ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) | |
(Address of principal executive offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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Item 1. |
1 |
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Item 1A. |
8 |
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Item 1B. |
39 |
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Item 2. |
39 |
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Item 3. |
39 |
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Item 4. |
39 |
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Item 5. |
40 |
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Item 6. |
41 |
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Item 7. |
41 |
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Item 7A. |
44 |
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Item 8. |
44 |
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Item 9. |
44 |
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Item 9A. |
45 |
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Item 9B. |
46 |
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Item 10. |
47 |
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Item 11. |
54 |
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Item 12. |
54 |
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Item 13. |
56 |
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Item 14. |
59 |
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Item 15. |
60 |
• |
“amended and restated memorandum and articles of association” are to the amended and restated memorandum and articles of association that the Company adopted prior to the consummation of the Initial Public Offering; |
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“Companies Law” are to the Companies Law (2020 Revision) of the Cayman Islands as the same may be amended from time to time; |
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“directors” are to our directors; |
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“forward purchase agreement” is to the agreement providing for the sale of forward purchase units to the forward purchase investors in a private placement that will close substantially concurrently with the closing of our initial business combination, subject to approval at such time by the MidOcean investment committee; |
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“forward purchase investors” are Empower Funding and any assignees of Empower Funding under Empower Funding’s forward purchase agreement; |
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“forward purchase securities” are to the forward purchase shares and forward purchase warrants; |
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“forward purchase shares” are to the Class A ordinary shares included in the forward purchase units; |
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“forward purchase units” are to the units to be issued to the forward purchase investors pursuant to the forward purchase agreement; |
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“forward purchase warrants” are to the warrants to purchase our Class A ordinary shares included in the forward purchase units; |
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“Founders” are to Matthew Rubel and Graham Clempson; |
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“founder shares” are to our Class B ordinary shares initially issued to our sponsor in a private placement prior to the Initial Public Offering and the Class A ordinary shares that will be issued upon the automatic conversion of the Class B ordinary shares at the time of our initial business combination or earlier at the option of the holders thereof (for the avoidance of doubt, such Class A ordinary shares will not be “public shares”); |
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“management” or our “management team” are to our executive officers and directors; |
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“MidOcean” are to MidOcean Partners, an affiliate of our sponsor; |
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“ordinary shares” are to our Class A ordinary shares and our Class B ordinary shares; |
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“private placement warrants” are to the warrants issued to our sponsor in a private placement simultaneously with the closing of the Initial Public Offering and upon conversion of working capital loans, if any; |
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“public shares” are to our Class A ordinary shares sold as part of the units the Initial Public Offering (whether they are purchased in the Initial Public Offering or thereafter in the open market); |
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“public shareholders” are to the holders of our public shares, including our sponsor and management team to the extent our sponsor and/or members of our management team purchase public shares, provided that our sponsor’s and each member of our management team’s status as a “public shareholder” will only exist with respect to such public shares; |
• |
“sponsor” are to Empower Sponsor Holdings LLC, a Delaware limited liability company; and |
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“we,” “us,” “our,” “company” or “our company” are to Empower Ltd., a Cayman Islands exempted company. |
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Part I – Item 1A. Risk Factors. |
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Part II – Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
