Inc.’s ownership of 79,233 thousand OpCo Units, indirectly held 52.9% of the economic interest in Nerdy LLC; |
• | Nerdy LLC is managed by a five person board of managers, composed of three persons that were designated by Nerdy Inc. and two persons that were designated by holders of a majority of the OpCo Units held by members of Nerdy LLC other than Nerdy Inc. Nerdy LLC’s management will continue to manage Nerdy LLC and all of its related and affiliated entities (subject to the approval of Nerdy Inc.’s Board of Directors) and Nerdy Inc.’s executive officers serve as the executive officers for all of its related and affiliated entities; and |
• | Financial results of Nerdy LLC and its wholly-owned subsidiaries are consolidated with and into Nerdy Inc., and following the Reverse Recapitalization on September 20, 2021, a portion of the consolidated net earnings (loss) of Nerdy LLC, which the Legacy Nerdy Holders are entitled to or are required to absorb, are allocated to the noncontrolling interests (the “NCI”). The Company has excluded Earnouts in the calculation of the ownership interests in Nerdy LLC as the Earnouts are subject to forfeiture if the achievement of certain stock price thresholds are not met within five years of the Reverse Recapitalization. To the extent these price thresholds are met, the Earnouts will no longer be subject to forfeiture and the units will then be included in the calculation of the ownership interests in Nerdy LLC. |
Three Months Ended March 31, |
Change |
|||||||||||
Active Learners in ones; favorable/(unfavorable) |
2022 |
2021 |
% |
|||||||||
Active Learners |
73,578 | 47,231 | 56 | % |
Three Months Ended March 31, |
Change |
|||||||||||
dollars in ones; favorable/(unfavorable) |
2022 |
2021 |
% |
|||||||||
Revenue per Active Learner |
$ | 638 | $ | 732 | (13 | )% |
Three Months Ended March 31, |
Change |
|||||||||||
sessions in thousands; favorable/(unfavorable) |
2022 |
2021 |
% |
|||||||||
Online Sessions |
748 | 477 | 57 | % |
Three Months Ended March 31, |
Change |
|||||||||||
sessions in ones: favorable/(unfavorable) |
2022 |
2021 |
% |
|||||||||
Sessions Taught per Active Expert |
42 | 43 | (2 | )% |
Three Months Ended March 31, |
Change |
|||||||||||
in hours: favorable/(unfavorable) |
2022 |
2021 |
% |
|||||||||
One-on-One Average Session Length |
1.28 | 1.30 | (2 | )% |
Year Ended December 31, |
Change |
Year Ended December 31, |
Change |
|||||||||||||||||||||
Active Learners in ones; favorable/(unfavorable) |
2021 |
2020 |
% |
2020 |
2019 |
% |
||||||||||||||||||
Active Learners |
126,519 | 86,614 | 46 | % | 86,614 | 63,060 | 37 | % |
Year Ended December 31, |
Change |
Year Ended December 31, |
Change |
|||||||||||||||||||||
dollars in ones; favorable/(unfavorable) |
2021 |
2020 |
% |
2020 |
2019 |
% |
||||||||||||||||||
Revenue per Active Learner |
$ | 1,112 | $ | 1,125 | (1 | )% | $ | 1,125 | $ | 1,021 | 10 | % |
Year Ended December 31, |
Change |
Year Ended December 31, |
Change |
|||||||||||||||||||||
sessions in thousands; favorable/(unfavorable) |
2021 |
2020 |
% |
2020 |
2019 |
% |
||||||||||||||||||
Online Sessions |
1,921 | 1,113 | 73 | % | 1,113 | 549 | 103 | % |
Year Ended December 31, |
Change |
Year Ended December 31, |
Change |
|||||||||||||||||||||
sessions in ones: favorable/(unfavorable) |
2021 |
2020 |
% |
2020 |
2019 |
% |
||||||||||||||||||
Sessions Taught per Active Expert |
80 | 67 | 19 | % | 67 | 54 | 24 | % |
Year Ended December 31, |
Change |
Year Ended December 31, |
Change |
|||||||||||||||||||||
in hours: favorable/(unfavorable) |
2021 |
2020 |
% |
2020 |
2019 |
% |
||||||||||||||||||
One-on-One |
1.32 | 1.39 | (5 | )% | 1.39 | 1.49 | (7 | )% |
Three Months Ended March 31, |
||||||||||||||||
dollars in thousands |
2022 |
% |
2021 |
% |
||||||||||||
Revenue |
$ | 46,925 | 100 | % | $ | 34,565 | 100 | % | ||||||||
Cost of revenue |
14,152 | 30 | % | 11,192 | 32 | % | ||||||||||
|
|
|
|
|||||||||||||
Gross Profit |
32,773 | 70 | % | 23,373 | 68 | % | ||||||||||
Sales and marketing expenses |
22,496 | 49 | % | 14,582 | 42 | % | ||||||||||
General and administrative expenses |
30,509 | 65 | % | 13,245 | 38 | % | ||||||||||
|
|
|
|
|||||||||||||
Operating Loss |
(20,682 | ) | (44 | )% | (4,454 | ) | (13 | )% | ||||||||
Unrealized loss on derivatives |
11,042 | (24 | )% | — | — | % | ||||||||||
Interest (income) expense, net |
(7 | ) | — | 1,237 | 4 | % | ||||||||||
Other expense, net |
17 | — | 35 | — | % | |||||||||||
|
|
|
|
|||||||||||||
Loss before Income Taxes |
(31,734 | ) | (68 | )% | (5,726 | ) | (17 | )% | ||||||||
Income tax expense |
13 | — | % | — | — | % | ||||||||||
|
|
|
|
|||||||||||||
Net Loss |
(31,747 | ) | (68 | )% | (5,726 | ) | (17 | )% | ||||||||
Net loss attributable to legacy Nerdy holders prior to the reverse recapitalization |
— | — | % | (5,726 | ) | (17 | )% | |||||||||
Net loss attributable to noncontrolling interests |
(14,902 | ) | (32 | ) | — | — | % | |||||||||
|
|
|
|
|||||||||||||
Net Loss Attributable to Class A Common Stockholders |
$ | (16,845 | ) | (36 | )% | $ | — | — | % | |||||||
|
|
|
|
Three Months Ended March 31, |
||||||||||||||||
dollars in thousands |
2022 |
% |
2021 |
% |
||||||||||||
One-on-one |
$ | 39,039 | 83 | % | $ | 30,860 | 90 | % | ||||||||
Class and group |
6,354 | 14 | % | 1,850 | 5 | % | ||||||||||
Other (a) |
1,532 | 3 | % | 1,855 | 5 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Revenue |
$ | 46,925 | 100 | % | $ | 34,565 | 100 | % | ||||||||
|
|
|
|
|
|
|
|
(a) | Other consists of the Legacy Businesses and other services. |
Three Months Ended March 31, |
Change |
|||||||||||||||
dollars in thousands; favorable/(unfavorable) |
2022 |
2021 |
$ |
% |
||||||||||||
Revenue |
$ | 46,925 | $ | 34,565 | $ | 12,360 | 36 | % | ||||||||
Cost of revenue |
14,152 | 11,192 | (2,960 | ) | (26 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross Profit |
$ | 32,773 | $ | 23,373 | $ | 9,400 | 40 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
% Margin |
70 | % | 68 | % |
Three Months Ended March 31, |
Change |
|||||||||||||||
dollars in thousands; favorable/(unfavorable) |
2022 |
2021 |
$ |
% |
||||||||||||
Sales and marketing expenses |
$ | 22,946 | $ | 14,582 | $ | (8,364 | ) | (57 | )% | |||||||
General and administrative expenses |
30,509 | 13,245 | (17,264 | ) | (130 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
$ | 53,455 | $ | 27,827 | $ | (25,628 | ) | (92 | )% | |||||||
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||||||||||||||
dollars in thousands |
2021 |
% |
2020 |
% |
2019 |
% |
||||||||||||||||||
Revenue |
$ | 140,664 | 100 | % | $ | 103,968 | 100 | % | $ | 90,452 | 100 | % | ||||||||||||
Cost of revenue |
46,700 | 33 | % | 34,834 | 34 | % | 30,830 | 34 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Gross Profit |
93,964 | 67 | % | 69,134 | 66 | % | 59,622 | 66 | % | |||||||||||||||
Sales and marketing expenses |
65,441 | 47 | % | 43,838 | 42 | % | 37,967 | 42 | % | |||||||||||||||
General and administrative expenses |
121,968 | 87 | % | 43,231 | 42 | % | 42,192 | 47 | % | |||||||||||||||
Write-off of other intangible assets |
3,009 | 2 | % | — | — | % | — | — | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating Loss |
(96,454 | ) | (69 | )% | (17,935 | ) | (17 | )% | (20,537 | ) | (23 | )% | ||||||||||||
Unrealized gain on derivatives |
(71,041 | ) | (51 | )% | — | — | % | — | — | % | ||||||||||||||
Interest expense |
3,791 | 3 | % | 4,904 | 5 | % | 2,101 | 2 | % | |||||||||||||||
Other expense (income), net |
8,552 | 6 | % | 1,824 | 2 | % | (199 | ) | — | % | ||||||||||||||
Gain on extinguishment of debt, net |
(7,117 | ) | (5 | )% | — | — | % | — | — | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Loss before Income Taxes |
(30,639 | ) | (22 | )% | (24,663 | ) | (24 | )% | (22,439 | ) | (25 | )% | ||||||||||||
Income tax expense |
40 | — | % | — | — | % | — | — | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net Loss |
(30,679 | ) | (22 | )% | (24,663 | ) | (24 | )% | (22,439 | ) | (25 | )% | ||||||||||||
Net loss attributable to legacy Nerdy holders prior to the reverse recapitalization |
(23,546 | ) | (17 | )% | (24,663 | ) | (24 | )% | (22,439 | ) | (25 | )% | ||||||||||||
Net loss attributable to noncontrolling interests |
(3,354 | ) | (2 | )% | — | — | % | — | — | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net Loss Attributable to Class A Common Stockholders |
$ | (3,779 | ) | (3 | )% | $ | — | — | % | $ | — | — | % | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||||||||||||||
dollars in thousands |
2021 |
% |
2020 |
% |
2019 |
% |
||||||||||||||||||
Online |
$ | 140,664 | 100 | % | $ | 97,440 | 94 | % | $ | 64,378 | 71 | % | ||||||||||||
In-person |
— | — | 6,528 | 6 | % | 26,074 | 29 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Revenue |
$ | 140,664 | 100 | % | $ | 103,968 | 100 | % | $ | 90,452 | 100 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
Change |
Year Ended December 31, |
Change |
|||||||||||||||||||||||||||||
dollars in thousands; favorable/(unfavorable) |
2021 |
2020 |
$ |
% |
2020 |
2019 |
$ |
% |
||||||||||||||||||||||||
Revenue |
$ | 140,664 | $ | 103,968 | $ | 36,696 | 35 | % | $ | 103,968 | $ | 90,452 | $ | 13,516 | 15 | % | ||||||||||||||||
Cost of revenue |
46,700 | 34,834 | (11,866 | ) | (34 | )% | 34,834 | 30,830 | (4,004 | ) | (13 | )% | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Gross Profit |
$ | 93,964 | $ | 69,134 | $ | 24,830 | 36 | % | $ | 69,134 | $ | 59,622 | $ | 9,512 | 16 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
% Margin |
67 | % | 66 | % | 66 | % | 66 | % |
Year Ended December 31, |
Change |
Year Ended December 31, |
Change |
|||||||||||||||||||||||||||||
dollars in thousands; favorable/(unfavorable) |
2021 |
2020 |
$ |
% |
2020 |
2019 |
$ |
% |
||||||||||||||||||||||||
Sales and marketing expenses |
$ | 65,441 | $ | 43,838 | $ | (21,603 | ) | (49 | )% | $ | 43,838 | $ | 37,967 | $ | (5,871 | ) | (15 | )% | ||||||||||||||
General and administrative expenses |
121,968 | 43,231 | (78,737 | ) | (182 | )% | 43,231 | 42,192 | (1,039 | ) | (2 | )% | ||||||||||||||||||||
Write-off of other intangible assets |
3,009 | — | (3,009 | ) | (100 | )% | — | — | — | — | % | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total operating expenses |
$ | 190,418 | $ | 87,069 | $ | (103,349 | ) | (119 | )% | $ | 87,069 | $ | 80,159 | $ | (6,910 | ) | (9 | )% | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in thousands |
Year Ended December 31, 2021 |
|||
Computed tax (21%) |
$ | (1,489 | ) | |
Partnership outside basis adjustments |
(8,827 | ) | ||
Income tax benefit attributable to NCI |
797 | |||
Change in valuation allowance |
9,812 | |||
State income tax benefit, net of effect on federal tax |
(190 | ) | ||
Other, net (none in excess of 5% of computed tax) |
(63 | ) | ||
|
|
|||
Income tax expense |
$ | 40 | ||
|
|
Three Months Ended March 31, |
Year Ended December 31, |
|||||||||||||||||||
dollars in thousands |
2022 |
2021 |
2021 |
2020 |
2019 |
|||||||||||||||
Cash (used in) provided by: |
||||||||||||||||||||
Operating activities |
$ | (931 | ) | $ | (2,415 | ) | $ | (38,891 | ) | $ | (6,654 | ) | $ | (16,318 | ) | |||||
Investing activities |
(1,264 | ) | (848 | ) | (5,163 | ) | (2,874 | ) | (6,356 | ) | ||||||||||
Financing activities |
(816 | ) | (444 | ) | 159,250 | 12,293 | 24,387 | |||||||||||||
Effect of Exchange Rate Change on Cash, cash equivalents and restricted cash |
(5 | ) | 7 | 1 | 21 | 28 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net (decrease) increase in Cash, cash equivalents and restricted cash |
$ | (3,016 | ) | $ | (3,700 | ) | $ | 115,197 | $ | 2,786 | $ | 1,741 | ||||||||
|
|
|
|
|
|
|
|
|
|
• | Charles Cohn, our Founder, Chairman & Chief Executive Officer; |
• | Ian Clarkson, our President and Chief Operating Officer; and |
• | Heidi Robinson, our Chief Product Officer. |
Name and Principal Position |
Year |
Salary ($) |
Bonus ($)(1) |
Stock Awards ($)(2) |
Option Awards ($)(2) |
All Other Compensation ($)(3) |
Total ($) |
|||||||||||||||||||||
Charles Cohn, Chief Executive Officer |
2021 | 197,582 | — | 46,877,000 | — | 198,525 | (4) | 47,273,107 | ||||||||||||||||||||
2020 | 270,375 | — | — | — | 2,352 | 272,727 | ||||||||||||||||||||||
Ian Clarkson, |
2021 | 551,848 | — | 6,233,572 | 16,592,028 | 5,270 | 23,382,718 | |||||||||||||||||||||
President and Chief Operating Officer |
2020 | 547,289 | 25,000 | — | — | 4,222 | 576,511 | |||||||||||||||||||||
