Delaware |
7990 |
86-3355184 | ||
(State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(IRS Employer Identification Number) |
Bradley C. Faris Owen J.D. Alexander Scott W. Westhoff Latham & Watkins LLP 330 N. Wabash Avenue, Suite 2800 Chicago, Illinois 60611 Tel: (312) 876-7700 |
Christian O. Nagler Wayne E. Williams Kirkland & Ellis LLP 601 Lexington Avenue New York, New York 10022 Tel: (212) 446-4800 |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
☒ | Smaller reporting company | |||||
Emerging growth company |
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ii | ||||
iv | ||||
1 | ||||
9 | ||||
36 | ||||
46 | ||||
54 | ||||
61 | ||||
84 | ||||
91 | ||||
100 | ||||
111 | ||||
119 | ||||
123 | ||||
126 | ||||
126 | ||||
126 | ||||
F-1 |
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A-1 | ||||
II-1 |
• | the COVID-19 pandemic, its duration, its impact on our business, results of operations, financial condition, liquidity, use of our borrowings, business practices, operations, suppliers, third-party service providers, customers, employees, industry, ability to meet future performance obligations and ability to efficiently implement advisable safety precautions; |
• | our ability to raise financing in the future; |
• | our future financial performance; |
• | our success in retaining or recruiting, or changes required in, our officers, key employees or directors; |
• | our ability to pay dividends on our Class A Common Stock on the terms currently contemplated or at all; and |
• | other factors relating to our business, operations and financial performance, including, but not limited to: |
• | our ability to compete in the ticketing industry; |
• | our ability to maintain relationships with buyers, sellers and distribution partners; |
• | our ability to continue to improve our platform and maintain and enhance our brand; |
• | the impact of extraordinary events or adverse economic conditions on discretionary consumer and corporate spending or on the supply and demand of live events; |
• | our ability to comply with domestic regulatory regimes; |
• | our ability to successfully defend against litigation; |
• | our ability to maintain the integrity of our information systems and infrastructure, and to mitigate possible cyber security risks; |
• | our ability to generate sufficient cash flows or raise additional capital necessary to fund our operations; and |
• | other factors detailed in the section entitled “Risk Factors.” |
The Company |
We are an online ticket marketplace that utilizes our technology platform to connect fans of live events seamlessly with ticket sellers. Our mission is to empower and enable fans to Experience It Live easy-to-use, |
Corporate Contact Information |
We are headquartered in Chicago, Illinois. Our principal executive offices are located at 111 N. Canal Street, Suite 800, Chicago, Illinois 60606, and our telephone number is (312) 291-9966. We maintain a website at www.vividseats.com |
Warrants that qualify for the Offer |
As of May 23, 2022, we had outstanding an aggregate of 18,132,766 public warrants. Pursuant to the Offer, we are offering up to an aggregate of 4,351,864 shares of our Class A Common Stock in exchange for all of our outstanding public warrants. |
Under the Amended and Restated Warrant Agreement, we may call the public warrants for redemption at our option: |
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon a minimum of 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrant holder; and |
• | if, and only if, the closing price of our Class A Common Stock equals or exceeds $18.00 per share (as adjusted for share splits, share dividends, 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 we send the notice of redemption to the warrant holders, provided that there is an effective registration statement covering the shares of Class A Common Stock issuable upon exercise of the public warrants, and a current prospectus relating thereto, available throughout the 30-day redemption period. |
Market Price of Our Common Stock |
Our Class A Common Stock and public warrants are listed on Nasdaq under the symbols “SEAT” and “SEATW,” respectively. See “Market Information, Dividends and Related Stockholder Matters.” |
The Offer |
Each warrant holder who tenders public warrants for exchange pursuant to the Offer will receive 0.240 shares of our Class A Common Stock for each public warrant so exchanged. No fractional shares of Class A Common Stock will be issued pursuant to the Offer. In lieu of issuing fractional shares, any holder of public warrants who would otherwise have been entitled to receive fractional shares pursuant to the Offer will, after aggregating all such fractional shares of such holder, be paid cash (without interest) in an amount equal to such fractional part of a share multiplied by the last sale price of our Class A Common Stock on Nasdaq on the last trading day of the Offer Period. Our obligation to complete the Offer is not conditioned on the receipt of a minimum number of tendered warrants. |
Holders of the public warrants tendered for exchange will not have to pay any of the exercise price for the tendered public warrants in order to receive shares of Class A Common Stock in the exchange. |
The shares of Class A Common Stock issued in exchange for the tendered public warrants will be unrestricted and freely transferable, as long as the holder is not an affiliate of ours and was not an affiliate of ours within the three months prior to the proposed transfer of such shares. |
The Offer is being made to all public warrant holders except those holders who reside in states or other jurisdictions where an offer, solicitation or sale would be unlawful (or would require further action in order to comply with applicable securities laws). |
The Consent Solicitation |
In order to tender public warrants in the Offer and Consent Solicitation, holders are required to consent (by executing the Letters |
of Transmittal and Consent or requesting that their broker or nominee consent on their behalf) to an amendment to the Amended and Restated Warrant Agreement governing the public warrants as set forth in the Warrant Amendment attached as Annex A. If approved, the Warrant Amendment would permit the Company to require that all public warrants that are outstanding upon the closing of the Offer be converted into shares of Class A Common Stock at a ratio of 0.213 shares of Class A Common Stock per public warrant (a ratio which is 12.7% less than the exchange ratio applicable to the Offer). Upon such conversion, no public warrants will remain outstanding. |
Purpose of the Offer and Consent Solicitation |
The purpose of the Offer and Consent Solicitation is to attempt to simplify our capital structure and reduce the potential dilutive impact of the public warrants, thereby providing us with more flexibility for financing our operations in the future. See “The Offer and Consent Solicitation—Background and Purpose of the Offer and Consent Solicitation.” |
Offer Period |
The Offer and Consent Solicitation will expire on the Expiration Date, which is 11:59 p.m., Eastern Daylight Time, on June 29, 2022, or such later time and date to which we may extend. All public warrants tendered for exchange pursuant to the Offer and Consent Solicitation, and all required related paperwork, must be received by the exchange agent by the Expiration Date, as described in this Prospectus/Offer to Exchange. |
If the Offer Period is extended, we will make a public announcement of such extension by no later than 9:00 a.m., Eastern Daylight Time, on the next business day following the Expiration Date as in effect immediately prior to such extension. |
We may withdraw the Offer and Consent Solicitation only if the conditions of the Offer and Consent Solicitation are not satisfied or waived prior to the Expiration Date. Promptly upon any such withdrawal, we will return the tendered warrants (and the related consent to the Warrant Amendment will be revoked). We will announce our decision to withdraw the Offer and Consent Solicitation by disseminating notice by public announcement or otherwise as permitted by applicable law. See “The Offer and Consent Solicitation—General Terms—Offer Period.” |
Amendments to the Offer and Consent Solicitation |
We reserve the right at any time or from time to time to amend the Offer and Consent Solicitation, including by increasing or (if the conditions to the Offer are not satisfied) decreasing the exchange ratio of Class A Common Stock issued for every public warrant exchanged or by changing the terms of the Warrant Amendment. If we make a material change in the terms of the Offer and Consent Solicitation or the information concerning the Offer and Consent Solicitation, or if |