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Part II – Item 8. Financial Statements and Supplementary Data. |
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Part II – Item 9A. Controls and Procedures. |
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Part IV – Item 15. Exhibits, Financial Statement Schedules. |
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our ability to complete our initial business combination; |
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our expectations around the performance of a prospective target business or businesses; |
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our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination; |
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our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination; |
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the proceeds of the forward purchase units being available to us; |
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our potential ability to obtain additional financing to complete our initial business combination; |
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our pool of prospective target businesses; |
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our ability to consummate an initial business combination due to the uncertainty resulting from the recent COVID-19 pandemic; |
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the ability of our officers and directors to generate a number of potential investment opportunities; |
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our public securities’ potential liquidity and trading; |
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the lack of a market for our securities; |
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expectations regarding the time during which we will be an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”); |
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the use of proceeds not held in the trust account or available to us from interest income on the trust account balance; |
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the trust account not being subject to claims of third parties; or |
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our financial performance. |
• | How brands are built and what is expected of them is changing: traditional notions of branding and status have evolved to include purpose and a sense of community, the use of business as a powerful force for good, and sustainability. |
• | Products, services and experiences are being evolved and co-created in a manner requiring dramatic shifts in businesses’ approaches to innovation and development. |
• | The consumer journey is more multi-faceted than ever: speed, agility and relentless focus, paired with exceptional products, services, experiences, innovation and branding are necessary to drive customer acquisition, assessment, engagement, purchase intent and, ultimately, retention. |
• | Channels, traffic patterns and go-to-market |
• | Digital acumen is a requirement for success: acceleration of digital engagement will create a path for more intimate connections with consumers, communities and the ability to provide both personalization and convenience. |
• | The shift towards healthy, active and sustainable lifestyles is permanent: a holistic approach to health, wellness and hygiene will continue to garner greater share of the consumer wallet. |
• | Operational excellence is a strategic weapon: agility to shift supply chains and operational execution will be enabled via a well-organized infrastructure that matches consumer demand requirements and functions in lockstep with the front-end of the business. Infrastructure and an ability to execute flawlessly are critical tools. |
• | “Global” now also means “local”: the ability to support market localization, from consumer engagement to supply chain, is an opportunity across all categories. |
• | Strong core business with a competitive market position |
• | Attractive financial profile |
• | Proven management team |
• | Strong corporate culture |
• | Opportunity for operational improvement |
• | Platform for organic and potentially inorganic growth |
• | Will benefit from being a public company |
• | Appropriate valuation |
• | We are a recently incorporated company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective. |
• | Past performance by our management team or their respective affiliates may not be indicative of future performance of an investment in us. |
• | Our shareholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may complete our initial business combination even though a majority of our shareholders do not support such a combination. |
• | Your only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash. |
• | If we seek shareholder approval of our initial business combination, our sponsor and members of our management team have agreed to vote in favor of such initial business combination, regardless of how our public shareholders vote. |
• | The ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target. |
• | The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure. |
• | The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares. |
• | The requirement that we consummate an initial business combination within 24 months after the closing of the Initial Public Offering may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our shareholders. |
• | Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the recent coronavirus (COVID-19) outbreak and the status of debt and equity markets. We may not be able to consummate an initial business combination within 24 months after the closing of the Initial Public Offering, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate. |
• | If we seek shareholder approval of our initial business combination, our sponsor, directors, executive officers, advisors and their affiliates may elect to purchase public shares or warrants, which may influence a vote on a proposed business combination and reduce the public “float” of our Class A ordinary shares or public warrants. |
• | If a shareholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed. |
• | You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss. |
• | The NYSE may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions. |
• | Our security holders are not entitled to protections normally afforded to investors of many other blank check companies. |
• | Because of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we have not consummated our initial business combination within the required time period, our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless. |
• | If the net proceeds of the Initial Public Offering and the sale of the private placement warrants not being held in the trust account are insufficient to allow us to operate for the 12 months following the closing of the Initial Public Offering, it could limit the amount available to fund our search for a target business or businesses and our ability to complete our initial business combination, and we will depend on loans from our sponsor, its affiliates or members of our management team to fund our search and to complete our initial business combination. |
• | Subsequent to our completion of our initial business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and the price of our securities, which could cause you to lose some or all of your investment. |
• | If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.00 per public share. |
• | The securities in which we invest the proceeds held in the trust account could bear a negative rate of interest, which could reduce the interest income available for payment of taxes or reduce the value of the assets held in trust such that the per share redemption amount received by shareholders may be less than $10.00 per share. |
• | After our initial business combination, substantially all of our assets may be located in a foreign country and substantially all of our revenue may be derived from our operations in any such country. Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic, political and social conditions and government policies, developments and conditions in the country in which we operate. |
• | Because we are incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited. |
• | Provisions in our amended and restated memorandum and articles of association may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A ordinary shares and could entrench management. |
• | Warrants and the forward purchase agreement are accounted for as liabilities and the changes in value of our Warrants and forward purchase agreement could have a material effect on our financial results. |
• | Potential for litigation or other disputes may arise from the restatement our financial statements and identification of a material weakness in our internal controls over financial reporting and the preparation of our financial statements. |
• | may significantly dilute the equity interest of investors in the Initial Public Offering, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one |
• | may subordinate the rights of holders of Class A ordinary shares if preference shares are issued with rights senior to those afforded our Class A ordinary shares; |
• | could cause a change in control if a substantial number of Class A ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; |
• | may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us; |
• | may adversely affect prevailing market prices for our units, Class A ordinary shares and/or warrants; and |
• | may not result in adjustment to the exercise price of our warrants. |
• | default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations; |
• | acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
• | our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand; |
• | our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding; |
• | our inability to pay dividends on our Class A ordinary shares; |
• | using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes; |
• | limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
• | increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and |
• | limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. |
• | solely dependent upon the performance of a single business, property or asset; or |
• | dependent upon the development or market acceptance of a single or limited number of products, processes or services. |
• | costs and difficulties inherent in managing cross-border business operations; |
• | rules and regulations regarding currency redemption; |
• | complex corporate withholding taxes on individuals; |
• | laws governing the manner in which future business combinations may be effected; |
• | exchange listing and/or delisting requirements; |
• | tariffs and trade barriers; |
• | regulations related to customs and import/export matters; |
• | local or regional economic policies and market conditions; |
• | unexpected changes in regulatory requirements; |
• | longer payment cycles; |
• | tax issues, such as tax law changes and variations in tax laws as compared to the United States; |
• | currency fluctuations and exchange controls; |