Heidi Robinson, Chief Product Officer |
2021 | 374,710 | — | 4,137,462 | 56,296 | 4,724 | 4,573,192 | |||||||||||||||||||||
2020 | 369,829 | 25,000 | — | 188,370 | 1,978 | 585,177 |
(1) | The amounts reported for 2020 represent a discretionary cash bonus paid to certain employees to reflect our performance in 2020. |
(2) | The amounts reported represent the aggregate grant date fair value of stock options, restricted stock units, and warrants awarded to the NEOs in 2021 and profits units awarded to the NEOs in 2020, as applicable, calculated in accordance with FASB ASC Topic 718. Such grant date fair value does not take into account any estimated forfeitures. The assumptions used in calculating the grant date fair value are set forth in Note 18 to our audited consolidated financial statements for the year ended December 31, 2021. These amounts do not correspond to the actual value that may be recognized by the NEOs upon vesting or exercise of the applicable awards. See the below section titled “Founder, Chairman, and CEO Compensation” for additional information related to Mr. Cohn’s equity-based award. |
(3) | The amounts reported represent matching contributions under the Company’s 401(k) plan except as otherwise noted. |
(4) | The amounts reported represent $3,328 of matching contributions under the Company’s 401(k) plan, $70,197 of payments of legal fees related to Mr. Cohn’s employment, and $125,000 of payments to the Federal Trade Commission under the Hart-Scott-Rodino Act. |
Stock Price Hurdle |
Number of Restricted Stock Units |
Aggregate % of Restricted Stock Units | ||
$18.00 |
1,322,614 | 14.29% | ||
$22.00 |
1,322,614 | 28.57% | ||
$26.00 |
1,322,614 | 42.86% | ||
$30.00 |
1,322,614 | 57.14% | ||
$34.00 |
1,322,614 | 71.43% | ||
$38.00 |
1,322,614 | 85.71% | ||
$42.00 |
1,322,614 | 100% |
Option Awards |
Stock Awards |
|||||||||||||||||||||||||||||||
Name |
Number of Securities Underlying Options (#) Exercisable |
Number of Securities Underlying Unexercised Options (#) Unexercisable |
Exercise Price ($) |
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 ($)(1) |
Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights that have not Vested (#) |
Equity Incentive Plan Awards: Market or Payout Value of Shares, Units, or Other Rights that have not Vested ($)(1) |
||||||||||||||||||||||||
Charles Cohn, Chief Executive Offcer |
— | — | — | — | — | — | 9,258,298 | (10) | 41,662,341 | |||||||||||||||||||||||
Ian Clarkson, President and Chief Operating Officer |
— | 2,600,000 | (3) | 11.20 | 9/20/2031 | 48,223 | (4) | 217,004 | — | — | ||||||||||||||||||||||
98,161 | (2) | — | 11.50 | 9/20/2026 | 487,063 | (5) | 2,191,784 | — | — | |||||||||||||||||||||||
— | — | — | — | 397,813 | (5) | 1,790,159 | — | — | ||||||||||||||||||||||||
— | — | — | — | — | — | 841,680 | (11) | 3,787,560 | ||||||||||||||||||||||||
Heidi Robinson, Chief Product Officer |
26,063 | (2) | — | 11.50 | 9/20/2026 | 6,705 | (6) | 30,173 | — | — | ||||||||||||||||||||||
— | — | — | — | 80,516 | (7) | 362,322 | — | — | ||||||||||||||||||||||||
— | — | — | — | 86,353 | (8) | 388,589 | — | — | ||||||||||||||||||||||||
— | — | — | — | 144,589 | (9) | 650,651 | — | — | ||||||||||||||||||||||||
— | — | — | — | — | — | 400,000 | (12) | 1,800,000 | ||||||||||||||||||||||||
— | — | — | — | — | — | 258,979 | (13) | 1,165,406 |
(1) | The market value of restricted stock units (“RSUs”) and RSAs that have not vested is based on the number of unvested RSUs and RSAs outstanding multiplied by $4.50, which was the closing price of our Class A Common Stock on the New York Stock Exchange on December 31, 2021. |
(2) | Stock warrants to purchase one share of Class B Common Stock at an exercise price of $11.50 per share. |
(3) | Non-qualified stock options. 472,732 non-qualified stock options are exercisable on August 15, 2022. The remaining 2,127,268 non-qualified stock options exercisable in equal monthly installments beginning on September 14, 2022 and ending February 15, 2027. |
(4) | Restricted stock awards that vest in equal monthly installments through March 12, 2022. |
(5) | Restricted stock awards that vest in equal installments on July 5, 2022, 2023, and 2024. |
(6) | Restricted stock awards that vest in equal monthly installments through February 28, 2022. |
(7) | Restricted stock awards that vest in equal monthly installments through April 26, 2023. |
(8) | Restricted stock awards that vest in equal quarterly installments through July 26, 2024. |
(9) | Restricted stock awards that vest in equal monthly installments through June 12, 2024 |
(10) | Represents performance RSUs, which shall vest in seven equal tranches upon us achieving each of seven share price target milestones that occur at $18.00, $22.00, $26.00, $30.00, $34.00, $38.00, and $42.00 per share, measured based on the average of our stock price over a consecutive 90 calendar-day period during the performance period. Any unvested RSUs shall expire on September 20, 2028. See the above section titled “Founder, Chairman, and CEO Compensation” for additional information related to Mr. Cohn’s equity-based award. |
(11) | Restricted stock units. 153,033 restricted stock units vest on February 15, 2023. The remaining 688,647 restricted stock units vest in equal monthly installments beginning on March 15, 2023 and ending August 15, 2027. |
(12) | Restricted stock units. 40,000 restricted stock units vest on February 15, 2022. 20,000 restricted stock units vest on May 15, 2022 and August 15, 2022. 100,000 restricted stock units vest in equal quarterly installments beginning on November 15, 2022 and ending August 15, 2023. 220,000 restricted stock vest in equal quarterly installments beginning on November 15, 2023 and ending August 15, 2025. |
(13) | Restricted stock units. 51,796 restricted stock units vest in equal quarterly installments beginning on May 15, 2022 and ending February 15, 2023. 64,748 restricted stock units vest in equal quarterly installments beginning on May 15, 2023 and ending February 15, 2024. 142,435 restricted stock units vest in equal quarterly installments beginning on May 15, 2024 and ending February 15, 2026. |
Name |
Fees Earned or Paid in Cash ($) |
Option Awards ($)(1)(2) |
All Other Compensation ($) |
Total ($) |
||||||||||||
Catherine Beaudoin |
— | 243,194 | — | 243,194 | ||||||||||||
Erik Blachford |
— | 238,884 | — | 238,884 | ||||||||||||
Rob Hutter |
— | 227,802 | — | 227,802 | ||||||||||||
Christopher (Woody) Marshall |
— | 252,429 | — | 252,429 | ||||||||||||
Greg Mrva(3) |
— | — | — | — | ||||||||||||
Kathleen Philips |
— | 521,310 | — | 521,310 |
(1) | The amounts reported represent the aggregate grant date fair value of the stock options awarded to the non-employee directors in the year ended December 31, 2021, calculated in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, “Compensation—Stock Compensation (Topic 718).” Such grant date fair values do not take into account any estimated forfeitures. The assumptions used in calculating the grant date fair value of the stock options |
reported in this column are set forth in Note 18 to our audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2021. The amounts reported in this column reflect the accounting cost for these stock options and do not correspond to the actual economic value actually received by the non-employee directors or that may be received by the non-employee directors upon the exercise of the stock options or any sale of the underlying shares of Class A Common Stock. |
(2) | The amounts granted to directors for the year ended December 31, 2021 assumed a $10 per share stock price. |
(3) | For the year ended December 31, 2021, Mr. Mrva declined his Nerdy director grant. |
(4) | For the year ended December 31, 2021, Ms. Philips received an initial, one-time equity award as a result of being named a director during the year. |
Option Awards |
Stock Awards |
|||||||||||
Directors |
Number of Securities Underlying Options (#) Exercisable |
Number of Securities Underlying Unexercised Options (#) Unexercisable |
Number of Shares or Units of Stock that have not Vested (#)(1) |
|||||||||
Catherine Beaudoin |
— | 39,500 | 99,767 | |||||||||
Erik Blachford |
— | 38,800 | 107,168 | |||||||||
Rob Hutter |
— | 37,000 | — | |||||||||
Christopher (Woody) Marshall |
— | 41,000 | — | |||||||||
Greg Mrva(2) |
— | — | — | |||||||||
Kathleen Philips |
— | 84,800 | — |
(1) | As of December 31, 2021, unvested restricted stock awards (“RSAs”) of Nerdy Inc., which corresponds to the same number of unvested shares of Class B Common Stock of Nerdy. |
(2) | For the year ended December 31, 2021, Mr. Mrva declined his Nerdy director grant. |
Annual Retainer |
||||
Board of Directors: |
||||
All non-employee directors |
$ | 35,000 | ||
Audit Committee: |
||||
Members |
8,000 | |||
Chair |
20,000 | |||
Compensation Committee: |
||||
Members |
5,000 | |||
Chair |
12,000 | |||
Nominating and Corporate Governance Committee: |
||||
Members |
4,000 | |||
Chair |
7,500 |
Name |
Age |
Position | ||
Charles Cohn |
36 | Chief Executive Officer, Chairman and Class I Director | ||
Ian Clarkson |
50 | President and Chief Operating Officer | ||
Jason Pello |
43 | Chief Financial Officer | ||
Heidi Robinson |
48 | Chief Product Officer | ||
Chris Swenson |
51 | Chief Legal Officer | ||
Catherine Beaudoin |
58 | Class III Director | ||
Erik Blachford |
55 | Class III Director | ||
Rob Hutter |
50 | Class II Director | ||
Christopher (Woody) Marshall |
54 | Class II Director | ||
Greg Mrva |
52 | Class I Director | ||
Kathleen Philips |
55 | Class III Director |
• | each person who is known by the Company to own beneficially more than 5% of the outstanding shares of the Company’s voting securities; |
• | each of the Company’s current executive officers and directors; and |
• | all current executive officers and directors of the Company, as a group. |
Name and Address of Beneficial Owners |
Number of Shares of Class A Common Stock |
Number of Shares of Class B Common Stock (1) |
% of Total Voting Power (2) |
|||||||||
Directors and Executive Officers: |
||||||||||||
Charles Cohn (3) |
— | 42,135,365 | 25.2 | |||||||||
Ian Clarkson |
— | 3,978,763 | 2.4 | |||||||||
Heidi Robinson |
40,000 | 1,173,169 | * | |||||||||
Chris Swenson |
35,000 | 821,151 | * | |||||||||
Jason Pello |
206,584 | — | * | |||||||||
Catherine Beaudoin |
— | 48,458 | * | |||||||||
Erik Blachford |
— | 473,778 | * | |||||||||
Rob Hutter |
— | — | — | |||||||||
Christopher (Woody) Marshall |
— | — | — | |||||||||
Greg Mrva |
150,000 | — | * | |||||||||
Kathleen Philips |
70,000 | — | * | |||||||||
All directors and executive officers as a group (11 individuals) |
501,584 | 48,630,684 | 29.4 | |||||||||
Five Percent Holders: |
||||||||||||
Entities affiliated with TCV (4) |
4,153,956 | 17,496,469 | 13.0 | |||||||||
TPG Pace Tech Opportunities Sponsor, Series LLC (5) |
16,612,139 | — | 9.9 | |||||||||
Light Street Capital Management, LLC (6) |
11,256,202 | — | 6.7 | |||||||||
Entities affiliated with Learn Capital (7) |
8,892,385 | 1,281,539 | 6.1 |
* | Less than 1% |
(1) | Each share of common stock entitles the holder thereof to one vote per share. Subject to the terms of the Second Amended and Restated Limited Liability Company Agreement of Nerdy LLC, the OpCo Units, together with an equal number of shares of Class B common stock, are exchangeable for either cash or shares of Class A common stock on a one-for-one six-month anniversary of the Closing, subject to earlier termination upon the occurrence of certain events. |
(2) | Represents percentage of voting power of the holders of Class A common stock and Class B common stock of the Company voting together as a single class. |
(3) | Consists of common stock held by (i) Charles K. Cohn VT Trust U/A/D May 26, 2017 and (ii) Cohn Investments, LLC,. Mr. Cohn is the beneficial owner of the Charles K. Cohn VT Trust U/A/D May 26, 2017 and the sole managing member of Cohn Investments, LLC. |