we waive a material condition of the Offer and Consent Solicitation, we will extend the Offer and Consent Solicitation to the extent required by Rules 13e-4(d)(2) and 13e-4(e)(3) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). See “The Offer and Consent Solicitation—General Terms—Amendments to the Offer and Consent Solicitation.” |
Conditions to the Offer and Consent Solicitation |
The Offer is subject to customary conditions, including the effectiveness of the registration statement of which this Prospectus/Offer to Exchange forms a part and the absence of any action or proceeding, statute, rule, regulation or order that would challenge or restrict the making or completion of the Offer. The Offer is not conditioned upon the receipt of a minimum number of tendered public warrants. However, the Consent Solicitation is conditioned upon receiving the consent of holders of at least 65% of the outstanding public warrants (which is the minimum number required to amend the Amended and Restated Warrant Agreement). We may waive some of the conditions to the Offer. See “The Offer and Consent Solicitation—General Terms—Conditions to the Offer and Consent Solicitation.” |
We will not complete the Offer and Consent Solicitation unless and until the registration statement described above is effective. If the registration statement is not effective at the Expiration Date, we may, in our discretion, extend, suspend or cancel the Offer and Consent Solicitation, and will inform public warrant holders of such event. |
Withdrawal Rights |
If you tender your public warrants for exchange and change your mind, you may withdraw your tendered public warrants (and thereby automatically revoke the related consent to the Warrant Amendment) at any time prior to the Expiration Date, as described in greater detail in the section titled “The Offer and Consent Solicitation—Withdrawal Rights.” If the Offer Period is extended, you may withdraw your tendered public warrants (and thereby automatically revoke the related consent to the Warrant Amendment) at any time until the extended Expiration Date. In addition, tendered public warrants that are not accepted by us for exchange by July 28, 2022 may thereafter be withdrawn by you until such time as the public warrants are accepted by us for exchange. |
Federal and State Regulatory Approvals |
Other than compliance with the applicable federal and state securities laws, no federal or state regulatory requirements must be complied with and no federal or state regulatory approvals must be obtained in connection with the Offer and Consent Solicitation. |
Absence of Appraisal or Dissenters’ Rights |
Holders of our public warrants do not have any appraisal or dissenters’ rights under applicable law in connection with the Offer and Consent Solicitation. |
U.S. Federal Income Tax Consequences of the Offer |
For those holders of our public warrants participating in the Offer and for any holders of our public warrants subsequently exchanged for Class A Common Stock pursuant to the terms of the Warrant Amendment, we intend, and each holder agrees pursuant to the Letter of Transmittal and Warrant Amendment, as applicable, to treat the exchange of public warrants for our Class A Common Stock as a “recapitalization” within the meaning of Section 368(a)(1)(E) of the Internal Revenue Code of 1986, as amended (the “Code”). Under such treatment, (i) you should not recognize any gain or loss on the exchange of public warrants for shares of Class A Common Stock (except to the extent of any cash payment received in lieu of a fractional share in connection with the Offer or such subsequent exchange), (ii) your aggregate tax basis in our Class A Common Stock received in the exchange should equal your aggregate tax basis in your public warrants surrendered in the exchange (except to the extent of any tax basis allocated to a fractional share for which a cash payment is received in connection with the Offer or such subsequent exchange), and (iii) your holding period for our Class A Common Stock received in the exchange should include your holding period for the surrendered public warrants. However, because there is a lack of direct legal authority regarding the U.S. federal income tax consequences of the exchange of our public warrants for our Class A Common Stock, there can be no assurance in this regard and alternative characterizations are possible by the U.S. Internal Revenue Service (“IRS”) or a court, including ones that would require U.S. Holders (as defined under “Market Information, Dividends and Related Stockholder Matters—Material U.S. Federal Income Tax Consequences—U.S. Holders”) to recognize taxable income. |
If the Warrant Amendment is approved, we intend, and each applicable holder agrees pursuant to the Warrant Amendment, to treat all public warrants not exchanged for Class A Common Stock in the Offer as having been exchanged for “new” public warrants pursuant to the Warrant Amendment and to treat such deemed exchange as a “recapitalization” within the meaning of Section 368(a)(1)(E) of the Code. Under such treatment, (i) you should not recognize any gain or loss on the deemed exchange of public warrants for “new” public warrants, (ii) your aggregate tax basis in the “new” public warrants deemed to be received in the exchange should equal your aggregate tax basis in your existing public warrants deemed surrendered in the exchange, and (iii) your holding period for the “new” public warrants deemed to be received in the exchange should include your holding period for the public warrants deemed surrendered. Because there is a lack of direct legal authority regarding the U.S. federal income tax consequences of a deemed exchange of public warrants for “new” public warrants pursuant to the Warrant Amendment, there can be no assurance in this regard and alternative characterizations by the IRS or a court are possible, including ones that would require U.S. Holders to recognize taxable income. See “Market Information, |
Dividends and Related Stockholder Matters—Material U.S. Federal Income Tax Consequences.” |
No Recommendation |
Neither we nor any of our Board of Directors, our management, the dealer manager, the exchange agent, the information agent or any other person makes any recommendation on whether you should tender or refrain from tendering all or any portion of your public warrants or consent to the Warrant Amendment, and no one has been authorized by any of them to make such a recommendation. |
Risk Factors |
For risks related to the Offer and Consent Solicitation, please read the section titled “Risk Factors” beginning on page 9 of this Prospectus/Offer to Exchange. |
Exchange Agent |
The depositary and exchange agent for the Offer and Consent Solicitation is: |
Continental Stock Transfer & Trust Company |
Dealer Manager |
The dealer manager for the Offer and Consent Solicitation is: |
Evercore Group L.L.C. |
55 East 52 nd Street, 35th Floor |
New York, New York 10055 |
Toll-Free: (888) 474-0200 |
We have other business relationships with the dealer manager, as described in “The Offer and Consent Solicitation—Dealer Manager.” |
Additional Information |
We recommend that our public warrant holders review the registration statement on Form S-4, of which this Prospectus/Offer to Exchange forms a part, including the exhibits that we have filed with the SEC in connection with the Offer and Consent Solicitation and our other materials that we have filed with the SEC, before making a decision on whether to tender for exchange in the Offer and consent to the Warrant Amendment. All reports and other documents we have filed with the SEC can be accessed electronically on the SEC’s website at www.sec.gov |
• | The COVID-19 pandemic has had, and may continue to have, a material negative impact on our business and operating results. |
• | Our business is dependent on the continued occurrence of large-scale sporting events, concerts and theater shows and on relationships with buyers, sellers and distribution partners and any change in such occurrence or relationships could adversely affect our business. |
• | Changes in Internet search engine algorithms or changes in marketplace rules could have a negative impact on traffic for our sites and ultimately, our business and results of operations. |