• | rates of inflation; |
• | challenges in collecting accounts receivable; |
• | cultural and language differences; |
• | employment regulations; |
• | underdeveloped or unpredictable legal or regulatory systems; |
• | corruption; |
• | protection of intellectual property; |
• | social unrest, crime, strikes, riots and civil disturbances; |
• | regime changes and political upheaval; |
• | terrorist attacks, natural disasters and wars; and |
• | deterioration of political relations with the United States. |
• | a limited availability of market quotations for our securities; |
• | reduced liquidity for our securities; |
• | a determination that our Class A ordinary shares are a “penny stock” which will require brokers trading in our Class A ordinary shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; |
• | a limited amount of news and analyst coverage; and |
• | a decreased ability to issue additional securities or obtain additional financing in the future. |
• | we have a board that includes a majority of “independent directors,” as defined under the rules of the NYSE; |
• | we have a compensation committee of our board that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and |
• | we have a nominating and corporate governance committee of our board that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities. |
• | restrictions on the nature of our investments; and |
• | restrictions on the issuance of securities, each of which may make it difficult for us to complete our initial business combination. In addition, we may have imposed upon us burdensome requirements, including: |
• | registration as an investment company with the SEC; |
• | adoption of a specific form of corporate structure; and |
• | reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations that we are currently not subject to. |
Name |
Age |
Title | ||
Matthew Rubel | 62 | Executive Chairman and Chief Executive Officer | ||
Graham Clempson | 59 | President and Director | ||
Andrew Spring | 52 | Chief Financial Officer | ||
Krishnan (Kandy) Anand | 63 | Director | ||
Gina Bianchini | 48 | Director | ||
Jeffrey Jones | 59 | Director | ||
Beth Kaplan | 62 | Director |
• | meeting with our independent registered public accounting firm regarding, among other issues, audits, and adequacy of our accounting and control systems; |
• | monitoring the independence of the independent registered public accounting firm; |
• | establishing, supervising and reviewing policies for audit partner rotation in compliance with applicable laws and regulations; |
• | inquiring and discussing with management our compliance with applicable laws and regulations; |
• | pre-approving all audit services and permitted non-audit services to be performed by our independent registered public accounting firm, including the fees and terms of the services to be performed; |
• | the appointment, compensation, retention, replacement and oversight of the work of any independent registered public accounting firm (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work; |
• | establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies; |
• | monitoring compliance on a quarterly basis with the terms of this offering and, if any noncompliance is identified, immediately taking all action necessary to rectify such noncompliance or otherwise causing compliance with the terms of this offering; and |
• | reviewing and approving all payments made to our existing shareholders, executive officers or directors and their respective affiliates. Any payments made to members of our audit committee will be reviewed and approved by our board of directors, with the interested director or directors abstaining from such review and approval. |
• | reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation; |
• | reviewing and approving the compensation of all of our other Section 16 executive officers; |
• | reviewing our executive compensation policies and plans; |
• | implementing and administering our incentive compensation equity-based remuneration plans; |
• | assisting management in complying with our proxy statement and annual report disclosure requirements; |
• | approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our executive officers and employees; |
• | producing a report on executive compensation to be included in our annual proxy statement; and |
• | reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors. |
• | duty to act in good faith in what the director or officer believes to be in the best interests of the Company as a whole; |
• | duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose; |
• | directors should not improperly fetter the exercise of future discretion; |
• | duty to exercise powers fairly as between different sections of shareholders; |
• | duty not to put themselves in a position in which there is a conflict between their duty to the Company and their personal interests; and |
• | duty to exercise independent judgment. |
Individual |
Entity |
Type of Business |
Affiliation | |||
Matthew Rubel |
MidOcean Partners (1) |
Private Equity | Chairman of Executive Board | |||
KidKraft | Manufacturing | Executive Chairman | ||||
TreeHouse Foods | Food Processing | Director | ||||
The Joint Chiropractic | Chiropractic Care | Director | ||||
Image Skincare | Skincare | Director | ||||
TOMS Shoes | Footwear | Director | ||||
Graham Clempson |
MidOcean Partners (1) |
Private Equity | Vice Chairman and Co-founder | |||
Bandier Holdings LLC | Sportswear | Director | ||||
Display Data PLC | Information Services | Director | ||||
Thorough Events Holdings Ltd | Events Services | Director | ||||