(4) | Based solely on a Schedule 13D filed with the SEC on September 30, 2021, consists of shares of Common Stock held by (i) TCV VIII (A), L.P. (“TCV VIII (A)”), and (ii) TCV VIII VT Master, L.P. (“TCV Master Fund”). The general partner of TCV Master Fund is TCV VIII VT Master GP, LLC (“Master GP”). The managing member of Master GP is TCV VIII, L.P. (“TCV VIII”). The direct general partner of TCV VIII and TCV VIII (A) is Technology Crossover Management VIII, L.P. (“TCM VIII”). The general partner of TCM VIII is Technology Crossover Management VIII, Ltd. (“Management VIII”). Each of TCM VIII and Management VIII may be deemed to beneficially own the shares held by TCV VIII (A). Each of Master GP, TCV VIII, TCM VIII and Management VIII may be deemed to beneficially own the shares held by TCV Master Fund. Each of Master GP, TCV VIII, TCM VIII and Management VIII disclaims beneficial ownership of such shares, except to the extent of any pecuniary interest therein. The address for these entities is 250 Middlefield Road, Menlo Park, CA 94025. |
(5) | Based solely on a Schedule 13G/A filed with the SEC on February 11, 2022. The managing member of TPG Pace Tech Opportunities Sponsor, Series LLC is TPG Pace Governance, LLC, a Cayman Islands limited liability company, which is controlled by David Bonderman, James G. Coulter, and Karl Peterson. Messrs. Bonderman, Coulter, and Peterson may therefore be deemed to beneficially own the shares held by TPG Pace Tech Opportunities Sponsor, Series LLC. Messrs. Bonderman, Coulter and Peterson disclaim beneficial ownership of the shares held by TPG Pace Tech Opportunities Sponsor, Series LLC except to the extent of their pecuniary interest therein. The address of each of the entities and individuals in this footnote is 301 Commerce St., Suite 3300, Fort Worth, TX 76102. |
(6) | Based solely on a Schedule 13G/A filed with the SEC on February 14, 2022, consists of shares of Class A Common Stock held by Light Street Capital Management, LLC, a Cayman Islands limited liability company (“LSCM”). LSCM serves as the general partner to Light Street Mercury Master Fund, L.P., a Cayman Islands limited liability company (“Mercury”), and, in such capacity, exercises voting and investment power over Shares of Class A Common Stock held by Mercury. Glen Thomas Kacher is the Chief Investment Officer of LSCM and may be deemed to have shared voting control and investment discretion over securities owned by LSCM. The mailing address for LSCM is 525 University Avenue, Suite 300, Palo Alto, CA 9430. |
(7) | Based solely on a Schedule 13G filed with the SEC on February 14, 2022, consists of shares of Common Stock held by (i) Learn Capital Special Opportunities Fund X, L.P. (“LC Fund X”), (ii) Learn Capital Special Opportunities Fund XI, L.P. (“LC Fund XI”), (iii) Learn Capital Special Opportunities Fund XII, L.P. (“LC Fund XII”), (iv) Learn Capital Special Opportunities Fund XIII, L.P. (“LC Fund XIII”), (v) Learn Capital Special Opportunities Fund XIV, L.P. (“LC Fund XIV”), (vi) Learn Capital Special Opportunities Fund XV, L.P. (“LC Fund XV”), and (vii) Learn Capital Special Opportunities Fund XVI, L.P. (“LC Fund XVI” and together with, LC Fund X, LC Fund XI, LC Fund XII, LC Fund XIII and LC Fund XIV and LC Fund XV, the “Learn Capital Funds”). The general partners for LC Fund X, LC Fund XI, LC Fund XII, LC Fund XIII, LC Fund XIV, LC Fund XV, and LC Fund XVI are Learn Capital Management X, LLC (“Management X”), Learn Capital Management XI, LLC (“Management XI”), Learn Capital Management XII, LLC (“Management XII”), Learn Capital Management XIII, LLC (“Management XIII”), Learn Capital Management XIV, LLC (“Management XIV”), Learn Capital Management XV, LLC (“Management XV”), and Learn Capital Management XVI, LLC (“Management XVI”), respectively. Management X, |
Management XI, Management XII, Management XIII, Management XIV, Management XV and Management XVI are collectively referred to as the “Management Entities.” Each of the Management Entities may be deemed to beneficially own the shares held by the Learn Capital Funds. Each of the Management Entities disclaims beneficial ownership of such shares, except to the extent of any pecuniary interest therein. The address for these entities is 600 Congress Avenue, Suite 2800, Austin, Texas, 78701. |
Before the Offering |
After the Offering |
|||||||||||||||||||||||||||||||
Name of Selling Securityholder |
Number of Shares of Class A Common Stock (including underlying shares of Class A Common Stock) |
Number of Warrants |
Number of Shares of Class A Common Stock Being Offered |
Number of Warrants Being Offered |
Number of Shares of Class A Common Stock (including underlying shares of Class A Common Stock) |
Percentage of Shares of Common Stock |
Number of Warrants |
Percentage |
||||||||||||||||||||||||
TPG Pace Tech Opportunities Sponsor Series LLC (2) |
16,612,139 | 4,888,889 | 16,612,139 | 4,888,889 | — | — | — | — | ||||||||||||||||||||||||
Entities affiliated with Millennium Management LLC (3) |
2,916,830 | 490,426 | 2,800,000 | 400,000 | 116,830 | * | 90,426 | * | ||||||||||||||||||||||||
CW Crossover Opportunities I LP (4) |
2,500,000 | — | 2,500,000 | — | — | — | — | — | ||||||||||||||||||||||||
Franklin Templeton Investments (5) |
2,500,000 | — | 2,500,000 | — | — | — | — | — | ||||||||||||||||||||||||
Light Street Capital Management, LLC (6) |
10,593,139 | 1,300,000 | 3,200,000 | 400,000 | 7,393,139 | 4.0 | % | 900,000 | 4.7 | % | ||||||||||||||||||||||
Norges Bank (7) |
1,800,000 | — | 1,800,000 | — | — | — | — | — |
Before the Offering |
After the Offering |
|||||||||||||||||||||||||||||||
Name of Selling Securityholder |
Number of Shares of Class A Common Stock (including underlying shares of Class A Common Stock) |
Number of Warrants |
Number of Shares of Class A Common Stock Being Offered |
Number of Warrants Being Offered |
Number of Shares of Class A Common Stock (including underlying shares of Class A Common Stock) |
Percentage of Shares of Common Stock |
Number of Warrants |
Percentage |
||||||||||||||||||||||||
CVI Investments, Inc. (8) |
1,856,854 | 281,854 | 1,825,000 | 250,000 | 31,584 | * | 31,584 | * | ||||||||||||||||||||||||
Entities affiliated with Phoenix Insurance Company Ltd. (9) |
1,791,000 | — | 1,500,000 | — | 291,000 | * | — | — | ||||||||||||||||||||||||
Entities affiliated with TPG Public Equity Partners (10) |
1,800,000 | 300,000 | 1,800,000 | 300,000 | — | — | — | — | ||||||||||||||||||||||||
TPG Holdings III L.P. (11) |
200,000 | 200,000 | 200,000 | 200,000 | — | — | — | — | ||||||||||||||||||||||||
Charles Cohn (12) |
42,135,365 | 1,195,376 | 42,135,365 | 1,195,376 | — | — | — | — | ||||||||||||||||||||||||
Entities affiliated with TCV (13) |
21,650,425 | 614,444 | 21,650,425 | 614,444 | — | — | — | — | ||||||||||||||||||||||||
Entities affiliated with Learn Capital (14) |
9,611,529 | 272,779 | 9,611,529 | 272,779 | — | — | — | — | ||||||||||||||||||||||||
Davis VT LLC (15) |
5,097,262 | 144,662 | 5,097,262 | 144,662 | — | — | — | — | ||||||||||||||||||||||||
Ian Clarkson (16) |
4,863,638 | 98,161 | 4,863,638 | 98,161 | — | — | — | — | ||||||||||||||||||||||||
Heidi Robinson (17) |
1,442,402 | 26,063 | 1,442,402 | 26,063 | — | — | — | — | ||||||||||||||||||||||||
Chris Swenson (18) |
1,053,312 | 17,303 | 1,053,312 | 17,303 | — | — | — | — | ||||||||||||||||||||||||
Board of Director Profit Interest Unit Holder Group (19) |
699,131 | 11,463 | 699,131 | 11,463 | — | — | — | — | ||||||||||||||||||||||||
Current and Former Company Executive Profit Interest Unit Holder Group 1 (20) |
1,629,290 | 10,635 | 1,629,290 | 10,635 | — | — | — | — | ||||||||||||||||||||||||
Current and Former Company Executive Profit Interest Unit Holder Group 2 (21) |
1,575,526 | 9,598 | 1,575,526 | 9,598 | — | — | — | — | ||||||||||||||||||||||||
Other Nerdy Class B Holder Group (22) |
1,510,103 | 5,677 | 1,510,103 | 5,677 | — | — | — | — | ||||||||||||||||||||||||
Former Company Executive Stock Appreciation Right Holder Group 1 (23) |
573,928 | 38,283 | 573,928 | 38,283 | — | — | — | — | ||||||||||||||||||||||||
PIPE Investor Group 1(24) |
1,600,000 | — | 1,400,000 | — | 200,000 | * | — | — | ||||||||||||||||||||||||
PIPE Investor Group 2 (25) |
1,547,400 | 99,600 | 1,547,400 | 99,600 | — | — | — | — | ||||||||||||||||||||||||
PIPE Investor Group 3 (26) |
1,614,578 | 281,878 | 900,000 | — | 714,578 | * | 281,878 | * | ||||||||||||||||||||||||
PIPE Investor Group 4 (27) |
1,500,000 | 200,000 | 1,300,000 | — | — | — | 200,000 | * | ||||||||||||||||||||||||
PIPE Investor Group 5 (28) |
1,498,659 | 198,659 | 1,300,000 | — | — | — | 198,659 | * | ||||||||||||||||||||||||
FPA Investor Group 1 (29) |
1,647,250 | 253,500 | 1,647,250 | 253,500 | — | — | — | — | ||||||||||||||||||||||||
FPA Investor Group 2 (30) |
1,692,500 | 250,000 | 1,692,500 | 250,000 | — | — | — | — | ||||||||||||||||||||||||
FPA Investor Group 3 (31) |
1,587,000 | 234,500 | 1,587,000 | 234,500 | — | — | — | — | ||||||||||||||||||||||||
FPA Investor Group 4 (32) |
1,481,000 | 228,000 | 1,481,000 | 228,000 | — | — | — | — | ||||||||||||||||||||||||
PIPE and FPA Investor Group 1 (33) |
1,670,000 | 120,000 | 1,670,000 | 120,000 | — | — | — | — | ||||||||||||||||||||||||
PIPE and FPA Investor Group 2 (34) |
1,626,600 | 264,400 | 1,626,600 | 264,400 | — | — | — | — |
* | Less than 1% |
** | “Percentage of Shares of Common Stock” based on a total of 186,332,088 shares of common stock, which number includes 90,266,581 shares of Class A common stock outstanding as of the date of this prospectus, plus 76,732,173 shares of common stock issuable upon the exchange of a corresponding number of Class B common stock (and OpCo Units), and 19,333,333 shares of Class A common stock which may be acquired upon exercise of the Company warrants. |
(1) | Unless otherwise noted, the business address of each of those listed in the table above is 101 S. Hanley Rd., Suite 300, St. Louis, MO 63105. |
(2) | Consists of (i) 11,723,250 shares of Class A common stock held of record and (ii) 4,888,889 shares of common stock which may be acquired upon exercise of warrants. The address of the Selling Securityholder is 301 Commerce St., Suite 3300, Fort Worth, TX 76102. |
(3) | Consists of (i) 2,507,629 shares of Class A common stock beneficially owned by Integrated Core Strategies (US) LLC (“Integrated Core Strategies”), which is comprised of (a) 2,070,000 shares of Class A common stock and 340,000 shares of common stock which may be acquired upon exercise of warrants, (ii) 390,000 shares of Class A common stock beneficially owned by ICS Opportunities, Ltd. (“ICS Opportunities”), which is comprised of (a) 330,000 shares of Class A common stock and 60,000 shares of common stock which may be acquired upon exercise of warrants, (iii) 18,200 shares of Class A common stock beneficially owned by ICS Opportunities II, Ltd. (“ICS Opportunities II”), and (iv) 1,001 shares of Class A common stock beneficially owned by Integrated Assets, Ltd. (“Integrated Assets”). Millennium International Management LP (“Millennium International”) is the investment manager to ICS Opportunities, ICS Opportunities II and Integrated Assets and may be deemed to have shared voting control and investment discretion over securities owned by ICS Opportunities, ICS Opportunities II and Integrated Assets. Millennium Management LLC (“Millennium Management”) is the general partner of the managing member of Integrated Core Strategies and may be deemed to have shared voting control and investment discretion over securities owned by Integrated Core Strategies. Millennium Management is also the general partner of the 100% owner of ICS Opportunities, ICS Opportunities II and Integrated Assets and may also be deemed to have shared voting control and investment discretion over securities owned by ICS Opportunities, ICS Opportunities II and Integrated Assets. Millennium Group Management LLC (“Millennium Group Management”) is the managing member of Millennium Management and may also be deemed to have shared voting control and investment discretion over securities owned by Integrated Core Strategies. Millennium Group Management is also the general partner of Millennium International Management and may also be deemed to have shared voting control and investment discretion over securities owned by ICS Opportunities, ICS Opportunities II and Integrated Assets. The managing member of Millennium Group Management is a trust of which Israel A. Englander (“Mr. Englander”), currently serves as the sole voting trustee. Therefore, Mr. Englander may also be deemed to have shared voting control and investment discretion over securities owned by Integrated Core Strategies, ICS Opportunities, ICS Opportunities II and Integrated Assets. The address of each of the entities and individuals in this footnote is 399 Park Avenue, New York, New York 10022. |
(4) | The address of the Selling Stockholder is 11755 Wilshire Blvd., Suite 2320, Los Angeles, California 90025. |