• | We face intense competition in the ticketing industry. |
• | If we do not continue to maintain and improve our platform or develop successful new solutions and enhancements, or improve existing ones, our business will suffer. |
• | We may be adversely affected by the occurrence of extraordinary events. |
• | We may be unsuccessful in potential future acquisitions. |
• | Due to our business’ seasonality, our financial performance in particular financial periods may not be indicative of, or comparable to, our financial performance in subsequent financial periods. |
• | The processing, storage, use and disclosure of personal data could give rise to liabilities as a result of governmental regulation, conflicting legal requirements or applications of privacy regulations. |
• | Unfavorable legislative outcomes, or outcomes in legal proceedings in which we may be involved may adversely affect our business and operating results. |
• | Risks related to information technology, cybersecurity and intellectual property. |
• | System interruption and the lack of integration and redundancy in our systems and infrastructure may have an adverse impact on our business, financial condition and results of operations. |
• | Cyber security risks, data loss or other breaches of our network security could materially harm our business and results of operations. |
• | Our payments system depends on third-party providers. |
• | The agreements governing our indebtedness impose restrictions on us that limit the discretion of management in operating our business. |
• | We depend on the cash flows of our subsidiaries in order to satisfy our obligations, and we may face liquidity constraints if we are unable to generate sufficient cash flows and we may be unable to raise the additional capital when necessary or desirable. |
• | Our Private Equity Owner controls us, and its interest may conflict with ours in the future. |
• | We are a “controlled company” within the meaning of the Nasdaq listing standards. |
• | Our Tax Receivable Agreement requires us to make cash payments to Hoya Topco. |
• | Our only material asset is our direct and indirect interests in Hoya Intermediate. |
• | We have identified a material weakness in our internal control over financial reporting. |
• | We are an emerging growth company. |
• | A significant portion of our total outstanding shares of our Class A Common Stock are restricted from resale but may be sold into the market in the future, which could cause the market price of our Class A Common Stock to drop significantly. |
• | Warrants will become exercisable for our Class A Common Stock, which may increase the number of shares eligible for resale in the market and result in dilution to our stockholders. |
• | the impact of any lingering economic downturn or recession including, without limitation, any reduction in discretionary spending or confidence for both buyers and sellers, that would result in a decline in ticket sales and attendance; |
• | a reduction in the profitability of our operations due to governmental restrictions or safety precautions and protocols voluntarily undertaken, such as venues running under capacity due to spacing and social distancing limitations, which could limit the number of tickets sold; |
• | decreased willingness or ability for artists to tour due to varying restrictions across jurisdictions, including the possibility that national or sub-national borders are closed to travel, which could reduce the demand for our services; |
• | changes to consumer preferences for consumption of live music, sporting or theater events due to fear of, or restrictions on, large gatherings; |
• | loss of ticketing sales due to the economic impact whereby certain venue operators are no longer in operation, reducing the number of events our marketplace can serve; |
• | the inability to pursue expansion opportunities or acquisitions due to capital constraints; |
• | the future availability or increased cost of insurance coverage; and |
• | the incurrence of additional expenses related to compliance, precautions and management. |
• | competitors’ offerings that may include more favorable terms or pricing; |
• | technological changes and innovations that we are unable to adopt or are late in adopting that offer more attractive alternatives; |
• | other entertainment options or ticket inventory selection and variety that we do not offer; and |
• | increased pricing in the primary ticket marketplace, which could result in reduced profits for secondary ticket sellers. |
• | using a significant portion of our available cash; |
• | issuing equity securities, which would dilute current stockholders’ percentage ownership; |
• | incurring substantial debt; |
• | incurring or assuming contingent liabilities, known or unknown; and |
• | incurring large accounting write-offs, impairments or amortization expenses. |
• | integrating the operations, financial reporting, technologies and personnel of acquired companies; |
• | scaling of operations, system and infrastructure and achieving synergies to meet the needs of the combined or acquired company; |
• | managing geographically dispersed operations; |
• | the diversion of management’s attention from other business concerns; |
• | the inherent risks in entering markets or lines of business in which we have either limited or no direct experience; |
• | the potential loss of key employees, customers and strategic partners of acquired companies; and |
• | the impact of laws and regulations at the state, federal and international levels when entering new markets or business, which could significantly affect our ability to complete acquisitions and expand our business. |
• | incur additional debt; |
• | pay dividends and make distributions; |
• | make certain investments; |
• | prepay certain indebtedness; |
• | create liens; |
• | enter into transactions with affiliates; |
• | modify the nature of our business; |
• | transfer and sell assets, including material intellectual property; |
• | amend our organizational documents; and |
• | merge or consolidate. |
• | making it more difficult for us to satisfy our obligations; |
• | increasing our vulnerability to adverse economic, regulatory and industry conditions; |
• | limiting our ability to obtain additional financing for future working capital, capital expenditures, acquisitions and other purposes; |
• | requiring us to dedicate a substantial portion of our cash flow from operations to fund payments on our debt, thereby reducing funds available for operations and other purposes; |
• | limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; |
• | making us more vulnerable to increases in interest rates; and |
• | placing us at a competitive disadvantage compared to our competitors that have less debt. |
• | general economic and capital market conditions, including as a result of the COVID-19 pandemic and rising inflation; |
• | the availability of credit from banks or other lenders; |
• | investor confidence in us; and |
• | our results of operations. |
• | develop and enhance our platform and solutions; |
• | continue to invest in our technology and marketing efforts; |
• | hire, train and retain employees; |
• | respond to competitive pressures or unanticipated working capital requirements; or |
• | pursue acquisition opportunities. |
• | existing tax basis in certain assets of Hoya Intermediate and certain of its subsidiaries, including assets that will be subject to depreciation or amortization, once placed in service; |
• | tax basis adjustments resulting from taxable exchanges of Intermediate Common Units (including any such adjustments resulting from certain payments made by us under the Tax Receivable Agreement) for Class A Common Stock acquired by us from a TRA Holder pursuant to the terms of the Second A&R LLCA; |
• | certain tax attributes of Blocker Corporations holding Intermediate Common Units that are acquired by us pursuant to a Reorganization Transaction; |
• | certain tax benefits realized by us as a result of certain U.S. federal income tax allocations of taxable income or gain away from us and to other members of Hoya Intermediate and deductions or losses to us and away from other members of Hoya Intermediate, in each case, as a result of the Business Combination; and |
• | tax deductions in respect of portions of certain payments made under the Tax Receivable Agreement. |
• | the realization of any of these risk factors; |
• | difficult global market and economic conditions; |