Allied Film Makers Ltd | Production | Director | ||||
Andrew Spring |
MidOcean Partners (1) |
Private Equity | Managing Director and Chief Financial Officer | |||
Krishnan (Kandy) Anand |
Folium Bio Sciences | Wholesaler | Director | |||
Wingstop Inc. | Restaurants | Director | ||||
Gina Bianchini |
Mighty Networks | Software | Chief Executive Officer | |||
TEGNA | Broadcasting | Director | ||||
Jeffrey Jones |
Noodles & Company | Restaurants | Chairman of the Board | |||
Hershey Entertainment & Resorts | Entertainment | Lead Independent Director | ||||
Summit Hotel Properties, Inc. | REIT | Lead Independent Director | ||||
ClubCorp | Golf and Membership Clubs | Director | ||||
Beth Kaplan |
Axcel Partners, LLC | Private Equity | Managing Member | |||
Meredith Corporation | Media | Director | ||||
Howard Hughes Corporation | Real Estate | Director | ||||
Crocs | Consumer Shoe Brand | Director | ||||
Rent the Runway | Apparel Rental Services | Director and Advisor | ||||
Care/of | Health Technology | Director and Advisor | ||||
Leesa Sleep | Mattress Retailer | Director and Advisor |
(1) | Includes MidOcean Partners and certain of its funds, affiliates, and other related entities, including certain portfolio companies in which the funds and other related entities invest. |
• | Our executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a business combination and their other businesses. We do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our executive officers is engaged in several other business endeavors for which he may be entitled to substantial compensation, and our executive officers are not obligated to contribute any specific number of hours per week to our affairs. |
• | Our sponsor subscribed for founder shares prior to the date of our Initial Public Offering and purchased private placement warrants at the time of the Initial Public Offering. |
• | We entered into a forward purchase agreement with Empower Funding, which is an affiliate of our sponsor, at the time of the Initial Public Offering. |
• | Our sponsor and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and public shares held by them in connection with (i) the completion of our initial business combination, and (ii) a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance |
or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of the Initial Public Offering or during any extension period or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares. Additionally, our sponsor has agreed to waive its rights to liquidating distributions from the trust account with respect to its founder shares if we fail to complete our initial business combination within the prescribed time frame. If we do not complete our initial business combination within the prescribed time frame, the private placement warrants will expire worthless. Except as described herein, our sponsor and our directors and executive officers have agreed not to transfer, assign or sell any of their founder shares until the earliest of (A) one year after the completion of our initial business combination and (B) subsequent to our initial business combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like) for at least 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, share exchange or other similar transaction that results in all of our public shareholders having the right to exchange their ordinary shares for cash, securities or other property. Except as described herein, the private placement warrants will not be transferable until 30 days following the completion of our initial business combination. Because each of our executive officers and director nominees will own ordinary shares or warrants directly or indirectly, they may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. |
• | Our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors is included by a target business as a condition to any agreement with respect to our initial business combination. In addition, our Founders, sponsor, officers and directors may sponsor, form or participate in other blank check companies similar to ours during the period in which we are seeking an initial business combination. Any such companies may present additional conflicts of interest in pursuing an acquisition target, particularly in the event there is overlap among investment mandates. |
• | each person known by us to be the beneficial owner of more than 5% of our issued and outstanding ordinary shares; |
• | each of our executive officers and directors; and |
• | all our executive officers and directors as a group. |
Class B Ordinary Shares (2) |
Class A Ordinary Shares |
|||||||||||||||||||
Name and Address of Beneficial Owner (1) |
Number of Shares Beneficially Owned |
Approximate Percentage of Class |
Number of Shares Beneficially Owned |
Approximate Percentage of Class |
Approximate Percentage of Voting Control |
|||||||||||||||
Sculptor Capital LP (3) |
— | — | 2,287,075 | 9.1 | % | 7.3 | % | |||||||||||||
Glazer Capital, LLC (4) |
— | — | 2,253,641 | 9.0 | % | 7.2 | % | |||||||||||||
Periscope Capital Inc. (5) |
— | — | 1,449,100 | 5.8 | % | 4.6 | % | |||||||||||||
Empower Sponsor Holdings LLC |
6,250,000 | (6) |
100.0 | % | — | — | 20.0 | % | ||||||||||||
Matthew Rubel |
— | (7) |
— | — | — | — | ||||||||||||||
Graham Clempson |
— | (7) |
— | — | — | — | ||||||||||||||
Andrew Spring |
— | (7) |
— | — | — | — | ||||||||||||||
Krishnan (Kandy) Anand |
— | (7) |
— | — | — | — | ||||||||||||||
Gina Bianchini |
— | (7) |
— | — | — | — | ||||||||||||||
Jeffrey Jones |
— | (7) |
— | — | — | — | ||||||||||||||
Beth Kaplan |