(5) | Franklin Advisers, Inc. (“FAV”) is the investment manager or sub-advisers for the funds that are the registered holders of these securities. FAV is an indirect wholly owned subsidiary of Franklin Resources, Inc. (“FRI”) and may be deemed to be the beneficial owner of these securities for purposes of Rule 13d-3 under the Exchange Act in its capacity as the investment adviser to various investment companies registered under Section 8 of the Investment Company Act of 1940 and other accounts. When an investment management contract (including a sub-advisory agreement) delegates to FAV investment discretion or voting power over the securities held in the investment advisory accounts that are subject to that agreement, FRI treats FAV as having sole investment discretion or voting authority, as the case may be, unless the agreement specifies otherwise. Accordingly, FAV reports for purposes of section 13(d) of the Exchange Act that it has sole investment discretion and voting authority over the securities covered by any such investment management agreement, unless otherwise specifically noted. The address of FAV is One Franklin Parkway, San Mateo, CA 94403-1906. FAV disclaims beneficial ownership of the securities. |
(6) | Consists of shares of common stock held by Light Street Capital Management, LLC, a Cayman Islands limited liability company (“LSCM”). LSCM serves as the general partner to Light Street Mercury Master Fund, L.P., a Cayman Islands limited liability company (“Mercury”), and, in such capacity, exercises voting and investment power over Class A ordinary shares held by Mercury. Glen Thomas Kacher is the Chief Investment Officer of LSCM and may be deemed to have shared voting control and investment discretion over securities owned by LSCM. The mailing address for LSCM is 525 University Avenue, Suite 300, Palo Alto, CA 94301. |
(7) | The address of the Selling Stockholder is Bankplassen, 0151 Oslo, Norway. |
(8) | Consists of (i) 1,575,000 shares of Class A common stock held of record and (ii) 250,000 shares of common stock which may be acquired upon exercise of warrants. Heights Capital Management, Inc., the authorized agent of CVI Investments, Inc. (“CVI”), has discretionary authority to vote and dispose of the shares held by CVI and may be deemed to be the beneficial owner of these shares. Martin Kobinger, in his capacity as Investment Manager of Heights Capital Management, Inc., may also be deemed to have investment discretion and voting power over the shares held by CVI. Mr. Kobinger disclaims any such beneficial ownership of the shares. The principal business address of CVI is c/o Heights Capital Management, Inc., 101 California Street, Suite 3250, San Francisco, California 94111. |
(9) | Consists of (i) 1,491,000 shares held by Shotfut Menayot Chul-Phoenix Amitim and (ii) 300,000 shares held by Phoenix Insurance Ltd. The address of each of the Selling Securityholders named above is Derech Hashalom 53, Giv’atayim, Israel 5345433. |
(10) | Consists of (i) 1,010,825 shares of Class A common stock beneficially owned by TPG Public Equity Partners Master Fund, L.P., which is comprised of (a) 842,355 shares of Class A common stock and (b) 168,470 shares of common stock that may be acquired upon exercise of warrants, (ii) 699,810 shares of Class A common stock beneficially owned by TPG Public Equity Partners Long Opportunities Master Fund, L.P., which is comprised of (a) 583,175 shares of Class A common stock and (b) 116,635 shares of common stock that may be acquired upon exercise of warrants, and (iii) 89,365 shares of Class A common stock beneficially owned by TPG Public Equity Partners, LP, which is comprised of (a) 74,470 shares of Class A common stock and (b) 14,895 shares of common stock that may be acquired upon exercise of warrants. The address of the Selling Securityholders referenced in this footnote is 301 Commerce St., Suite 3300, Fort Worth, TX 76102. |
(11) | Consists of 200,000 shares of common stock which may be acquired upon exercise of warrants. The address of the Selling Securityholder is 301 Commerce St., Suite 3300, Fort Worth, TX 76102. |
(12) | Represents (i) 40,939,989 shares of Class A common stock issuable upon the exchange of the same number of shares of Class B common stock (and OpCo Units) and (ii) 1,195,376 shares of Class A common stock which may be acquired upon exercise of Class B warrants and the subsequent exchange of the shares of Class B common stock (and OpCo Units). |
(13) | Represents (i) 4,036,066 shares of Class A common stock beneficially owned by TCV VIII (A), L.P. (“TCV VIII (A)”), (ii) 117,890 shares of Class A common stock issuable upon exercise of the Class A warrants, (iii) 16,999,915 shares of Class A common stock issuable upon the exchange of the Class B common stock (and OpCo Units) beneficially owned by TCV VIII VT Master, L.P. (“TCV Master Fund”) and (iv) 496,554 shares of Class A common stock which may be acquired upon exercise of Class B warrants and the subsequent exchange of the shares of Class B common stock (and OpCo Units). The general partner of TCV Master Fund is TCV VIII VT Master GP, LLC (“Master GP”). The managing member of Master GP is TCV VIII, L.P. (“TCV VIII”). The direct general partner of TCV VIII and TCV VIII (A) is Technology Crossover Management VIII, L.P. (“TCM VIII”). The general partner of TCM VIII is Technology Crossover Management VIII, Ltd. (“Management VIII”). Each of TCM VIII and Management VIII may be deemed to beneficially own the shares held by TCV VIII (A). Each of Master GP, TCV VIII, TCM VIII and Management VIII may be deemed to beneficially own the shares held by TCV Master Fund. Each of Master GP, TCV VIII, TCM VIII and Management VIII disclaims beneficial ownership of such shares, except to the extent of any pecuniary interest therein. The address for these entities is 250 Middlefield Road, Menlo Park, CA 94025. |
(14) | Represents (i) 8,093,583 shares of Class A common stock, (ii) 236,407 shares of Class A common stock issuable upon exercise of the Class A warrants, (iii) 1,245,167 shares of Class A common stock issuable upon the exchange of the Class B common stock (and OpCo Units), and (iv) 36,372 shares of Class A common stock which may be acquired upon exercise of Class B warrants and the subsequent exchange of the shares of Class B common stock (and OpCo Units). The sole owner of TCV VIII (A) VT, Inc. is TCV VIII (A), L.P. Consists of shares of common stock held by (i) Learn Capital Special Opportunities Fund X, L.P. (“LC Fund X”), (ii) Learn Capital Special Opportunities Fund XI, L.P. (“LC Fund XI”), (iii) Learn Capital Special Opportunities Fund XII, L.P. (“LC Fund XII”), (iv) Learn Capital Special Opportunities Fund XIII, L.P. (“LC Fund XIII”), (v) Learn Capital Special Opportunities Fund XIV, L.P. (“LC Fund XIV”), (vi) Learn Capital Special Opportunities Fund XV, L.P. (“LC Fund XV”) and (vii) Learn Capital Special Opportunities Fund XVI, L.P. (“LC Fund XVI” and together with, LC Fund X, LC Fund XI, LC Fund XII, LC Fund XIII and LC Fund XIV and LC Fund XV, the “Learn Capital Funds”). The general partners for LC Fund X, LC Fund XI, LC Fund XII, LC Fund XIII, LC Fund XIV, LC Fund XV and LC Fund XVI are Learn Capital Management X, LLC (“Management X”), Learn Capital Management XI, LLC (“Management XI”), Learn Capital Management XII, LLC (“Management XII”), Learn Capital Management XIII, LLC (“Management XIII”), Learn Capital Management XIV, LLC (“Management XIV”), Learn Capital Management XV, LLC (“Management XV”) and Learn Capital Management XVI, LLC (“Management XVI”), respectively. Management X, Management XI, Management XII, Management XIII, Management XIV, Management XV and Management XVI are collectively referred to as the “Management Entities.” Each of the Management Entities may be deemed to beneficially own the shares held by the Learn Capital Funds. Each of the Management Entities disclaims beneficial ownership of such shares, except to the extent of any pecuniary interest therein. The address for these entities is 600 Congress Avenue, Suite 2800, Austin, Texas, 78701. |
(15) | Consists of (i) 4,952,600 shares of Class A common stock and (ii) 144,662 shares of Class A common stock issuable upon exercise of the Class A warrants. The address for VT Davis LLC is 10 Brentmoor Park, Clayton MO 63105. |
(16) | Represents (i) 4,765,477 shares of Class A common stock issuable upon the exchange of the Class B common stock (and OpCo Units) and (ii) 98,161 shares of Class A common stock which may be acquired upon exercise of Class B warrants and the subsequent exchange of the shares of Class B common stock (and OpCo Units). Mr. Clarkson is an executive officer of Nerdy Inc. |
(17) | Represents (i) 1,416,339 shares of Class A common stock issuable upon the exchange of the Class B common stock (and OpCo Units) and (ii) 26,063 shares of Class A common stock which may be acquired upon exercise of Class B warrants and the subsequent exchange of the shares of Class B common stock (and OpCo Units). Ms. Robinson is an executive officer of Nerdy Inc. |
(18) | Represents (i) 1,036,009 shares of Class A common stock issuable upon the exchange of the Class B common stock (and OpCo Units) and (ii) 17,303 shares of Class A common stock which may be acquired upon exercise of Class B warrants and the subsequent exchange of the shares of Class B common stock (and OpCo Units). Mr. Swenson is an executive officer of Nerdy Inc. |
(19) | Represents (i) 687,668 shares of Class A common stock issuable upon the exchange of the same number of shares of Class B common stock (and OpCo Units) and (ii) 11,643 shares of Class A common stock which may be acquired upon exercise of Class B warrants and the subsequent exchange of the shares of Class B common stock (and OpCo Units). |
(20) | Represents (i) 1,618,655 shares of Class A common stock issuable upon the exchange of the same number of shares of Class B common stock (and OpCo Units) and (ii) 10,635 shares of Class A common stock which may be acquired upon exercise of Class B warrants and the subsequent exchange of the shares of Class B common stock (and OpCo Units). |
(21) | Represents (i) 1,565,928 shares of Class A common stock issuable upon the exchange of the same number of shares of Class B common stock (and OpCo Units) and (ii) 9,598 shares of Class A common stock which may be acquired upon exercise of Class B warrants and the subsequent exchange of the shares of Class B common stock (and OpCo Units). |
(22) | Represents (i) 1,504,426 shares of Class A common stock issuable upon the exchange of the same number of shares of Class B common stock (and OpCo Units) and (ii) 5,677 shares of Class A common stock which may be acquired upon exercise of Class B warrants and the subsequent exchange of the shares of Class B common stock (and OpCo Units). |
(23) | Consists of (i) 535,645 shares of Class A common stock which may be acquired upon the exercise of Stock Appreciation Rights and 38,283 shares of common stock which may be acquired upon exercise of warrants held by former employees of Nerdy LLC or one of its affiliates. |
(24) | Consists of 1,600,000 shares of Class A common stock held of record. |
(25) | Consists of (i) 1,447,800 shares of Class A common stock held of record and (ii) 99,600 shares of common stock which may be acquired upon exercise of warrants. |
(26) | Consists of (i) 1,332,700 shares of Class A common stock held of record and (ii) 281,878 shares of common stock which may be acquired upon exercise of warrants. |
(27) | Consists of (i) 1,300,000 shares of Class A common stock held of record and (ii) 200,000 shares of common stock which may be acquired upon exercise of warrants. |
(28) | Consists of (i) 1,300,000 shares of Class A common stock held of record and (ii) 198,659 shares of common stock which may be acquired upon exercise of warrants. |
(29) | Consists of (i) 1,393,750 shares of Class A common stock held of record and (ii) 253,500 shares of common stock which may be acquired upon exercise of warrants. |
(30) | Consists of (i) 1,442,500 shares of Class A common stock held of record and (ii) 250,000 shares of common stock which may be acquired upon exercise of warrants. |
(31) | Consists of (i) 1,352,500 shares of Class A common stock held of record and (ii) 234,500 shares of common stock which may be acquired upon exercise of warrants. |