• | loss of investor confidence in the global financial markets and investing in general; |
• | adverse market reaction to indebtedness we may incur, securities we may grant under our 2021 Incentive Award Plan (the “2021 Plan”) or otherwise, or any other securities we may issue in the future, including shares of our Class A Common Stock; |
• | unanticipated variations in our quarterly and annual operating results or dividends; |
• | failure to meet securities analysts’ earnings estimates; |
• | publication of negative or inaccurate research reports about us or the live events or ticketing industry or the failure of securities analysts to provide adequate coverage of our Class A Common Stock in the future; |
• | changes in market valuations of similar companies; |
• | speculation in the press or investment community about our business; |
• | additional or unexpected changes or proposed changes in laws or regulations or differing interpretations thereof affecting our business or enforcement of these laws and regulations, or announcements relating to these matters; and |
• | increases in compliance or enforcement inquiries and investigations by regulatory authorities. |
• | not being required to have our independent registered public accounting firm audit our internal control over financial reporting under Section 404 of SOX; |
• | reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and |
• | exemptions from the requirements of holding a nonbinding advisory vote on executive compensation or golden parachute payments not previously approved. |
• | Our status as an “emerging growth company” will end as soon as any of the following occurs: |
• | the last day of the fiscal year in which we have more than $1.07 billion in annual revenue; |
• | the date we qualify as a “large accelerated filer,” with at least $700 million of equity securities held by non-affiliates; |
• | the date on which we have issued, in any three-year period, more than $1.0 billion in non-convertible debt securities; or |
• | December 31, 2026. |
• | private warrants to purchase 6,519,791 shares at an exercise price of $11.50 per share; |
• | warrants to purchase 17,000,000 shares at an exercise price of $10.00 per share; and |
• | warrants to purchase 17,000,000 shares at an exercise price of $15.00 per share. |
• | the sole ability of directors to fill a vacancy on the Board of Directors; |
• | advance notice requirements for stockholder proposals and director nominations; |
• | after we no longer qualify as a “controlled company” under applicable Nasdaq listing rules, provisions limiting stockholders’ ability to (i) call special meetings of stockholders, (ii) require extraordinary general meetings of stockholders and (iii) take action by written consent; |
• | the ability of the Board of Directors to designate the terms of and issue new series of preferred stock without stockholder approval, which could be used, among other things, to institute a rights plan that would have the effect of significantly diluting the stock ownership of a potential hostile acquirer, likely preventing acquisitions that have not been approved by our governing body; |
• | the division of the Board of Directors into three classes, with each class serving staggered three-year terms; and |
• | the lack of cumulative voting for the election of directors. |
• | the registration statement, of which this Prospectus/Offer to Exchange forms a part, shall have become effective under the Securities Act, and shall not be the subject of any stop order or proceeding seeking a stop order; |
• | no action or proceeding by any government or governmental, regulatory or administrative agency, authority or tribunal or any other person, domestic or foreign, shall have been threatened, instituted or pending before any court, authority, agency or tribunal that directly or indirectly challenges the making of the Offer, the tender of some or all of the public warrants pursuant to the Offer or otherwise relates in any manner to the Offer; |
• | there shall not have been any action threatened, instituted, pending or taken, or approval withheld, or any statute, rule, regulation, judgment, order or injunction threatened, proposed, sought, promulgated, enacted, entered, amended, enforced or deemed to be applicable to the Offer or Consent Solicitation or us, by any court or any authority, agency or tribunal that, in our reasonable judgment, would or might, directly or indirectly, (i) make the acceptance for exchange of, or exchange for, some or all of the public warrants illegal or otherwise restrict or prohibit completion of the Offer or Consent Solicitation, or (ii) delay or restrict our ability, or render us unable, to accept for exchange or exchange some or all of the public warrants; and |
• | there shall not have occurred (i) any general suspension of, or limitation on prices for, trading in securities in U.S. securities or financial markets; (ii) a declaration of a banking moratorium or any suspension of payments in respect to banks in the United States; (iii) any limitation (whether or not mandatory) by any government or governmental, regulatory or administrative authority, agency or |
instrumentality, domestic or foreign, or other event that, in our reasonable judgment, would or would be reasonably likely to affect the extension of credit by banks or other lending institutions; or (iv) a natural disaster, a significant worsening of the ongoing COVID-19 pandemic, an outbreak of a pandemic or contagious disease other than COVID-19, or a commencement or significant worsening of a war or armed hostilities or other national or international calamity, including but not limited to, catastrophic terrorist attacks against the United States or its citizens, which, in our reasonable judgment, is or may be materially adverse to us or otherwise makes it inadvisable for us to proceed with the Offer and Consent Solicitation. |
• | the tender is made by or through an Eligible Institution; |
• | the exchange agent receives by hand, mail, overnight courier, facsimile or electronic mail transmission, prior to the Expiration Date, a properly completed and duly executed Notice of Guaranteed Delivery in the form we have provided with this Prospectus/Offer to Exchange, with signatures guaranteed by an Eligible Institution; and |
• | a confirmation of a book-entry transfer into the exchange agent’s account at DTC of all public warrants delivered electronically, together with a properly completed and duly executed Letter of Transmittal and Consent with any required signature guarantees (or, in the case of a book-entry transfer, an Agent’s Message in accordance with ATOP), and any other documents required by the Letter of Transmittal and Consent, must be received by the exchange agent within two days that Nasdaq is open for trading after the date the exchange agent receives such Notice of Guaranteed Delivery. |
• | Sports. |
• | Concerts. |
• | Theater. off-Broadway plays and musicals, family entertainment events, comedy acts, and speaker series. |
• | Content Rights Holders (“CRH”) |
• | Media Partners |
• | Product and Service Partners |
• | Distribution Partners |
• | We Create Exceptional Experiences. |
• | We Raise the Bar. |
• | We Commit as a Team. |
• | We Embrace Change. |
• | We Enhance Communities. |
• | We are proud to partner with Chicago’s Lurie Children’s Hospital, one of the country’s top-ranked pediatric institutions, by bringing joy to patients and their families. Our employees have recorded bedtime stories, donated wish list gifts and hosted patients and their families at live events. |
• | Starting in 2020, the live entertainment industry was severely impacted by the global COVID-19 pandemic. This resulted in thousands of people having an uncertain future. We, and our customers, have donated millions of dollars to the Recording Academy’s charity, MusiCares, to support those in the music community and their families. |
• | availability and variety of ticket offerings; |
• | pricing, including pricing in the primary ticket market; |
• | brand recognition; and |
• | technology, including functionality and ease of use to search for offerings and complete a purchase. |
• | wide selection of listings and ticketing options; |
• | competitive pricing; |
• | Vivid Seats Rewards, the most comprehensive loyalty program among our key competitors; |
• | full-service marketplace with excellent customer service; and |
• | free-to-use |
• | privacy, |
• | data protection, |
• | intellectual property, |
• | competition, |
• | consumer protection, |