— | (7) |
— | — | — | — | ||||||||||||||
All officers and directors as a group (7 individuals) |
— | (7) |
— |
(1) | Unless otherwise noted, the business address of each of our shareholders is 245 Park Avenue, 38th Floor, New York, NY 10167. |
(2) | Interests shown consist solely of founder shares, classified as Class B ordinary shares. Such shares will automatically convert into Class A ordinary shares at the time of our initial business combination or earlier at the option of the holders thereof Excludes Class A ordinary shares issuable pursuant to the forward purchase agreement, as such shares will only be issued, if at all, at the time of our initial business combination. |
(3) | Based on the Schedule 13G/A filed with the SEC on February 5, 2021 by Sculptor Capital LP. According to its Schedule 13G/A, Sculptor Capital reported having sole voting power over no shares, shared voting power over 2,287,075 Class A ordinary shares, sole dispositive power over no shares and shared dispositive power over 2,287,075 Class A ordinary shares. The Schedule 13G/A contained information as of December 31, 2020. The address of Sculptor Capital is 9 West 57th Street, New York, New York 10019. |
(4) | Based on the Schedule 13G/A filed with the SEC on February 16, 2021 by Glazer Capital, LLC. According to its Schedule 13G/A, Glazer Capital reported having sole voting power over no shares, shared voting power over 2,253,641 Class A ordinary shares, sole dispositive power over no shares and shared dispositive power over 2,253,641 Class A ordinary shares. The Schedule 13G/A contained information as of December 31, 2020. The address of Glazer Capital is 250 West 55th Street, Suite 30A, New York, New York 10019. |
(5) | Based on the Schedule 13G filed with the SEC on February 16, 2021 by Periscope Capital Inc. According to its Schedule 13G, Periscope Capital reported having sole voting power over no shares, shared voting power over 1,449,100 Class A ordinary shares, sole dispositive power over no shares and shared dispositive power over 1,449,100 Class A ordinary shares. The Schedule 13G contained information as of December 31, 2020. The address of Periscope Capital is 333 Bay Street, Suite 1240, Toronto, Ontario, Canada M5H 2R2. |
(6) | Our sponsor, Empower Sponsor Holdings LLC, is the record holder of the shares reported. The managing member of our sponsor is MidOcean Associates V, L.P. (“Associates”). The general partner of Associates is Ultramar Capital, Ltd. (“Ultramar”), which is controlled by James Edward Virtue (“Virtue”). Accordingly, each of Associates, Ultramar and Virtue may be deemed to have beneficial ownership of the shares held by our sponsor. Each of Associates, Ultramar and Virtue disclaims beneficial ownership of any shares except to the extent of their pecuniary interest therein. |
(7) | Does not include any shares indirectly owned by this individual as a result of the individual’s membership interest in our sponsor. Each of these individuals disclaims beneficial ownership of any shares except to the extent of their pecuniary interest therein. |
(a) | The following documents are filed as part of this Amendment No. 2 to the Annual Report on Form 10-K: |
(1) | Financial Statements: |
Page |
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Report of Independent Registered Public Accounting Firm |
F-2 |
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Balance Sheet |
F-3 |
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Statement of Operations |
F-4 |
|||
Statement of Changes in Shareholders’ Equity |
F-5 |
|||
Statement of Cash Flows |
F-6 |
|||
Notes to Financial Statements |
F-7 |
(2) | Financial Statement Schedules: |
(3) | Exhibits |
(1) | Incorporated by reference to our Current Report on Form 8-K filed on October 13, 2020. |
(2) | Incorporated by reference to an exhibit to the Registrant’s Form S-1 (File No. 333-248899), filed with the SEC on September 18, 2020. |
* | Filed herewith. |
** | Furnished herewith. |
*** | Previously filed. |
HOLLEY, INC. (F/K/A EMPOWER LTD.) | ||||||
Date: February 4, 2022 |
By: |
/s/ Thomas W. Tomlinson | ||||
Thomas W. Tomlinson | ||||||
Chief Executive Officer and Principal Executive Officer | ||||||
/s/ Dominic Bardos | ||||||
Dominic Bardos | ||||||
Chief Financial Officer and Principal Financial and Accounting Officer |
Audited Financial Statements of Holley Inc. (F/K/A Empower Ltd.) |
||||
F-2 |
||||
Balance Sheet as of December 31, 2020 (Restated) |
F-3 |
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F-4 |
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F-5 |
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F-6 |
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F-7 – F-7 |
ASSETS |
||||
Current Assets |
||||
Cash |
$ | |||
Prepaid expenses |
||||
|
|
|||
Total Current Assets |
||||
Cash and marketable securities held in trust account |
||||
|
|
|||
Total Assets |
$ |
|||
|
|
|||
LIABILITIES AND SHAREHOLDERS’ DEFICIT |
||||
Current liabilities—accrued expenses |
$ | |||
Warrant liability |
||||
Forward purchase agreement liability |
||||
Deferred underwriting fee payable |
||||
|
|
|||
Total Liabilities |
||||
|
|
|||
Commitments |
||||
Class A ordinary shares subject to possible redemption, |
||||
Shareholders’ Deficit |
||||
Preference shares, $ |
||||
Class A ordinary shares, $ |
||||
Class B ordinary shares, $ |
||||
Additional paid-in capital |
||||
Accumulated deficit |
( |
) | ||
|
|
|||
Total Shareholders’ Deficit |
( |
) | ||
|
|
|||
Total Liabilities and Shareholders’ Deficit |
$ |
|||
|
|
Formation and operating costs |
$ | |||
|
|
|||
Loss from operations |