(32) | Consists of (i) 1,253,000 shares of Class A common stock held of record and (ii) 228,000 shares of common stock which may be acquired upon exercise of warrants. |
(33) | Consists of (i) 1,550,000 shares of Class A common stock held of record and (ii) 120,000 shares of common stock which may be acquired upon exercise of warrants. |
(34) | Consists of (i) 1,362,200 shares of Class A common stock held of record and (ii) 264,400 shares of common stock which may be acquired upon exercise of warrants. |
• | we have been or are to be a participant; |
• | the amount involved exceeded or exceeds $120,000; and |
• | any of our directors, executive officers or holders of more than 5% of our outstanding Common Units, or any immediate family member of, or person sharing the household with, any of these individuals or entities, had or will have a direct or indirect material interest. |
• | any breach of the director’s duty of loyalty to us or our stockholders; |
• | any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; |
• | unlawful payments of dividends or unlawful stock repurchases, or redemptions as provided in Section 174 of the DGCL; or |
• | any transaction from which the director derived an improper personal benefit. |
• | in whole and not in part; |
• | at a price of $0.01 per redeemable warrant; |
• | upon a minimum of 30 days’ prior written notice of redemption to each redeemable warrant holder, provided that holders will be able to exercise their redeemable warrants prior to the time of redemption and, at our election, any such exercise may be required to be on a cashless basis as described below; and |
• | if, and only if, the last reported sale price of the Class A Common Stock equals or exceeds $18.00 per share (subject to adjustment as described under the heading “-Redeemable Warrants-Redemption of Redeemable Warrants When the Price per share of Class A Common Stock Equals or Exceeds $10.00-Anti-dilution Adjustments”) for any 20 trading days within a 30-trading-day |
• | in whole and not in part; |
• | at a price of $0.10 per redeemable warrant; |
• | upon a minimum of 30 days’ prior written notice of redemption; provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the table below, based on the redemption date and the “fair market value” of our Class A Common Stock (as defined below) except as otherwise described below; |
• | if, and only if, the last reported sale price of our Class A Common Stock equals or exceeds $10.00 per public share (subject to adjustment as described under the heading “-Anti-dilution Adjustments” below) on the trading day prior to the date on which we send the notice of redemption to the redeemable warrant holders; and |
• | if the last reported sale price of our Class A Common Stock is less than $18.00 per share (subject to adjustment as described under the heading “Description of Securities-Redeemable Warrants-Anti-Dilution Adjustments”) on the trading day prior to the date on which we send the notice of redemption to the warrant holders, the private placement warrants must also be concurrently called for redemption on the same terms as the outstanding redeemable warrants, as described above. |
Redemption Date (period to expiration of redeemable warrants) |
Fair Market Value of Class A Common Stock |
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<$ | 10.00 | $ | 11.00 | $ | 12.00 | $ | 13.00 | $ | 14.00 | $ | 15.00 | $ | 16.00 | $ | 17.00 | >$ | 18.00 | |||||||||||||||||||
60 months |
0.261 | 0.281 | 0.297 | 0.311 | 0.324 | 0.337 | 0.348 | 0.358 | 0.361 | |||||||||||||||||||||||||||
57 months |
0.257 | 0.277 | 0.294 | 0.310 | 0.324 | 0.337 | 0.348 | 0.358 | 0.361 | |||||||||||||||||||||||||||
54 months |
0.252 | 0.272 | 0.291 | 0.307 | 0.322 | 0.335 | 0.347 | 0.357 | 0.361 | |||||||||||||||||||||||||||
51 months |
0.246 | 0.268 | 0.287 | 0.304 | 0.320 | 0.333 | 0.346 | 0.357 | 0.361 | |||||||||||||||||||||||||||
48 months |
0.241 | 0.263 | 0.283 | 0.301 | 0.317 | 0.332 | 0.344 | 0.356 | 0.361 | |||||||||||||||||||||||||||
45 months |
0.235 | 0.258 | 0.279 | 0.298 | 0.315 | 0.330 | 0.343 | 0.356 | 0.361 | |||||||||||||||||||||||||||
42 months |
0.228 | 0.252 | 0.274 | 0.294 | 0.312 | 0.328 | 0.342 | 0.355 | 0.361 | |||||||||||||||||||||||||||
39 months |
0.221 | 0.246 | 0.269 | 0.290 | 0.309 | 0.325 | 0.340 | 0.354 | 0.361 | |||||||||||||||||||||||||||
36 months |
0.213 | 0.239 | 0.263 | 0.285 | 0.305 | 0.323 | 0.339 | 0.353 | 0.361 | |||||||||||||||||||||||||||
33 months |
0.205 | 0.232 | 0.257 | 0.280 | 0.301 | 0.320 | 0.337 | 0.352 | 0.361 | |||||||||||||||||||||||||||
30 months |
0.196 | 0.224 | 0.250 | 0.274 | 0.297 | 0.316 | 0.335 | 0.351 | 0.361 | |||||||||||||||||||||||||||
27 months |
0.185 | 0.214 | 0.242 | 0.268 | 0.291 | 0.313 | 0.332 | 0.350 | 0.361 | |||||||||||||||||||||||||||
24 months |
0.173 | 0.204 | 0.233 | 0.260 | 0.285 | 0.308 | 0.329 | 0.348 | 0.361 | |||||||||||||||||||||||||||
21 months |
0.161 | 0.193 | 0.223 | 0.252 | 0.279 | 0.304 | 0.326 | 0.347 | 0.361 | |||||||||||||||||||||||||||
18 months |
0.146 | 0.179 | 0.211 | 0.242 | 0.271 | 0.298 | 0.322 | 0.345 | 0.361 | |||||||||||||||||||||||||||
15 months |
0.130 | 0.164 | 0.197 | 0.230 | 0.262 | 0.291 | 0.317 | 0.342 | 0.361 | |||||||||||||||||||||||||||
12 months |
0.111 | 0.146 | 0.181 | 0.216 | 0.250 | 0.282 | 0.312 | 0.339 | 0.361 | |||||||||||||||||||||||||||
9 months |
0.090 | 0.125 | 0.162 | 0.199 | 0.237 | 0.272 | 0.305 | 0.336 | 0.361 | |||||||||||||||||||||||||||
6 months |
0.065 | 0.099 | 0.137 | 0.178 | 0.219 | 0.259 | 0.296 | 0.331 | 0.361 | |||||||||||||||||||||||||||
3 months |
0.034 | 0.065 | 0.104 | 0.150 | 0.197 | 0.243 | 0.286 | 0.326 | 0.361 | |||||||||||||||||||||||||||
0 months |
— | — | 0.042 | 0.115 | 0.179 | 0.233 | 0.281 | 0.323 | 0.361 |
• | 1% of the total number of Class A Common Stock then outstanding; or |
• | the average weekly reported trading volume of New Nerdy 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 twelve 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. |
• | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
• | one or more underwritten offerings; |
• | block trades in which the broker-dealer will attempt to sell the shares of common stock or warrants as agent, but may position and resell a portion of the block as principal to facilitate the transaction; |
• | purchases by a broker-dealer as principal and resale by the broker-dealer for its accounts; |
• | an exchange distribution in accordance with the rules of the applicable exchange; |
• | privately negotiated transactions; |
• | distributions to their members, partners or shareholders; |
• | short sales effected after the date of the registration statement of which this prospectus is a part is declared effective by the SEC; |
• | through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; |
• | in market transactions, including transactions on a national securities exchange or quotations service or over-the-counter |
• | directly to one or more purchasers; |
• | through agents; |
• | broker-dealers may agree with the Selling Securityholders to sell a specified number of such shares of common stock or warrants at a stipulated price per share or warrant; and |
• | a combination of any such methods of sale. |
Unaudited Financial Statements of Nerdy Inc. |
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F-6 | ||||
F-7 | ||||
Audited Financial Statements of Nerdy Inc. |
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F-21 |
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F-22 |
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F-23 |
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F-24 |
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F-25 |
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F-26 |
||||
F-28 |
Three Months Ended March 31, |
||||||||
2022 |
2021 |
|||||||
Revenue |
$ | $ | ||||||
Cost of revenue |
||||||||
|
|
|
|
|||||
Gross Profit |
||||||||
Sales and marketing expenses |
||||||||
General and administrative expenses |
||||||||
|
|
|
|
|||||
Operating Loss |
( |
) | ( |
) | ||||
Unrealized loss on derivatives |
||||||||
Interest (income) expense, net |
( |
) | ||||||
Other expense, net |
||||||||
|
|
|
|
|||||
Loss before Income Taxes |
( |
) | ( |
) | ||||
Income tax expense |
||||||||
|
|
|
|
|||||
Net Loss |
( |
) | ( |
) | ||||
Net loss attributable to legacy Nerdy holders prior to the reverse recapitalization |
( |
) | ||||||
Net loss attributable to noncontrolling interests |
( |
) | — | |||||
|
|
|
|
|||||
Net Loss Attributable to Class A Common Stockholders |
$ | ( |
) | $ | ||||
|
|
|
|
|||||
Loss per share of Class A Common Stock: |
||||||||
Basic and Diluted |
$ | ( |
) | $ | ||||
Weighted-Average Shares of Class A Common Stock Outstanding: |
||||||||
Basic and Diluted |
Three Months Ended March 31, |
||||||||
2022 |
2021 |
|||||||
Net Loss |
$ | ( |
) | $ | ( |
) | ||
Unrealized foreign currency translation adjustments |
( |
) | ||||||
|
|
|
|
|||||
Total Comprehensive Loss |
( |
) | ( |
) | ||||
Comprehensive loss attributable to legacy Nerdy holders prior to the reverse recapitalization |
( |
) | ||||||
Comprehensive loss attributable to noncontrolling interests |
( |
) | ||||||
|
|
|
|
|||||
Total Comprehensive Loss Attributable to Class A Common Stockholders |
$ | ( |
) | $ | ||||
|
|
|
|
March 31, 2022 |
December 31, 2021 |
|||||||
ASSETS |
| |||||||
Current Assets |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Accounts receivable, net |
||||||||
Other current assets |
||||||||
|
|
|
|
|||||
Total Current Assets |
||||||||
Fixed assets, net |
||||||||
Goodwill |
||||||||
Intangible assets, net |
||||||||
Other assets |
||||||||
|
|
|
|
|||||
Total Assets |
$ | $ | ||||||
|
|
|
|
|||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
| |||||||
Current Liabilities |
||||||||
Accounts payable |
$ | $ | ||||||
Deferred revenue |
||||||||
Due to legacy Nerdy holders |
||||||||
Other current liabilities |
||||||||
|
|
|
|
|||||
Total Current Liabilities |
||||||||
Other liabilities |
||||||||
|
|
|
|
|||||
Total Liabilities |
||||||||
Stockholders’ Equity |
||||||||
Class A common stock |
||||||||
Class B common stock |
||||||||
Additional paid-in capital |
||||||||
Accumulated deficit |
( |
) | ( |
) | ||||
Accumulated other comprehensive income |
||||||||
|
|
|
|
|||||
Total Stockholders’ Equity Excluding Noncontrolling Interests |
||||||||
Noncontrolling interests |
||||||||
|
|
|
|
|||||
Total Stockholders’ Equity |
||||||||
|
|
|
|
|||||
Total Liabilities and Stockholders’ Equity |
$ | $ | ||||||
|
|
|
|
Three Months Ended March 31, |
||||||||
2022 |
2021 |
|||||||
Cash Flows From Operating Activities |
||||||||
Net Loss |
$ | ( |
) | $ | ( |
) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Depreciation & amortization |
||||||||
Amortization of intangibles |
||||||||
Unrealized loss on derivatives |
||||||||
Stock-based compensation |
||||||||
Amortization of deferred debt charges |
||||||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
( |
) | ||||||
Other current assets |
( |
) | ||||||
Other assets |
( |
) | ||||||
Accounts payable |
( |
) | ||||||
Other current liabilities |
||||||||
Other liabilities |
( |
) | ( |
) | ||||
Deferred revenue |
||||||||
|
|
|
|
|||||
Net Cash Used In Operating Activities |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Cash Flows From Investing Activities |
||||||||
Capital expenditures |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net Cash Used In Investing Activities |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Cash Flows From Financing Activities |
||||||||
Payments to legacy investors |
( |
) | ||||||
Payments of reverse recapitalization costs |
( |
) | ||||||
Other |
( |
) | ||||||
|
|
|
|
|||||
Net Cash Used In Financing Activities |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Effect of Exchange Rate Change on Cash, Cash Equivalents, and Restricted cash |
( |
) | ||||||
|
|
|
|
|||||
Net Decrease in Cash, Cash Equivalents, and Restricted Cash |
( |
) | ( |
) | ||||
Cash, Cash equivalents, and Restricted Cash, Beginning of Year |
||||||||
|
|
|
|
|||||
Cash, Cash Equivalents, and Restricted Cash, End of Period |
$ | $ | ||||||
|
|
|
|
|||||
Supplemental Cash Flow Information |
||||||||
Stock-based compensation included in capitalized internal use software |
$ | $ | ||||||
Purchase of fixed assets included in accounts payable |
Stockholders’ Equity (Deficit) |
||||||||||||||||||||||||||||||||||||
Class A Common Stock |
Class B Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Accumulated Other Comprehensive Income |