• | ticketing, |
• | payments, |
• | export taxation, and |
• | sports gaming. |
Vivid Seats Inc. (Historical) |
Transaction Accounting Adjustments |
Pro Forma Statement of Operations |
||||||||||||||||||
Revenues |
$ |
443,038 |
|
$ | — | $ | 443,038 | |||||||||||||
Cost of revenues (exclusive of depreciation and amortization shown separately below) |
90,617 | — | 90,617 | |||||||||||||||||
Marketing and selling |
181,358 | — | 181,358 | |||||||||||||||||
General and administrative |
92,170 | 2,500 | (c | ) | 94,670 | |||||||||||||||
Depreciation and amortization |
2,322 | — | 2,322 | |||||||||||||||||
|
|
|
|
|
|
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Income from operations |
76,571 | (2,500 | ) | 74,071 | ||||||||||||||||
Interest expense - net |
58,179 | (47,093 | ) | (b | ) | 11,086 | ||||||||||||||
Loss on extinguishment of debt |
35,828 | 19,903 | (b | ) | 55,731 | |||||||||||||||
Other expenses (income) |
1,389 | (5,794 | ) | (a | ) | (4,405 | ) | |||||||||||||
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|
|
|
|
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Net (loss) income before income taxes |
(18,825 | ) | 30,484 | 11,659 | ||||||||||||||||
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|
|
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Income taxes |
304 | — | (d | ) | 304 | |||||||||||||||
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|||||||||||||||
Net (loss) income |
(19,129 | ) | 30,484 | 11,355 | ||||||||||||||||
Net loss attributable to Hoya Intermediate, LLC shareholders prior to reverse recapitalization |
(12,836 | ) | 12,836 | (e | ) | — | ||||||||||||||
Net (loss) income attributable to redeemable noncontrolling interests |
(3,010 | ) | 10,656 | (e | ) | 7,646 | ||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Net (loss) income attributable to Class A Common Stockholders |
$ | (3,283) | $ | 6,992 | (e | ) | $ | 3,709 | ||||||||||||
|
|
|
|
|
|
|||||||||||||||
Net (loss) income per Class A Common Stock |
Assuming No Public Warrant Exchanges |
|||||||||||||||||||
Basic |
$ | (0.04 | ) | $ | 0.05 | (f | ) | |||||||||||||
Diluted |
$ | (0.04 | ) | $ | 0.05 | (f | ) | |||||||||||||
Assuming Exchange of All Public Warrants |
||||||||||||||||||||
Basic |
$ | 0.03 | (f | ) | ||||||||||||||||
Diluted |
$ | 0.03 | (f | ) |
Vivid Seats Inc. (Historical) |
Transaction Accounting Adjustments |
Pro Forma Statement of Operations |
||||||||||||||||||
Revenues |
$ |
130,772 |
|
$ | — | $ |
130,772 |
|
||||||||||||
Cost of revenues (exclusive of depreciation and amortization shown separately below) |
32,164 | — | 32,164 | |||||||||||||||||
Marketing and selling |
54,228 | — | 54,228 | |||||||||||||||||
General and administrative |
29,275 | — | 29,275 | |||||||||||||||||
Depreciation and amortization |
1,385 | — | 1,385 | |||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Income from operations |
13,720 | — | 13,720 | |||||||||||||||||
Interest expense - net |
3,942 | (1,229 | ) | (b | ) | 2,713 | ||||||||||||||
Loss on extinguishment of debt |
4,285 | (4,285 | ) | (b | ) | — | ||||||||||||||
Other expenses |
2,279 | — | 2,279 | |||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Net income before income taxes |
3,214 | 5,514 | 8,728 | |||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Income taxes |
76 | — | (d | ) | 76 | |||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Net income |
3,138 | 5,514 | 8,652 | |||||||||||||||||
Net income attributable to Hoya Intermediate, LLC shareholders prior to reverse recapitalization |
— | — | (e | ) | — | |||||||||||||||
Net income attributable to redeemable noncontrolling interests |
1,879 | 3,407 | (e | ) | 5,286 | |||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Net income attributable to Class A Common Stockholders |
$ | 1,259 | $ | 2,107 | (e | ) | $ | 3,366 | ||||||||||||
|
|
|
|
|
|
|||||||||||||||
Net income per Class A Common Stock |
Assuming No Public Warrant Exchanges |
|||||||||||||||||||
Basic |
$ | 0.02 | $ | 0.04 | (f | ) | ||||||||||||||
Diluted |
$ | 0.02 | $ | 0.04 | (f | ) | ||||||||||||||
Assuming Exchange of All Public Warrants |
||||||||||||||||||||
Basic |
$ | 0.04 | (f | ) | ||||||||||||||||
Diluted |
$ | 0.04 | (f | ) |
2. |
Adjustments and Assumptions to the Unaudited Pro Forma Condensed Consolidated Statements of Operations for the Year Ended December 31, 2021 and the Three Months Ended March 31, 2022 |
Historical |
Assuming No Public Warrant Exchanges |
Assuming Exchange of All Public Warrants | ||||||||||||||||||||||
(in thousands, except share and per share data) |
Year Ended December 31, 2021 |
Three Months Ended March 31, 2022 |
Year Ended December 31, 2021 |
Three Months Ended March 31, 2022 |
Year Ended December 31, 2021 |
Three Months Ended March 31, 2022 |
||||||||||||||||||
Numerator: |
||||||||||||||||||||||||
Net income attributable to Class A Common Stockholders |
$ | (3,283 | ) | $ | 1,259 | $ | 3,709 | $ | 3,366 | $ | 3,880 | $ | 3,537 | |||||||||||
Excess fair value provided to warrant holders in public warrant exchange |
— | — | — | — | (1,580 | ) | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income attributable to Class A Common Stockholders—basic |
(3,283 | ) | 1,259 | 3,709 | 3,366 | 2,300 | 3,537 | |||||||||||||||||
Net income effect of dilutive securities |
(123 | ) | 1,729 | (10 | ) | 26 | (138 | ) | 25 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income attributable to Class A Common Stockholders—diluted |
$ | (3,406 | ) | $ | 2,988 | $ | 3,699 | $ | 3,392 | $ | 2,162 | $ | 3,562 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Denominator: |
||||||||||||||||||||||||
Weighted average Class A Common Stock outstanding—basic |
77,498,775 | 79,151,929 | 77,060,009 | 79,151,929 | 81,411,876 | 83,503,795 | ||||||||||||||||||
Incremental Class A Common Stock attributable to dilutive securities |
— | 119,262,218 | 3,186,743 | 1,062,218 | — | 1,062,218 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Weighted average Class A Common Stock outstanding—diluted |
77,498,775 | 198,414,147 | 80,246,752 | 80,214,147 | 81,411,876 | 84,566,013 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income per Class A Common Stock—basic |
$ | (0.04 | ) | $ | 0.02 | $ | 0.05 | $ | 0.04 | $ | 0.03 | $ | 0.04 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income per Class A Common Stock—diluted |
$ | (0.04 | ) | $ | 0.02 | $ | 0.05 | $ | 0.04 | $ | 0.03 | $ | 0.04 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
Year Ended December 31, |
|||||||||||||||||||
2022 |
2021 |
2021 |
2020 |
2019 |
||||||||||||||||
Marketplace GOV (1) |
$ | 742,138 | $ | 116,473 | $ | 2,399,092 | $ | 347,259 | $ | 2,279,773 | ||||||||||
Total Marketplace orders (2) |
2,019 | 293 | 6,637 | 1,066 | 7,185 | |||||||||||||||
Total Resale orders (3) |
68 | 13 | 199 | 49 | 303 | |||||||||||||||
Adjusted EBITDA (4) |
$ | 21,012 | $ | 4,187 | $ | 109,869 | $ | (80,204 | ) | $ | 119,172 |
(1) | Marketplace GOV represents the total transactional amount of Marketplace segment orders placed on our platform in a period, inclusive of fees, exclusive of taxes, and net of event cancellations that occurred during that period. During the year ended December 31, 2021, Marketplace GOV was negatively impacted by event cancellations in the amount of $108.0 million, compared to $216.0 million and $22.2 million during the years ended December 31, 2020 and 2019. Marketplace GOV was negatively impacted by event cancellations in the amount of $34.8 million during the three months ended March 31, 2022 and $18.5 million during the three months ended March 31, 2021, though as a percentage of total Marketplace GOV the impact of event cancellations decreased significantly in the three months ended March 31, 2022 compared to the three months ended March 31, 2021. |
(2) | Total Marketplace orders represents the volume of Marketplace segment orders placed on our platform during a period, net of event cancellations that occurred during that period. During the year ended December 31, 2021, our Marketplace segment experienced 257,109 event cancellations, compared to 549,085 and 54,961 event cancellations during the years ended December 31, 2020 and 2019. During the three months ended March 31, 2022, our Marketplace segment experienced 91,400 event cancellations, compared to 51,775 event cancellations during the three months ended March 31, 2021, though as a percentage of Total Marketplace orders the impact of event cancellations decreased significantly in the three months ended March 31, 2022 compared to the three months ended March 31, 2021. |