( |
) | ||
Other income (expenses): |
||||
Interest earned on marketable securities held in trust account |
||||
Unrealized gain on marketable securities held in trust account |
||||
Change in fair value of warrant liability |
( |
) | ||
Change in fair value of forward purchase agreement liability |
( |
) | ||
Transaction costs |
( |
) | ||
|
|
|||
Other expenses, net |
( |
) | ||
|
|
|||
Net loss |
$ |
( |
) | |
|
|
|||
Weighted average Class A ordinary shares outstanding |
||||
|
|
|||
Basic and diluted net loss per Class A ordinary share |
$ | ( |
) | |
|
|
|||
Weighted average Class B ordinary shares outstanding |
||||
|
|
|||
Basic and diluted net loss per Class B ordinary share |
$ |
( |
) | |
|
|
Class B Ordinary Shares |
Additional Paid-in Capital |
Retained Earnings |
Total Shareholders’ Equity |
|||||||||||||||||
Shares |
Amount |
|||||||||||||||||||
Balance – August 19, 2020 (inception) |
$ |
$ |
$ |
$ |
||||||||||||||||
Issuance of Class B ordinary shares to sponsor |
— | |||||||||||||||||||
Sale of |
— | — | — | |||||||||||||||||
Forfeiture of founder shares |
( |
) | ( |
) | — | — | ||||||||||||||
Accretion for Class A ordinary shares subject to possible redemption |
— | — | ( |
) | ( |
) | ( |
) | ||||||||||||
Net loss |
— | — | — | ( |
) | ( |
) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance – December 31, 2020 |
$ |
$ |
$ |
( |
) |
$ |
( |
) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
Cash Flows from Operating Activities: |
||||
Net loss |
$ | ( |
) | |
Adjustments to reconcile net loss to net cash used in operating activities: |
||||
Payment of formation costs through issuance of Class B ordinary shares |
||||
Interest earned on marketable securities held in trust account |
( |
) | ||
Unrealized gain on marketable securities held in trust account |
( |
) | ||
Change in fair value of warrant liability |
||||
Change in fair value of forward purchase agreement liability |
||||
Transaction costs |
||||
Changes in operating assets and liabilities: |
||||
Prepaid expenses |
( |
) | ||
Accrued expenses |
||||
|
|
|||
Net cash used in operating activities |
( |
) | ||
|
|
|||
Cash Flows from Investing Activities: |
||||
Investment of cash in trust account |
( |
) | ||
|
|
|||
Net cash used in investing activities |
( |
) | ||
|
|
|||
Cash Flows from Financing Activities: |
||||
Proceeds from sale of Units, net of underwriting discounts paid |
||||
Proceeds from sale of private placement warrants |
||||
Proceeds from promissory note – related party |
||||
Repayment of promissory note – related party |
( |
) | ||
Payment of offering costs |
( |
) | ||
|
|
|||
Net cash provided by financing activities |
||||
|
|
|||
Net Change in Cash |
||||
Cash – Beginning |
||||
|
|
|||
Cash – Ending |
$ |
|||
|
|
|||
Non-Cash Investing and Financing Activities: |
||||
Offering costs paid by sponsor in exchange for the issuance of Class B ordinary shares |
||||
|
|
|||
Initial classification of Class A ordinary shares subject to possible redemption |
$ | |||
|
|
|||
Change in value of Class A ordinary shares subject to possible redemption |
$ | ( |
) | |
|
|
|||
Deferred underwriting fee payable |
$ | |||
|
|
As Previously Reported in Amendment No. 1 |
Adjustments |
As Restated |
||||||||||
Balance sheet as of October 9, 2020 |
||||||||||||
Warrant liability |
||||||||||||
Forward purchase agreement liability |
||||||||||||
Total Liabilities |
$ | $ | $ | |||||||||
Class A Ordinary Shares Subject to Possible Redemption |
( |
) | ||||||||||
Class A Ordinary Shares |
||||||||||||
Additional Paid-in Capital |
||||||||||||
Accumulated Deficit |
( |
) | ( |
) | ( |
) | ||||||
Total Shareholders’ Equity |
||||||||||||
Number of Class A ordinary shares subject to redemption |
( |
) | ||||||||||
Balance sheet as of December 31, 2020 |
||||||||||||
Warrant liability |
||||||||||||
Forward purchase agreement liability |
||||||||||||
Total Liabilities |
$ | $ | $ | |||||||||
Ordinary Shares Subject to Possible Redemption |
( |
) | ||||||||||
Class A Ordinary Shares |
||||||||||||
Additional Paid-in Capital |
||||||||||||
Accumulated Deficit |
( |
) | ( |
) | ( |
) | ||||||
Shareholders’ Equity |
( |
) | ||||||||||
Number of Class A ordinary shares subject to redemption |
( |
) | ||||||||||
Statement of Operations |
||||||||||||
Period from August 19, 2020 (inception) to December 31, 2020 |
||||||||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Weighted average shares subject to possible redemption |
( |
) | ||||||||||
Weighted average shares outstanding of basic and diluted shares |
||||||||||||
Basic and diluted net loss per ordinary share |
( |
) | ( |
) | ||||||||
Cash Flow Statement for the Period from August 19, 2020 (inception) to December 31, 2020 |
||||||||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Change in warrant liability |
||||||||||||
Allocation of initial public offering costs |
||||||||||||
Initial classification of warrant liability |
||||||||||||
Initial classification of common stock subject to possible redemption |
( |
) | ||||||||||
Change in value of common stock subject to possible redemption |
( |
) | ( |
) | ( |
) |
As Previously Reported in Amendment No. 1 |
Adjustment |
As Restated |
||||||||||
Balance Sheet as of October 9, 2020 |
||||||||||||
Ordinary shares subject to possible redemption |
$ | $ | $ | |||||||||
Ordinary shares |
$ | $ | ( |
) | $ | |||||||
Additional paid-in capital |
$ | $ | ( |
) | $ | |||||||
Accumulated deficit |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Total Shareholders’ Equity (Deficit) |
$ | $ | ( |
) | $ | ( |
) | |||||
Balance Sheet as of December 31, 2020 |