Noncontrolling Interests |
Total |
||||||||||||||||||||||||||||||
Shares |
Value |
Shares |
Value |
|||||||||||||||||||||||||||||||||
December 31, 2021 |
$ | $ | $ | $ | ( |
) | $ | $ | $ | |||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | ( |
) | — | ( |
) | ( |
) | ||||||||||||||||||||||||
Stock-based compensation |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||
Foreign currency translation |
— | — | — | — | — | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
Activity under stock compensation plans |
— | — | ( |
) | — | — | — | ( |
) | |||||||||||||||||||||||||||
Rebalancing of ownership percentage controlling and noncontrolling interests |
— | — | — | — | ( |
) | — | — | — | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
March 31, 2022 |
$ | $ | $ | $ | ( |
) | $ | $ | $ | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity (Deficit) |
||||||||||||||||||||||||||||||||||||||||
Class A Preferred Units |
Class A-1 Preferred Units |
Common Units |
Additional Paid-in Capital |
Accumulated Deficit |
Accumulated Other Comprehensive Income |
Total |
||||||||||||||||||||||||||||||||||
Units |
Value |
Units |
Value |
Units |
Value |
|||||||||||||||||||||||||||||||||||
December 31, 2020 |
$ | $ | $ | $ | $ | ( |
) | $ | $ | ( |
) | |||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||||||
Stock-based compensation |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Foreign currency translation |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
March 31, 2021 |
$ | $ | $ | $ | $ | ( |
) | $ | $ | ( |
) | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OpCo Units |
Ownership Percentage |
|||||||||||||||||||||||
Nerdy Inc. |
Legacy Nerdy Holders |
Total |
Nerdy Inc. |
Legacy Nerdy Holders |
Total |
|||||||||||||||||||
Beginning of period |
% | % | % | |||||||||||||||||||||
Vesting of Equity Awards |
n/a | n/a | n/a | |||||||||||||||||||||
End of period |
% | % | % | |||||||||||||||||||||
Three Months Ended March 31, |
||||||||||||||||
2022 |
% |
2021 |
% |
|||||||||||||
One-on-one |
$ | % | $ | % | ||||||||||||
Class and group |
% | % | ||||||||||||||
Other (a) |
% | % | ||||||||||||||
Revenue |
$ | % | $ | % | ||||||||||||
(b) | Other consists of the legacy Veritas LLC business and EduNation Limited, a company incorporated in England and Wales (“First Tutors UK”) (collectively, the “Legacy Businesses”) and other services. |
March 31, 2022 |
December 31, 2021 |
|||||||
Accounts receivable, net |
$ | $ | ||||||
Deferred revenue |
$ | $ |
Net loss attributable to Class A Common Stockholders for basic and diluted loss per share |
$ | ( |
) | |
Weighted-average shares of Class A Common Stock for basic and diluted loss per share |
||||
Basic and Diluted loss per share of Class A Common Stock |
$ | ( |
) | |
Stock options |
||||
Stock appreciation rights |
||||
Restricted stock awards |
||||
Restricted stock units |
||||
Restricted stock units - founder’s award |
||||
Warrants |
||||
Earnouts |
||||
Combined Interests that can be converted into shares of Class A Common Stock |
March 31, 2022 |
December 31, 2021 |
March 31, 2021 |
December 31, 2020 |
|||||||||||||
Cash and cash equivalents |
$ | $ | $ | $ | ||||||||||||
Restricted cash included in Other current assets |
||||||||||||||||
Restricted cash included in Other assets |
||||||||||||||||
Total Cash, Cash Equivalents, and Restricted Cash shown in the Condensed Consolidated Statements of Cash Flows |
$ | $ | $ | $ | ||||||||||||
March 31, 2022 |
December 31, 2021 |
|||||||
Fixed assets |
$ | $ | ||||||
Accumulated depreciation |
( |
) | ( |
) | ||||
$ | $ | |||||||
Three Months Ended March 31, | ||||||||||
Statement of Operations Location |
2022 |
2021 |
||||||||
Amortization expense related to capitalized internal use software |
Cost of revenue | $ | $ | |||||||
Depreciation expense |
General and administrative expenses |
March 31, 2022 |
December 31, 2021 |
|||||||||||||||||||||||
Carrying Amount |
Accum. Amort. |
Net Amount |
Carrying Amount |
Accum. Amort. |
Net Amount |
|||||||||||||||||||
Trade names |
$ | $ | ( |
) | $ | $ | $ | ( |
) | $ | ||||||||||||||
Foreign currency translation adjustment |
$ | |||||||||||||||||||||||
$ | $ | ( |
) | $ | $ | $ | ( |
) | $ | |||||||||||||||
Three Months Ended March 31, |
||||||||||
Statement of Operations Location |
2022 |
2021 |
||||||||
Amortization expense related to intangible assets |
General and administrative expenses | $ | $ |
Balance Sheet Location |
March 31, 2022 |
December 31, 2021 |
||||||||||
Non-employee Warrants |
Other liabilities | $ | $ | |||||||||
Non-employee Earnouts |
Other liabilities | |||||||||||
$ | $ | |||||||||||
Statement of Operations Location |
||||||||
Non-employee Warrants |
Unrealized loss on derivatives | $ | ||||||
Non-employee Earnouts |
Unrealized loss on derivatives | |||||||
$ | ||||||||
March 31, 2022 |
December 31, 2021 |
|||||||||||||||||||||||||||||||
Total |
Level 1 |
Level 2 |
Level 3 |
Total |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||||||||||||||
Non-employee Warrants |
$ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Non-employee Earnouts |
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2021 |
$ | |||
Mark-to-market non-employee Earnouts |
||||
|
|
|||
Balance, March 31, 2022 |
$ | |||
|
|
March 31, 2022 |
December 31, 2021 |
|||||||
Expected term (in years) |
||||||||
Stock price |
$ | $ | ||||||
Expected stock price volatility |
% | % | ||||||
Risk-free interest rate |
% | % | ||||||
Expected Dividends |
% | % | ||||||
Fair Value (per earnout) |
$ | $ |
• | Reassessment elections — The Company elected the package of practical expedients, and did not reassess whether any existing contracts are or contain a lease, provided a lease analysis was conducted under ASC Topic 840. To the extent leases were identified under ASC Topic 840, the Company did not reassess the classification of those leases. Additionally, to the extent initial direct costs were capitalized under ASC Topic 840 and are not amortized as a result of the implementation of ASC Topic 842, they were not reassessed. |
• | Short-term lease election — ASC Topic 842 allows lessees an option to not recognize ROU assets and lease liabilities arising from short-term leases. A short-term lease is defined as a lease with an initial term of 12 months or less. The Company elected to not recognize short-term leases as ROU assets and lease liabilities on the balance sheet. All short-term leases which are not included on the Company’s balance sheet will be recognized within lease expense. Leases that have an initial term of 12 months or less with an option for renewal will need to be assessed in order to determine if the lease qualifies for the short-term lease exception. If the option is reasonably certain to be exercised, the lease does not qualify as a short-term lease. |
• | Lease vs non-lease components — The Company elected to combine future lease and non-lease components as a single component and the total consideration for the arrangements will be accounted for as a lease. |
March 31, 2022 |
||||
ROU assets |
||||
Other assets |
$ | |||
Lease liabilities: |
||||
Other current liabilities |
$ | |||
Other liabilities |
||||
Total lease liabilities |
$ | |||
March 31, 2022 |
||||
Remaining 2022 |
$ | |||
2023 |
||||
2024 |
||||
2025 |
||||
2026 |
||||
Thereafter |
||||
Total future minimum payments |
$ | |||
Less: Implied interest |
||||
Total lease liabilities |
$ | |||
2022 |
$ | |||
2023 |
||||
2024 |
||||
2025 |
||||
2026 |
||||
Thereafter |
||||
Total |
$ | |||
Three Months Ended March 31, |
||||||||||
Statement of Operations Location |
2022 |
2021 (a) |
||||||||
Operating lease expense |
General and administrative expenses | $ | $ | |||||||
Variable lease expense |
General and administrative expenses | |||||||||
Sublease income |
General and administrative expenses | ( |
) | ( |
) |
(a) | Rent expense and sublease income as reported under ASC Topic 840. |
As Of and For The Three Months Ended March 31, 2021 |
||||
Class B Units, value |
||||
Beginning of period and end of period |
$ | |||
Class C Units, value |
||||
Beginning of period and end of period |
$ | |||
Class B Units, units |
||||
Beginning of period and end of period |
||||
Class C Units, units |
||||
Beginning of period and end of period |
Year ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Revenue |
$ | $ | $ | |||||||||
Cost of revenue |
||||||||||||
Gross Profit |
||||||||||||
Sales and marketing expenses |
||||||||||||
General and administrative expenses |
||||||||||||
Write-off of other intangible assets |
||||||||||||
Operating Loss |
( |
) | ( |
) | ( |
) | ||||||
Unrealized gain on derivatives |
( |
) | ||||||||||
Interest expense |
||||||||||||
Other expense (income), net |
( |
) | ||||||||||
Gain on extinguishment of debt, net |
( |
) | ||||||||||
Loss before Income Taxes |
( |
) | ( |
) | ( |
) | ||||||
Income tax expense |
||||||||||||
Net Loss |
( |
) | ( |
) | ( |
) | ||||||
Net loss attributable to legacy Nerdy holders prior to the reverse recapitalization |
( |
) | ( |
) | ( |
) | ||||||
Net loss attributable to noncontrolling interests |
( |
) | ||||||||||
Net Loss Attributable to Class A Common Stockholders |
$ | ( |
) | $ | $ | |||||||
Loss per share of Class A Common Stock: |
||||||||||||
Basic and Diluted |
$ | ( |
) | $ | $ | |||||||
Weighted-Average Shares of Class A Common Stock Outstanding: |
||||||||||||
Basic and Diluted |
Year ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Net Loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Unrealized foreign currency translation adjustments |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Total Comprehensive Loss |
( |
) | ( |
) | ( |
) | ||||||
Comprehensive loss attributable to legacy Nerdy holders prior to the reverse recapitalization |
( |
) | ( |
) | ( |
) | ||||||
Comprehensive loss attributable to noncontrolling interests |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Total Comprehensive Loss Attributable to Class A Common Stockholders |
$ | ( |
) | $ | $ | |||||||
|
|
|
|
|
|
December 31, |
||||||||
2021 |
2020 |
|||||||
ASSETS |
||||||||
Current Assets |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Accounts receivable, net |
||||||||
Other current assets |
||||||||
|
|
|
|
|||||
Total Current Assets |
||||||||
Fixed assets, net |
||||||||
Goodwill |
||||||||
Intangible assets, net |
||||||||
Other assets |
||||||||
|
|
|
|
|||||
Total Assets |
$ | $ | ||||||
|
|
|
|
|
|
|
|
|
LIABILITIES, REDEEMABLE PREFERRED UNITS AND STOCKHOLDERS’ EQUITY (DEFICIT) |
| |||||||
Current Liabilities |
||||||||
Accounts payable |
$ | $ | ||||||
Deferred revenue |
||||||||
Due to legacy Nerdy holders |
||||||||
Current portion of long-term debt |
||||||||
Other current liabilities |
||||||||
|
|
|
|
|||||
Total Current Liabilities |
||||||||
Other liabilities |
||||||||
Long-term debt |
||||||||
|
|
|
|
|||||
Total Liabilities |
||||||||
Commitments and Contingencies (See Note 17) |
||||||||
Redeemable Preferred Units |
||||||||
Class B Redeemable Preferred Units, no par value— |
— | |||||||
Class C Redeemable Preferred Units, no par value— |
— | |||||||
|
|
|
|
|||||
Total redeemable preferred units |
— | |||||||
Stockholders’ Equity (Deficit) |
||||||||
Class A Preferred Units, no par value— |
— | |||||||
Class A-1 Preferred Units, no par value— |
— | |||||||
Common units, $ |
— | |||||||
Class A common stock, par value $ |
— | |||||||
Class B common stock, par value $ |
— | |||||||
Additional paid-in capital |
||||||||
Accumulated deficit |
( |
) | ( |
) | ||||
Accumulated other comprehensive income |
||||||||
|
|
|
|
|||||
Total Stockholders’ Equity (Deficit) Excluding Noncontrolling Interests |
( |
) | ||||||
Noncontrolling interests |
||||||||
|
|
|
|
|||||
Total Stockholders’ Equity (Deficit) |
( |
) | ||||||
|
|
|
|
|||||
Total Liabilities, Redeemable Preferred Units and Stockholders’ Equity (Deficit) |
$ | $ | ||||||
|
|
|
|
Year ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Cash Flows From Operating Activities |
||||||||||||
Net Loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Adjustments to reconcile net loss to net cash used in operating activities |
||||||||||||
Depreciation & amortization |
||||||||||||
Amortization of intangibles |
||||||||||||
Unrealized gain on derivatives |
( |
) | ||||||||||
Gain on extinguishment of debt, net |
( |
) | ||||||||||
Stock-based compensation |
||||||||||||