(3) | Total Resale orders represents the volume of Resale segment orders sold by our Resale team in a period, net of event cancellations that occurred during that period. During the year ended December 31, 2021, our Resale segment experienced 6,165 event cancellations, compared to 20,644 and 1,517 event cancellations during the years ended December 31, 2020 and 2019. During the three months ended March 31, 2022, our Resale segment experienced 2,559 event cancellations, compared to 1,141 event cancellations during the three months ended March 31, 2021, though as a percentage of Total Resale orders the impact of event cancellations decreased significantly in the three months ended March 31, 2022 compared to the three months ended March 31, 2021. |
(4) | Adjusted EBITDA is not a measure defined under GAAP. We believe Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our results of operations, as well as provides a useful measure for period-to-period |
Three Months Ended March 31, |
Year Ended December 31, |
|||||||||||||||||||
2022 |
2021 |
2021 |
2020 |
2019 |
||||||||||||||||
Net loss |
$ | 3,138 | $ | (20,251 | ) | $ | (19,129 | ) | $ | (774,185 | ) | $ | (53,848 | ) | ||||||
Income tax expense |
76 | — | 304 | — | — | |||||||||||||||
Interest expense |
3,942 | 16,319 | 58,179 | 57,482 | 41,497 | |||||||||||||||
Depreciation and amortization |
1,385 | 295 | 2,322 | 48,247 | 93,078 | |||||||||||||||
Sales tax liability (1) |
922 | 2,261 | 8,956 | 6,772 | 10,045 | |||||||||||||||
Transaction costs (2) |
1,402 | 3,546 | 12,852 | 359 | 8,857 | |||||||||||||||
Equity-based compensation (3) |
3,597 | 1,091 | 6,047 | 4,287 | 5,174 | |||||||||||||||
Senior management transition costs (4) |
— | — | — | — | 2,706 | |||||||||||||||
Loss on extinguishment of debt (5) |
4,285 | — | 35,828 | 685 | 2,414 | |||||||||||||||
Litigation, settlements and related costs (6) |
(14 | ) | 641 | 2,835 | 1,347 | 2,256 | ||||||||||||||
Change to annual bonus program (7) |
— | — | — | — | 2,810 | |||||||||||||||
Customer loyalty program stand-up costs(8) |
— | — | — | — | 3,223 | |||||||||||||||
Impairment charges (9) |
— | — | — | 573,838 | — | |||||||||||||||
Loss on asset disposals (10) |
— | — | — | 169 | 960 | |||||||||||||||
Severance related to COVID-19 (11) |
— | 285 | 286 | 795 | — | |||||||||||||||
Change in value of warrants (12) |
2,279 | — | 1,389 | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Adjusted EBITDA |
$ |
21,012 |
$ |
4,187 |
$ |
109,869 |
$ |
(80,204 |
) |
$ |
119,172 |
|||||||||
|
|
|
|
|
|
|
|
|
|
(1) | We have historically incurred sales tax expense in jurisdictions where we expected to remit sales tax payments but were not yet collecting from customers. During the second half of 2021, we began collecting sales tax from customers in all required states. The sales tax liability presented herein represents the exposure for sales tax prior to the date we began collecting sales tax from customers reduced by abatements received, inclusive of any penalties and interest assessed by the jurisdictions. Discussions with jurisdictions regarding our liability for uncollected sales taxes continued into 2022. |
(2) | Transaction costs consist of legal; accounting; tax and other professional fees; as well as personnel-related costs, which consist of severance and retention bonuses; and integration costs. Transaction costs recognized in 2022 were related to the merger transaction with Horizon Acquisition Corporation, the acquisition of Betcha Sports, Inc. (“Betcha”), and refinancing of the remaining June 2017 First Lien Loan (as defined herein) with a new February 2022 First Lien Loan (as defined herein). Transaction costs recognized in 2021 were related to the Business Combination, to the extent they were not eligible for capitalization, and the acquisition of Betcha. Transaction costs recognized in 2020 were related to the acquisition of Fanxchange Ltd. in 2019. In 2019, we completed the acquisition of Fanxchange Ltd. and attempted to pursue an acquisition that was ultimately abandoned. These acquisition-related costs are not representative of normal, recurring, cash operating expenses. |
(3) | We incur equity-based compensation expenses for profit interests issued prior to the Business Combination and equity granted according to the 2021 Plan, which we do not consider to be indicative of our core operating performance. The 2021 Plan was approved and adopted in order to facilitate the grant of equity incentive awards to our employees and directors. The 2021 Plan became effective on October 18, 2021. |
(4) | In 2019, we incurred costs associated with the transition to our current senior management team, including our Chief Executive Officer. These costs include recruiting costs and costs to compensate our Chief Executive Officer for benefits forfeited at his previous employer. |
(5) | Losses incurred resulted from the extinguishment of the June 2017 First Lien Loan in February 2022, the retirement of the May 2020 First Lien Loan (as defined herein) and fees paid related to the early payment of a portion of the principal of the June 2017 First Lien Loan in October 2021, the retirement of the revolving credit facility in May 2020, and the repayment of the $40.0 million second lien term loan in 2019. |
(6) | These expenses relate to external legal costs and settlement costs, which were unrelated to our core business operations. |
(7) | We restructured our employee incentive compensation plan during 2019. |
(8) | During August 2019, we initiated the Vivid Seats Rewards customer loyalty program. We incurred $3.2 million of initial stand-up costs related to the commencement of the program. These stand-up costs consist primarily of customer incentives and marketing costs, which are not expected to reoccur. |
(9) | We incurred impairment charges triggered by the effects of the COVID-19 pandemic during the year ended December 31, 2020. The impairment charges resulted in a reduction in the carrying values of our goodwill, indefinite-lived trademark, definite-lived intangible assets, and other long-lived assets. See our audited financial statements included elsewhere in this Prospectus/Offer to Exchange for additional information. |
(10) | We incurred losses on asset disposals, which are not considered indicative of our core operating performance. |
(11) | These charges relate to severance costs resulting from significant reductions in employee headcount due to the effects of the COVID-19 pandemic. |
(12) | These expenses relate to the modification of the terms of the Vivid Seats Public IPO Warrants in connection with the Business Combination and revaluation of Hoya Intermediate Warrants following the Business Combination. |
• | sports teams performance, the number of playoff games in a series and teams involved; |
• | the timing of tours of top grossing acts; |
• | tour and game cancellations due to weather, illness or other factors; and |
• | popularity and demand for certain performers and events. |
Three Months Ended March 31, |
||||||||||||||||
2022 |
2021 |
Change |
% Change |
|||||||||||||
Revenues |
$ | 130,772 | $ | 24,114 | $ | 106,658 | 442 | % | ||||||||
Costs and expenses: |
||||||||||||||||
Cost of revenues (exclusive of depreciation and amortization shown separately below) |
32,164 | 3,925 | 28,239 | 719 | % | |||||||||||
Marketing and selling |
54,228 | 7,955 | 46,273 | 582 | % | |||||||||||
General and administrative |
29,275 | 15,871 | 13,404 | 84 | % | |||||||||||
Depreciation and amortization |
1,385 | 295 | 1,090 | 369 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income (loss) from operations |
13,720 |
(3,932 |
) |
17,652 |
449 |
% | ||||||||||
Other expenses: |
||||||||||||||||
Interest expense – net |
3,942 | 16,319 | (12,377 | ) | (76 | )% | ||||||||||
Loss on extinguishment of debt |
4,285 | — | 4,285 | 100 | % | |||||||||||
Other expenses |
2,279 | — | 2,279 | 100 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income (loss) before income taxes |
3,214 |
(20,251 |
) |
23,465 |
116 |
% | ||||||||||
Income tax expense |
76 | — | 76 | 100 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) |
3,138 |
(20,251 |
) |
23,389 |
115 |
% | ||||||||||
Net loss attributable to Hoya Intermediate, LLC shareholders prior to reverse recapitalization |
— | (20,251 | ) | 20,251 | 100 | % | ||||||||||
Net income attributable to redeemable noncontrolling interests |
1,879 | — | 1,879 | 100 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) attributable to Class A Common Stockholders |