||||||||||||
Ordinary shares subject to possible redemption |
$ | $ | $ | |||||||||
Ordinary shares |
$ | $ | ( |
) | $ | |||||||
Additional paid-in capital |
$ | $ | ( |
) | $ | |||||||
Accumulated deficit |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Total Shareholders’ Equity (Deficit) |
$ | $ | ( |
) | $ | ( |
) | |||||
Statement of Operations for the Period from August 19, 2020 (Inception) Through December 31, 2020 |
||||||||||||
Weighted average Class A ordinary shares outstanding |
( |
) | ||||||||||
Basic and diluted net loss per Class A ordinary share |
$ | $ | ( |
) | $ | ( |
) | |||||
Weighted average Class B ordinary shares outstanding |
( |
) | ||||||||||
Basic and diluted net loss per Class B ordinary share |
$ | ( |
) | $ | $ | ( |
) |
As Previously Reported in Amendment No. 1 |
Adjustment |
As Restated |
||||||||||
Statement of Changes in Shareholders’ Equity (Deficit) for the Period from August 19, 2020 (inception) through December 31, 2020 |
||||||||||||
Sale of 25,00,000 Units, net of underwriter discounts and offering expenses |
$ | $ | ( |
) | $ | |||||||
Initial value of Class A Ordinary Shares subject to redemption |
$ | ( |
) | $ | $ | |||||||
Accretion for Class A Ordinary Shares to redemption amount |
$ | $ | ( |
) | $ | ( |
) | |||||
Total Shareholders’ Equity (Deficit) |
$ | $ | ( |
) | $ | ( |
) | |||||
Statement of Cash Flows for the Period from August 19, 2020 (inception) through December 31, 2020 |
||||||||||||
Initial classification of Ordinary shares subject to possible redemption |
$ | $ | $ | |||||||||
Change in value of ordinary shares subject to possible redemption |
$ | ( |
) | $ | $ |
Gross proceeds |
$ | |||
Less: |
||||
Proceeds allocated to Public Warrants |
$ | ( |
) | |
Class A ordinary share issuance costs |
$ | ( |
) | |
Plus: |
||||
Accretion of carrying value to redemption value |
$ | |||
|
|
|||
Class A ordinary share subject to possible redemption |
$ | |||
|
|
Year ended December 31, 2020 |
||||
Common stock subject to possible redemption |
||||
Numerator: Earnings allocable to Common stock subject to possible redemption Interest earned on marketable securities held in Trust Account |
$ | |||
Less: Income taxes and franchise fees |
||||
Net income allocable to shares subject to possible redemption |
$ | |||
Denominator: Weighted Average Common stock subject to possible redemption Basic and diluted weighted average shares outstanding |
||||
Basic and diluted net income per share |
$ | |||
Non-Redeemable Common Stock |
||||
Numerator: Net Loss minus Net Earnings Net loss |
$ | ( |
) |
Year ended December 31, 2020 |
||||
Net earnings allocable to Common stock subject to possible redemption |
||||
Non-Redeemable Net Loss Denominator: Weighted Average Non-Redeemable Common Stock |
$ |
( |
) | |
Basic and weighted average shares outstanding |
||||
Basic and diluted net loss per share |
$ | ( |
) | |
For the Period from August 19, 2020 (Inception) Through December 31, 2020 |
||||||||
Class A | Class B | |||||||
Basic and diluted net loss per ordinary share |
||||||||
Numerator: |
||||||||
Allocation of net loss, as adjusted |
$ | ( |
) | $ | ( |
) | ||
Denominator: |
||||||||
Basic and diluted weighted average shares outstanding |
||||||||
Basic and diluted net loss per ordinary share |
$ | ( |
) | $ | ( |
) |
• | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
• | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
• | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
• | in whole and not in part; |
• | at a price of $0.01 per public warrant; |
• | upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and |
• | if, and only if, the closing price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like), for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. |
• | in whole and not in part; |
• | at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares based on the redemption date and the fair market value of the Class A ordinary shares; and |
• | if, and only if, the closing price of the Class A ordinary shares equals or exceeds $10.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) on the trading day prior to the date on which the Company send the notice of redemption to warrant holders. |
Level 1: |
Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. | |
Level 2: |
Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. | |
Level 3: |
Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability. |
Description |
Level |
December 31, 2020 |
||||||
Assets: |
||||||||
Cash and marketable securities held in trust account |
1 | $ | ||||||
Liabilities: |
||||||||
Warrant liability – public warrants |
1 | |||||||
Warrant liability – private placement warrants |
3 | |||||||
Forward purchase agreement liability |
3 |
Private Placement |
Public |
Warrant Liabilities |
||||||||||
Fair value as of August 19, 2020 |
$ | $ | $ | |||||||||
Initial measurement on October 9, 2020 |
||||||||||||
Change in valuation inputs or other assumptions |
||||||||||||
Fair value as of December 31, 2020 |
$ | $ | $ | |||||||||
FPA Liability |
||||
Fair value, October 6, 2020 |
$ | |||
Recognized loss on change in fair value (1) |
||||
Fair value, December 31, 2020 |
$ | |||
(1) | Represents the non-cash loss on change in valuation of the FPA liability and is included in Recognized loss on change in fair value of FPA liability on the statement of operations. |
Input |
October 9, 2020 |
December 31, 2020 |
||||||
Risk-free interest rate |
% | % | ||||||
Trading days per year |
||||||||
Expected volatility |
% | % | ||||||
Exercise price |
$ | $ | ||||||
Stock price |
$ | $ |