Write-off of other intangible assets |
||||||||||||
Amortization of deferred debt charges |
||||||||||||
Loss (gain) on asset dispositions |
( |
) | ||||||||||
Reverse recapitalization costs allocated to warrants and earnouts |
||||||||||||
Changes in operating assets and liabilities, net of reverse recapitalization |
||||||||||||
Accounts receivable |
( |
) | ( |
) | ||||||||
Other current assets |
( |
) | ( |
) | ||||||||
Other assets |
||||||||||||
Accounts payable |
( |
) | ||||||||||
Other current liabilities |
( |
) | ||||||||||
Other liabilities |
( |
) | ||||||||||
Deferred revenue |
||||||||||||
|
|
|
|
|
|
|||||||
Net Cash Used In Operating Activities |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Cash Flows From Investing Activities |
||||||||||||
Capital expenditures |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Net Cash Used In Investing Activities |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Cash Flows From Financing Activities |
||||||||||||
Proceeds from reverse recapitalization, net |
||||||||||||
Payments to legacy investors |
( |
) | ||||||||||
Payments of reverse recapitalization costs |
( |
) | ||||||||||
Proceeds from loan and security agreement |
||||||||||||
Proceeds from promissory note |
||||||||||||
Repayment of loan and security agreement |
( |
) | ||||||||||
Repayment of revolving debt facility |
( |
) | ||||||||||
Payments of debt issuance costs |
( |
) | ||||||||||
Payment of debt extinguishment costs |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Net Cash Provided By Financing Activities |
||||||||||||
|
|
|
|
|
|
|||||||
Effect of Exchange Rate Change on Cash, cash equivalents, and restricted cash |
||||||||||||
|
|
|
|
|
|
|||||||
Net increase in Cash, Cash Equivalents, and Restricted cash |
||||||||||||
Cash, cash equivalents, and restricted cash at beginning of period |
||||||||||||
|
|
|
|
|
|
|||||||
Cash, Cash Equivalents, and Restricted cash at end of period |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|||||||
Supplemental Cash Flow Information |
||||||||||||
Purchase of fixed assets included in accounts payable |
$ | $ | $ | |||||||||
Cash paid for interest |
Stockholders’ Equity (Deficit) |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class A Preferred Units |
Class A-1 Preferred Units |
Common Units |
Class A Common Stock |
Class B Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Accumulated Other Comprehensive Income |
Noncontrolling Interests |
Total |
|||||||||||||||||||||||||||||||||||||||||||||||||||
Units |
Value |
Units |
Value |
Units |
Value |
Shares |
Value |
Shares |
Value |
|||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2018 |
$ | $ | $ | — | $ | — | — | $ | — | $ | $ | ( |
) | $ | $ | $ | ( |
) | ||||||||||||||||||||||||||||||||||||||||||
Adoption of accounting standards updates |
— | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Net loss attributable to legacy Nerdy holders prior to the reverse recapitalization |
— | — | — | — | — | — | — | — | — | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation attributable to legacy Nerdy holders prior to the reverse recapitalization |
— | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation attributable to legacy Nerdy holders prior to the reverse recapitalization |
— | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Balance, December 31, 2019 |
$ | $ | $ | — | $ | — | — | $ | — | $ | $ | ( |
) | $ | $ | $ | ( |
) | ||||||||||||||||||||||||||||||||||||||||||
Net loss attributable to legacy Nerdy holders prior to the reverse recapitalization |
— | — | — | — | — | — | — | — | — | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation attributable to legacy Nerdy holders prior to the reverse recapitalization |
— | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation attributable to legacy Nerdy holders prior to the reverse recapitalization |
— | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Redeemable preferred unit accretion |
— | — | — | — | — | — | — | — | — | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||||||||||||||||||||||||||
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|
|
|
Stockholders’ Equity (Deficit) |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class A Preferred Units |
Class A-1 Preferred Units |
Common Units |
Class A Common Stock |
Class B Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Accumulated Other Comprehensive Income |
Noncontrolling Interests |
Total |
|||||||||||||||||||||||||||||||||||||||||||||||||||
Units |
Value |
Units |
Value |
Units |
Value |
Shares |
Value |
Shares |
Value |
|||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2020 |
$ | $ | $ | — | $ | — | — | $ | — | $ | $ | ( |
) | $ | $ | $ | ( |
) | ||||||||||||||||||||||||||||||||||||||||||
Net loss attributable to legacy Nerdy Holders prior to the reverse recapitalization |
— | — | — | — | — | — | — | — | — | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation attributable to legacy Nerdy holders prior to the reverse recapitalization |
— | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation attributable to legacy Nerdy holders prior to the reverse recapitalization |
— | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Reverse recapitalization, net |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | — | ( |
) | |||||||||||||||||||||||||||||||||||||||||||||
Net loss after the reverse recapitalization |
— | — | — | — | — | — | — | — | — | — | — | ( |
) | — | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation after the reverse recapitalization |
— | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation after the reverse recapitalization |
— | — | — | — | — | — | — | — | — | — | — | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||||||||||
Activity under stock compensation plans |
— | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Rebalancing of controlling and noncontrolling interests |
— | — | — | — | — | — | — | — | — | — | ( |
) | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
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|
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|
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|
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|
|
|
|
|
|||||||||||||||||||||||||||||||
Balance, December 31, 2021 |
— | $ | — | — | $ | — | — | $ | — | $ | $ | $ | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
|
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|
• | Immediately prior to the Closing, TPG Pace became a Delaware corporation and renamed Nerdy Inc.; |
• | TPG Pace’s outstanding Class A ordinary shares and Class F ordinary shares were converted into corresponding shares of Nerdy Inc.’s Class A common stock, par value $ |
• | Following the Domestication, Nerdy LLC merged with a wholly-owned subsidiary of Nerdy Inc. (the “Merger”), with Nerdy LLC surviving such merger; |
• | In accordance with Nerdy LLC’s amended and restated limited liability company agreement (the “Nerdy LLC Agreement”), existing ownership interests in Nerdy LLC (including redeemable preferred units) were converted into Nerdy LLC units (the “OpCo Units”). Additionally, the Nerdy LLC Agreement provided that Nerdy LLC will be managed by a |
• | Holders of Nerdy LLC common and preferred units (the “Legacy Nerdy Holders”) exchanged their historical Nerdy LLC equity for: (i) cash consideration of $ |
• | Nerdy Inc. contributed all of its assets (other than the OpCo Units it then held) to Nerdy LLC in exchange for additional OpCo Units and OpCo Warrants, such that Nerdy Inc. will hold a number of OpCo Units equal to the total number of shares of Class A Common Stock and OpCo Warrants equal to the total number of Public Warrants; |
• | Nerdy Inc. issued and sold |
• | Nerdy Inc. issued and sold |
• | Nerdy Inc. is a holding company that has no material assets other than its ownership interests in Nerdy LLC and its indirect interests in the subsidiaries of Nerdy LLC, and has no independent means of generating revenue or cash flow; |
• | Nerdy Inc. had the following securities outstanding: (i) |
• | Members of Nerdy LLC are the Legacy Nerdy Holders and Nerdy Inc.; |
• | Nerdy LLC had the following OpCo Units and OpCo Warrants outstanding: (i) |
• | Legacy Nerdy Holders owned |
Date at the option of the Legacy Nerdy Holders on a e -for-one |
• | Public stockholders of Nerdy Inc., including certain Legacy Nerdy Holders, (i) owned |
• | Nerdy LLC is managed by a |
• | Financial results of Nerdy LLC and its wholly-owned subsidiaries are consolidated with and into Nerdy Inc., and following the Reverse Recapitalization on September 20, 2021, a portion of the consolidated net earnings (loss) of Nerdy LLC, which the Legacy Nerdy Holders are entitled to or are required to absorb, are allocated to the noncontrolling interests (the “NCI”). The Company has excluded Earnouts in the calculation of the ownership interests in Nerdy LLC as the Earnouts are subject to forfeiture if the achievement of certain stock price thresholds are not met within five years of the Reverse Recapitalization. To the extent these price thresholds are met, the Earnouts will no longer be subject to forfeiture and the units will then be included in the calculation of the ownership interests in Nerdy LLC. |
• | Triggering Event 1 will occur on the date when the closing price of Class A Common Stock quoted on the New York Stock Exchange (the “NYSE”) is greater than or equal to $ one-third of the Earnouts will no longer be subject to forfeiture. |
• | Triggering Event 2 will occur on the date when the closing price of Class A Common Stock quoted on the NYSE is greater than or equal to $ one-third of the Earnouts will no longer be subject to forfeiture. |
• | Triggering Event 3 will occur on the date when the closing price of Class A Common Stock quoted on the NYSE is greater than or equal to $ one-third of the Earnouts will no longer be subject to forfeiture. |
Cash and cash equivalents |
$ | |||
Other current assets |
||||
Other current liabilities (a) |
( |
) | ||
Total net assets |
$ | |||
(a) | Includes historical warrants held by TPG Pace that were exchanged for Private Placement Warrants and Public Warrants of Nerdy Inc. in connection with the Reverse Recapitalization. |
OpCo Units |
Ownership Percentage |
|||||||||||||||||||||||
Nerdy Inc. (a) |
Legacy Nerdy Holders |
Total |
Nerdy Inc. (a) |
Legacy Nerdy Holders |
Total |
|||||||||||||||||||
Beginning of period |
— | — | % | — | % | — | % | |||||||||||||||||
Issuance of OpCo Units |
% | % | % | |||||||||||||||||||||
Vesting of equity awards |
% | % | % | |||||||||||||||||||||
End of period |
% | % | % | |||||||||||||||||||||
(a) | Includes OpCo Units held by certain Legacy Nerdy Holders, who were issued Nerdy Inc. |
Year ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Online |
$ | $ | $ | |||||||||
In-person |
||||||||||||
$ | $ | $ | ||||||||||
December 31, |
||||||||
2021 |
2020 |
|||||||
Accounts receivable, net |
$ | $ | ||||||
Deferred revenue |
$ | $ |
Year Ended December 31, 2021 |
||||
Current: |
||||
Federal |
$ | |||
State and local |
||||
|
|
|||
|
|
|||
Deferred: |
||||
Federal |
||||
State and local |
||||
|
|
|||
|
|
|||
Income tax expense |
$ | |||
|
|
|||
Loss before income taxes after the Reverse Recapitalization |
$ | ( |
) | |
Effective income tax rate |
( |
)% |
Year Ended December 31, 2021 |
||||
Computed tax (21%) |
$ | ( |
) | |
Partnership outside basis adjustments |
( |
) | ||
Income tax benefit attributable to NCI |
||||
Change in valuation allowance |
||||
State income tax benefit, net of effect on federal tax |
( |
) | ||
Other, net (none in excess of 5% of computed tax) |
( |
) | ||
|
|
|||
Income tax expense |
$ | |||
|
|
December 31, 2021 |
||||||||||||
Assets |
Liabilities |
Net |
||||||||||
Investment in Nerdy LLC (a) |
$ | $ | — | $ | ||||||||
Net operating loss and credit carryforwards |
— | |||||||||||
Other items |
— | |||||||||||
|
|
|
|
|
|
|||||||
Total gross deferred income taxes |
— | |||||||||||
Valuation allowance |
( |
) | — | ( |
) | |||||||
|
|
|
|
|
|
|||||||
Total deferred taxes |
$ | $ | — | $ | ||||||||
|
|
|
|
|
|
(a) | The Company’s deferred tax asset for investment in partnership relates to excess tax outside basis over financial reporting outside basis in Nerdy LLC, which is treated as a partnership for U.S. federal income tax purposes. |
Year Ended December 31, 2021 |
||||
Balance, beginning of year |
$ | |||
Reverse Recapitalization (a) |
( |