$ |
1,259 |
$ |
— |
$ |
1,259 |
100 |
% | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
||||||||||||||||
2022 |
2021 |
Change |
% Change |
|||||||||||||
Revenues: |
||||||||||||||||
Marketplace |
$ | 110,516 | $ | 21,993 | $ | 88,523 | 403 | % | ||||||||
Resale |
20,256 | 2,121 | 18,135 | 855 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenues |
$ |
130,772 |
$ |
24,114 |
$ |
106,658 |
442 |
% | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
||||||||||||||||
2022 |
2021 |
Change |
% Change |
|||||||||||||
Revenues: |
||||||||||||||||
Concerts |
$ | 58,673 | $ | 7,014 | $ | 51,659 | 737 | % | ||||||||
Sports |
38,915 | 14,138 | 24,777 | 175 | % | |||||||||||
Theater |
12,615 | 783 | 11,832 | 1,511 | % | |||||||||||
Other |
313 | 58 | 255 | 440 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Marketplace revenues |
$ |
110,516 |
$ |
21,993 |
$ |
88,523 |
403 |
% | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
||||||||||||||||
2022 |
2021 |
Change |
% Change |
|||||||||||||
Revenues: |
||||||||||||||||
Owned Properties |
$ | 83,666 | $ | 18,196 | $ | 65,470 | 360 | % | ||||||||
Private Label |
26,850 | 3,797 | 23,053 | 607 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Marketplace revenues |
$ |
110,516 |
$ |
21,993 |
$ |
88,523 |
403 |
% | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
||||||||||||||||
2022 |
2021 |
Change |
% Change |
|||||||||||||
Cost of revenues: |
||||||||||||||||
Marketplace |
$ | 16,409 | $ | 2,700 | $ | 13,709 | 508 | % | ||||||||
Resale |
15,755 | 1,225 | 14,530 | 1,186 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cost of revenues |
$ |
32,164 |
$ |
3,925 |
$ |
28,239 |
719 |
% | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
||||||||||||||||
2022 |
2021 |
Change |
% Change |
|||||||||||||
Marketing and selling: |
||||||||||||||||
Online |
$ | 49,850 | $ | 7,789 | $ | 42,061 | 540 | % | ||||||||
Offline |
4,378 | 166 | 4,212 | 2,537 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total marketing and selling |
$ |
54,228 |
$ |
7,955 |
$ |
46,273 |
582 |
% | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
||||||||||||||||
2022 |
2021 |
Change |
% Change |
|||||||||||||
General and administrative: |
||||||||||||||||
Personnel expenses |
$ | 19,737 | $ | 6,671 | $ | 13,066 | 196 | % | ||||||||
Non-income tax expenses |
1,239 | 2,362 | (1,123 | ) | (48 | )% | ||||||||||
Other |
8,299 | 6,838 | 1,461 | 21 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total general and administrative |
$ |
29,275 |
$ |
15,871 |
$ |
13,404 |
84 |
% | ||||||||
|
|
|
|
|
|
|
|
2021 |
2020 |
Change |
% Change |
|||||||||||||
Revenues |
$ | 443,038 | $ | 35,077 | $ | 407,961 | 1163 | % | ||||||||
Costs and expenses: |
||||||||||||||||
Cost of revenues (exclusive of depreciation and amortization shown separately below) |
90,617 | 24,690 | 65,927 | 267 | % | |||||||||||
Marketing and selling |
181,358 | 38,121 | 143,237 | 376 | % | |||||||||||
General and administrative |
92,170 | 66,199 | 25,971 | 39 | % | |||||||||||
Depreciation and amortization |
2,322 | 48,247 | (45,925 | ) | (95 | )% | ||||||||||
Impairment charges |
— | 573,838 | (573,838 | ) | (100 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income (loss) from operations |
76,571 | (716,018 | ) | 792,589 | 111 | % | ||||||||||
Other expenses: |
||||||||||||||||
Interest expense – net |
58,179 | 57,482 | 697 | 1 | % | |||||||||||
Loss on extinguishment of debt |
35,828 | 685 | 35,143 | 5,130 | % | |||||||||||
Other expenses |
1,389 | — | 1,389 | 100 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before income taxes |
(18,825 | ) | (774,185 | ) | 755,360 | 98 | % | |||||||||
Income tax expense |
304 | — | 304 | 100 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss |
(19,129 | ) | (774,185 | ) | 755,056 | 98 | % | |||||||||
Net loss attributable to Hoya Intermediate, LLC shareholders prior to reverse recapitalization |
(12,836 | ) | (774,185 | ) | 761,349 | 98 | % | |||||||||
Net loss attributable to redeemable noncontrolling interests |
(3,010 | ) | — | (3,010 | ) | 100 | % | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss attributable to Class A Common Stockholders |
$ |
(3,283 |
) | $ |
— |
$ |
(3,283 |
) | 100 |
% | ||||||
|
|
|
|
|
|
|
|
2021 |
2020 |
Change |
% Change |
|||||||||||||
Revenues: |
||||||||||||||||
Marketplace |
$ | 389,668 | $ | 23,281 | $ | 366,387 | 1,574 | % | ||||||||
Resale |
53,370 | 11,796 | 41,574 | 352 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenues |
$ |
443,038 |
$ |
35,077 |
$ |
407,961 |
1,163 |
% | ||||||||
|
|
|
|
|
|
|
|
2021 |
2020 |
Change |
% Change |
|||||||||||||
Revenues: |
||||||||||||||||
Concerts |
$ | 171,149 | $ | 15,775 | $ | 155,374 | 985 | % | ||||||||
Sports |
175,471 | 3,484 | 171,987 | 4,936 | % | |||||||||||
Theater |
41,745 | 3,759 | 37,986 | 1,011 | % | |||||||||||
Other |
1,303 | 263 | 1,040 | 395 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Marketplace revenues |
$ |
389,668 |
$ |
23,281 |
$ |
366,387 |
1,574 |
% | ||||||||
|
|
|
|
|
|
|
|
2021 |
2020 |
Change |
% Change |
|||||||||||||
Revenues: |
||||||||||||||||
Owned Properties |
$ | 308,226 | $ | 24,188 | $ | 284,038 | 1,174 | % | ||||||||
Private Label |
81,442 | (907 | ) | 82,349 | 9,079 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Marketplace revenues |
$ |
389,668 |
$ |
23,281 |
$ |
366,387 |
1,574 |
% | ||||||||
|
|
|
|
|
|
|
|
2021 |
2020 |
Change |
% Change |
|||||||||||||
Cost of revenues: |
||||||||||||||||
Marketplace |
$ | 51,702 | $ | 13,741 | $ | 37,961 | 276 | % | ||||||||
Resale |
38,915 | 10,949 | 27,966 | 255 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cost of revenues |
$ |
90,617 |
$ |
24,690 |
$ |
65,927 |
267 |
% | ||||||||
|
|
|
|
|
|
|
|
2021 |
2020 |
Change |
% Change |
|||||||||||||
Marketing and selling: |
||||||||||||||||
Online |
$ | 160,420 | $ | 34,213 | $ | 126,207 | 369 | % | ||||||||
Offline |
20,938 | 3,908 | 17,030 | 436 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total marketing and selling |
$ |
181,358 |
$ |
38,121 |
$ |
143,237 |
376 |
% | ||||||||
|
|
|
|
|
|
|
|
2021 |
2020 |
Change |
% Change |
|||||||||||||
General and administrative: |
||||||||||||||||
Personnel expenses |
$ | 47,546 | $ | 37,696 | $ | 9,850 | 26 | % | ||||||||
Non-income tax expenses |
10,016 | 7,060 | 2,956 | 42 | % | |||||||||||
Other |
34,608 | 21,443 | 13,165 | 61 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total general and administrative |
$ |
92,170 |
$ |
66,199 |
$ |
25,971 |
39 |
% | ||||||||
|
|
|
|
|
|
|
|
2021 |
2020 |
Change |
% Change |
|||||||||||||
Other expenses |
||||||||||||||||
Interest expense - net |
$ | 58,179 | $ | 57,482 | $ | 697 | 1 | % | ||||||||
Loss on extinguishment of debt |
35,828 | 685 | 35,143 | 5,130 | % | |||||||||||
Other expenses |
1,389 | — | 1,389 | 100 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other expenses |
$ |
95,396 |
$ |
58,167 |
$ |
37,229 |
64 |
% | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
Year Ended December 31, |
|||||||||||||||||||
2022 |
2021 |
2021 |
2020 |
2019 |
||||||||||||||||
Net cash provided by (used in) operating activities |
$ | 23,534 | $ | 30,761 | $ | 219,931 | $ | (33,892 | ) | $ | 76,478 | |||||||||
Net cash used in investing activities |
(3,441 | ) | (1,726 | ) | (9,345 | ) | (7,605 | ) | (40,155 | ) | ||||||||||
Net cash (used in) provided by financing activities |
(195,568 | ) | (1,603 | ) | (6,113 | ) | 245,545 | (55,462 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net increase (decrease) in cash and cash equivalents |
$ |
(175,475 |
) |
$ |
27,432 |
$ |
204,473 |
$ |
204,048 |
$ |
(19,139 |
) | ||||||||
|
|
|
|
|
|
|
|
|
|
Name |
Age |
Position | ||
Stanley Chia |
40 | Chief Executive Officer and Director | ||
Lawrence Fey |
41 | Chief Financial Officer | ||
Jon Wagner |
49 | Chief Technology Officer | ||
Riva Bakal |
38 | Chief Product and Strategy Officer | ||
David Morris |
47 | General Counsel | ||
Todd Boehly |
48 | Director | ||
Jane DeFlorio |
51 | Director | ||
Craig Dixon |
46 | Director | ||
Julie Masino |
51 | Director | ||
Martin Taylor |
52 | Director | ||
Mark Anderson |
46 | Director | ||
David Donnini |
56 | Director | ||
Tom Ehrhart |
35 | Director |
• | The Class I directors are Jane DeFlorio, David Donnini and Stanley Chia; |
• | The Class II directors are Tom Ehrhart, Craig Dixon and Martin Taylor; and |
• | The Class III directors are Julie Masino, Mark Anderson and Todd Boehly. |
• | overseeing our accounting and financial reporting process; |