) | ||
Change in valuation allowance |
( |
) | ||
|
|
|||
Balance, end of year |
$ | ( |
) | |
|
|
(a) | The initial recognition of the Company’s valuation allowance in connection with the Reverse Recapitalization was recorded to “Additional paid-in capital” on the Consolidated Balance Sheet. |
Net loss attributable to Class A Common Stockholders for basic and diluted loss per share |
$ | ( |
) | |
Weighted-average shares for basic and diluted loss per share |
||||
Basic and Diluted loss per share of Class A Common Stock |
$ | ( |
) | |
Stock options |
||||
Stock appreciation rights |
||||
Restricted stock awards |
||||
Restricted stock units |
||||
Restricted stock units—founder’s award |
||||
Warrants |
||||
Earnouts |
||||
Combined Interests that can be converted into shares of Class A Common Stock |
December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Cash and cash equivalents |
$ | $ | $ | |||||||||
Restricted cash included in Other current assets |
||||||||||||
Restricted cash included in Other assets |
||||||||||||
Total Cash, Cash Equivalents, and Restricted Cash shown in the Consolidated Statements of Cash Flows |
$ | $ | $ | |||||||||
December 31, |
||||||||
2021 |
2020 |
|||||||
Capitalized internal use software |
$ | $ | ||||||
Office equipment |
||||||||
Leasehold improvements |
||||||||
Furniture & fixtures |
||||||||
Other |
||||||||
Accumulated depreciation |
( |
) | ( |
) | ||||
$ | $ | |||||||
December 31, |
||||||||||||||
Statement of Operations Location |
2021 |
2020 |
2019 |
|||||||||||
Amortization expense related to capitalized internal use software |
Cost of revenue | $ | $ | $ | ||||||||||
Depreciation expense |
General and administrative expenses |
December 31, 2021 |
December 31, 2020 |
|||||||||||||||||||||||
Carrying Amount |
Accum. Amort. |
Net Amount |
Carrying Amount |
Accum. Amort. |
Net Amount |
|||||||||||||||||||
Trade names |
$ | $ | ( |
) | $ | $ | $ | ( |
) | $ | ||||||||||||||
Foreign currency translation adjustment |
( |
) | $ | |||||||||||||||||||||
$ | $ | ( |
) | $ | $ | $ | ( |
) | $ | |||||||||||||||
2022 |
$ | |||
2023 |
||||
2024 |
||||
2025 |
||||
2026 |
December 31, |
||||||||
2021 |
2020 |
|||||||
Accrued payroll |
||||||||
Accrued professional services |
||||||||
Accrued CARES Act FICA deferral |
||||||||
Accrued sublease liability |
||||||||
Other |
||||||||
$ | $ | |||||||
Balance Sheet Location |
Fair Value |
|||||||
Non-employee Warrants |
Other liabilities | $ | ||||||
Non-employee Earnouts |
Other liabilities | |||||||
$ | ||||||||
Statement of Operations Location |
||||||||
Non-employee Warrants |
Unrealized gain on derivatives | $ | ||||||
Non-employee Earnouts |
Unrealized gain on derivatives | |||||||
$ | ||||||||
December 31, 2021 |
||||||||||||||||
Total |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||
Non-employee Warrants |
$ | $ | $ | $ | ||||||||||||
Non-employee Earnouts |
||||||||||||||||
$ | $ | $ | $ | |||||||||||||
Balance, December 31, 2020 |
$ | |||
Initial valuation of the Non-employee Earnout liability |
||||
Mark-to-market Non-employee Earnout liability |
( |
) | ||
Balance, December 31, 2021 |
$ | |||
September 20, 2021 |
December 31, 2021 |
|||||||
Expected term (in years) |
||||||||
Stock price |
$ | $ | ||||||
Expected stock price volatility |
% | % | ||||||
Risk-free interest rate |
% | % | ||||||
Expected dividends |
% | % | ||||||
Fair Value (per Earnout) |
$ | $ |
December 31, |
||||||||
2021 |
2020 |
|||||||
Loan and security agreement |
$ | $ | ||||||
Promissory note |
||||||||
Paid-in-kind |
||||||||
End of term charge |
||||||||
Less: Debt issuance costs, net |
( |
) | ||||||
Total debt |
$ | $ | ||||||
Less: Current portion of long-term debt |
||||||||
Total long-term debt |
$ | $ | ||||||
2022 |
$ | |||
2023 |
||||
2024 |
||||
2025 |
||||
2026 |
||||
Thereafter |
||||
|
|
|||
Total |
$ | |||
|
|
2022 |
$ | |||
2023 |
||||
2024 |
||||
2025 |
||||
2026 |
||||
Thereafter |
||||
|
|
|||
Total |
$ | |||
|
|
Year ended December 31, |
||||||||||||
Financial Statement Location |
2021 |
2020 |
2019 |
|||||||||
Sales and marketing expenses |
$ | $ | $ | |||||||||
General and administrative expenses |
||||||||||||
Fixed assets, net (capitalized internal use software) |
||||||||||||
|
|
|
|
|
|
|||||||
Total non-cash stock-based compensation costs |
$ | $ | $ | |||||||||
|
|
|
|
|
|
in thousands, except UARs and SARs, which are in ones, or where otherwise indicated |
SARs |
Weighted- Average Exercise Price Per Share |
Weighted- Average Remaining Contractual Terms in Years |
Aggregate Intrinsic Value |
||||||||||||
Outstanding UARs at December 31, 2020 |
$ | |||||||||||||||
UARs granted prior to the Reverse Recapitalization |
||||||||||||||||
UARs exercised prior to the Reverse Recapitalization |
||||||||||||||||
UARs forfeited prior to the Reverse Recapitalization |
( |
) | ||||||||||||||
UARs expired prior to the Reverse Recapitalization |
||||||||||||||||
Conversion to SARs |
( |
) | ||||||||||||||
SARs granted after the Reverse Recapitalization |
||||||||||||||||
SARs exercised after the Reverse Recapitalization |
||||||||||||||||
SARs forfeited after the Reverse Recapitalization |
||||||||||||||||
SARs expired after the Reverse Recapitalization |
( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Outstanding SARs at December 31, 2021 |
$ | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
SARs vested and expected to vest as of December 31, 2021 |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
SARs exercisable at December 31, 2021 |
||||||||||||||||
|
|
|
|
|
|
|
|
2021 |
||||
Expected term (in years) |
||||
Expected stock price volatility |
% | |||
Risk-free interest rate |
% | |||
Expected dividends |
% | |||
Fair Value (per SAR) |
$ |
PIUs and RSAs are in ones and where otherwise indicated |
RSAs |
Weighted- Average Grant Date Fair Value Per Share |
||||||
Nonvested PIUs at December 31, 2020 |
$ | |||||||
PIUs granted prior to the Reverse Recapitalization |
||||||||
PIUs vested prior to the Reverse Recapitalization |
( |
) | ||||||
PIUs forfeited prior to the Reverse Recapitalization |
||||||||
Conversion to RSAs |
( |
) | ||||||
RSAs granted after the Reverse Recapitalization |
||||||||
RSAs vested after the Reverse Recapitalization |
( |
) | ||||||
RSAs forfeited after the Reverse Recapitalization |
( |
) | ||||||
|
|
|||||||
Nonvested RSAs at December 31, 2021 |
||||||||
|
|
2020 |
2019 |
|||||||
Expected term (in years) |
||||||||
Expected stock price volatility |
% | % | ||||||
Risk-free interest rate |
% | % | ||||||
Expected dividends |
% | % | ||||||
Fair Value (per PIU) |
$ | $ |
Stock Options are in ones and where otherwise indicated |
Stock Options |
Weighted- Average Exercise Price Per Share |
Weighted- Average Remaining Contractual Terms in Years |
Aggregate Intrinsic Value |
||||||||||||
Outstanding at December 31, 2020 |
$ | |||||||||||||||
Granted after the Reverse Recapitalization |
||||||||||||||||
Exercised after the Reverse Recapitalization |
||||||||||||||||
Forfeited after the Reverse Recapitalization |
( |
) | ||||||||||||||
Expired after the Reverse Recapitalization |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Outstanding at December 31, 2021 |
$ | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Vested and expected to vest as of December 31, 2021 |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Exercisable at December 31, 2021 |
— | |||||||||||||||
|
|
|
|
|
|
|
|
2021 |
||||
Expected term (in years) |
||||
Expected stock price volatility |
% | |||
Risk-free interest rate |
% | |||
Expected dividends |
% | |||
Fair Value (per stock option) |
$ |
RSUs in ones and where otherwise indicated |
RSUs |
Weighted- Average Grant Date Fair Value Per Share |
||||||
Nonvested at December 31, 2020 |
$ | |||||||
Granted after the Reverse Recapitalization |
||||||||
Vested after the Reverse Recapitalization |
( |
) | ||||||
Forfeited after the Reverse Recapitalization |
( |
) | ||||||
|
|
|||||||
Nonvested at December 31, 2021 |
||||||||
|
|
RSUs - Founder’s Award in ones and where otherwise indicated |
RSUs - Founder’s Award |
Weighted- Average Grant Date Fair Value Per Share |
||||||
Nonvested at December 31, 2020 |
$ | |||||||
Granted after the Reverse Recapitalization |
||||||||
Vested after the Reverse Recapitalization |
||||||||
Forfeited after the Reverse Recapitalization |
||||||||
|
|
|||||||
Nonvested at December 31, 2021 |
||||||||
|
|
2021 |
||||
Expected term (in years) |
||||
Stock price |
$ | |||
Expected stock price volatility |
% | |||
Risk-free interest rate |
% | |||
Fair Value (per award) |
$ |
Employee Warrants are in ones and where otherwise indicated |
Employee Warrants |
Weighted- Average Exercise Price Per Share |
Weighted- Average Remaining Contractual Terms in Years |
Aggregate Intrinsic Value |
||||||||||||
Outstanding at December 31, 2020 |
$ | |||||||||||||||
Granted in connection with the Reverse Recapitalization |
||||||||||||||||
Exercised after the Reverse Recapitalization |
||||||||||||||||
Forfeited after the Reverse Recapitalization |
||||||||||||||||
Expired after the Reverse Recapitalization |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Outstanding at December 31, 2021 |
$ | |||||||||||||||
|
|
|
|
|
|
|
|
Employee earnouts in ones and where otherwise indicated |
Employee Earnouts |
Weighted- Average Grant Date Fair Value Per Share |
||||||
Nonvested at December 31, 2020 |
$ | |||||||
Granted in connection with the Reverse Recapitalization |
||||||||
Vested after the Reverse Recapitalization |
||||||||
Forfeited after the Reverse Recapitalization |
||||||||
|
|
|
|
|||||
Nonvested at December 31, 2021 |
||||||||
|
|
|
|
Redeemable Preferred Units |
||||||||||||||||
Class B |
Class C |
|||||||||||||||
Units |
Value |
Units |
Value |
|||||||||||||
Balance, December 31, 2019 and 2018 |
$ | $ | ||||||||||||||
Redeemable preferred unit accretion |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance, December 31, 2020 |
$ | $ | ||||||||||||||
Reverse Recapitalization |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance, December 31, 2021 |
$ | $ | ||||||||||||||
|
|
|
|
|
|
|
|
Item 13. |
Other Expenses of Issuance and Distribution. |
Amount |
||||
SEC registration fee |
$ | 122,948 | ||
Accounting fees and expenses |
* | |||
Legal fees and expenses |
* | |||
Miscellaneous fees and expenses |
* | |||
|
|
|||
Total expenses |
$ | * | ||
|
|
* | These fees are calculated based on the securities offered and the number of issuances and accordingly cannot be defined at this time. |
Item 14. |
Indemnification of Directors and Officers |
Item 15. |
Recent Sales of Unregistered Securities. |
Item 16. |
Exhibits and Financial Statements Schedules |
† | Certain confidential portions (indicated by brackets and asterisks) have been omitted from this exhibit. |
†† | Schedules and exhibits to this Exhibit omitted pursuant to Regulation S-K Item 601(b)(2). The Registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request. |
* | previously filed |
** | filed herewith |
Item 17. |
Undertakings |
1. | The undersigned Registrant hereby undertakes: |
(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 of 1933, as amended (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 Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% 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; provided however S-1 and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of 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 purchaser: |
(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: |
(a) | any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
(b) | 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; |
(c) | the portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of an undersigned registrant; and |
(d) | any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
Nerdy Inc. | ||
By: | /s/ Jason Pello | |
Name: Jason Pello | ||
Title: Chief Financial Officer |
Signature |
Title | |
/s/ Charles Cohn* Charles Cohn |
Director and Chief Executive Officer (Principal Executive Officer) | |
/s/ Jason Pello* Jason Pello |
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | |
/s/ Catherine Beaudoin* Catherine Beaudoin |
Director | |
/s/ Erik Blachford* Erik Blachford |
Director | |
/s/ Rob Hutter* Rob Hutter |
Director | |
/s/ Christopher Marshall* Christopher Marshall |
Director | |
/s/ Greg Mrva* Greg Mrva |
Director | |
/s/ Kathleen Philips* Kathleen Philips |
Director |
* | By Power of Attorney |