• | appointing, compensating, retaining and overseeing the work of our registered independent public accounting firm and any other registered public accounting firm engaged for the purpose of preparing or issuing an audit report or related work or performing other audit, review or attest services for us; |
• | discussing with our registered independent public accounting firm any audit problems or difficulties and management’s response; |
• | pre-approving all audit and non-audit services provided to us by our registered independent public accounting firm (other than those provided pursuant to appropriate preapproval policies established by the audit committee or exempt from such requirement under the rules of the SEC); |
• | reviewing and discussing our annual and quarterly financial statements with management and our registered independent public accounting firm; |
• | discussing our risk management policies; |
• | reviewing and approving or ratifying any related person transactions; |
• | establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or auditing matters, and for the confidential and anonymous submission by our employees of concerns regarding questionable accounting or auditing matters; and |
• | preparing the audit committee report required by SEC rules. |
• | reviewing and approving corporate goals and objectives with respect to the compensation of our Chief Executive Officer, evaluating our Chief Executive Officer’s performance in light of these goals and objectives and setting our Chief Executive Officer’s compensation; |
• | reviewing and setting or making recommendations to our Board of Directors regarding the compensation of our other executive officers; |
• | reviewing and making recommendations to our Board of Directors regarding director compensation; |
• | reviewing and approving or making recommendations to our Board of Directors regarding our incentive compensation and equity-based plans and arrangements; |
• | appointing and overseeing any compensation consultants; |
• | reviewing and discussing annually with management our “Compensation Discussion and Analysis,” to the extent required; and |
• | preparing the annual compensation committee report required by SEC rules, to the extent required. |
• | identifying individuals qualified to become members of our Board of Directors and ensure the Board of Directors has the requisite expertise and consists of persons with sufficiently diverse and independent backgrounds; |
• | recommending to our Board of Directors the persons to be nominated for election as directors and to each committee of the Board of Directors; |
• | developing and recommending to our Board of Directors corporate governance guidelines, and reviewing and recommending to our Board of Directors proposed changes to our corporate governance guidelines from time to time; and |
• | overseeing the annual evaluations of our Board of Directors, its committees and management. |
• | Stanley Chia, Chief Executive Officer; |
• | Lawrence Fey, Chief Financial Officer; and |
• | Jon Wagner, Chief Technology Officer. |
Name and Principal Position |
Year |
Salary ($) |
Stock Awards ($) (1) |
Option Awards ($) (2) |
Non-equity Incentive Plan Compensation ($) (3) |
All Other Compensation ($) (4) |
Total ($) |
|||||||||||||||||||||
Stanley Chia, Chief Executive Officer |
2021 | 600,000 | 2,500,000 | 4,303,791 | 900,000 | 20,417 | 8,324,208 | |||||||||||||||||||||
2020 | 551,539 | 1,042,105 | — | 275,769 | 26,906 | 1,896,319 | ||||||||||||||||||||||
Lawrence Fey, Chief Financial Officer |
2021 | 300,000 | 2,000,000 | 3,443,033 | 225,000 | 11,400 | 5,979,433 | |||||||||||||||||||||
2020 | 192,692 | 483,973 | — | 48,173 | 6,877 | 731,715 | ||||||||||||||||||||||
Jon Wagner, Chief Technology Officer |
2021 | 360,231 | 1,000,000 | 1,721,516 | 270,173 | 11,400 | 3,363,320 | |||||||||||||||||||||
2020 | 350,000 | 303,354 | — | 87,500 | 9,205 | 750,059 |
(1) | The amounts shown in this column represent restricted stock units granted under our 2021 Incentive Award Plan. The amounts represent the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. For a detailed description of the assumptions used for purposes of determining grant date fair value, see Item 8 “Financial Statements and Supplementary Data–Note 20 to our Consolidated Financial Statements” and Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Critical Accounting Policies and Estimates–Equity-Based Compensation” in our Annual Report on Form 10-K filed with the SEC on March 15, 2022. |
(2) | The amounts shown in this column represent stock options granted under our 2021 Incentive Award Plan. The amounts represent the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. For a detailed description of the assumptions used for purposes of determining grant date fair value, see Item 8 “Financial Statements and Supplementary Data–Note 20 to our Consolidated Financial Statements” and Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Critical Accounting Policies and Estimates–Equity-Based Compensation” in our Annual Report on Form 10-K filed with the SEC on March 15, 2022. |
(3) | The amounts shown in this column represent cash incentive awards earned for 2021 and paid in the first quarter of 2022 under our Annual Incentive Plan. See “2021 Annual Incentive Plan Awards” below. |
(4) | The amount for Mr. Chia reflects (a) Young Presidents’ Organization international membership in the amount of $9,017, and (b) employer matching contribution under our 401(k) in the amount of $11,400. The amounts for Mr. Fey and Mr. Wagner reflect employer matching contributions under our 401(k). |
Actual Revenue /Adjusted EBITDA Performance as % of Operating Plan Target |
Payout | |||
Threshold |
85% | 40% | ||
90% | 60% | |||
95% | 80% | |||
Target |
100% | 100% | ||
105% | 120% | |||
110% | 135% | |||
Maximum |
115% | 150% |
• | medical, dental and vision benefits; |
• | medical and dependent care flexible spending accounts; |
• | short-term and long-term disability insurance; and |
• | life insurance. |
Annual Base Salary |
COBRA Health Insurance Premiums | |||
Mr. Chia |
12 months | 12 months | ||
Mr. Fey |
12 months | 12 months | ||
Mr. Wagner |
9 months | 9 months |
Position |
Reporting Structure |
Primary Location | ||||
Mr. Chia |
sole CEO, most senior officer, and member of Board of Directors | Our Board of Directors | Headquarters in Chicago | |||
Mr. Fey |
CFO | CEO or Board of Directors | Austin-Round Rock-San | |||
Mr. Wagner |
CTO | CEO | Philadelphia-Camden-Wilmington metropolitan area or Chicago-Naperville-Elgin metropolitan area |
Name |
Type of Equity |
Grant Date |
Number of Securities Underlying Unexercised Options (#) Unexercisable |
Number of Securities Underlying Unexercised Options (#) Unexercisable (1) |
Option Exercise Price ($) |
Option Expiration Date |
Number of Shares or Units of Stock That Have Not Vested (#) (2) |
Market Value of Shares or Units of Stock That Have Not Vested ($) |
||||||||||||||||||||||
Stanley Chia |
Profit interests |
11/5/2018 | — | 200,306 | (1) |
874,262 | (8) | |||||||||||||||||||||||
Phantom equity |
9/1/2020 | — | 360,000 | (2) |
2,674,172 | (8) | ||||||||||||||||||||||||
Profit interests |
9/1/2020 | — | 360,000 | (2) |
14,760,865 | (8) | ||||||||||||||||||||||||
Stock Options |
10/19/2021 | — | 938,812 | (3) |
12.86 | (4) |
10/19/2031 | |||||||||||||||||||||||
Stock Options |
10/19/2021 | — | 275,682 | (3) |
15.00 | 10/19/2031 | ||||||||||||||||||||||||
Restricted Stock Units |
10/19/2021 | — | 250,000 | (5) |
2,720,000 | (9) | ||||||||||||||||||||||||
Lawrence Fey |
Phantom equity |
9/1/2020 | — | 88,000 | (6) |
653,686 | (8) | |||||||||||||||||||||||
Profit interests |
9/1/2020 | — | 88,000 | (6) |
3,608,212 | (8) | ||||||||||||||||||||||||
Profit interests |
9/1/2020 | — | 352,000 | (6) |
1,310,901 | (8) | ||||||||||||||||||||||||
Stock Options |
10/19/2021 | — | 751,050 | (3) |
12.86 | (4) |
10/19/2031 | |||||||||||||||||||||||
Stock Options |
10/19/2021 | — | 220,546 | (3) |
15.00 | 10/19/2031 | ||||||||||||||||||||||||
Restricted Stock Units |
10/19/2021 | — | 200,000 | (5) |
2,176,000 | (9) | ||||||||||||||||||||||||
Jon Wagner |
Profit interests |
12/17/2018 | — | 36,000 | (7) |
0 | (8) | |||||||||||||||||||||||
Phantom equity |
9/1/2020 | — | 61,600 | (6) |
457,580 | (8) | ||||||||||||||||||||||||
Profit interests |
9/1/2020 | — | 61,600 | (6) |
2,525,748 | (8) | ||||||||||||||||||||||||
Profit interests |
9/1/2020 | — | 192,000 | (6) |
715,037 | (8) | ||||||||||||||||||||||||
Stock Options |
10/19/2021 | — | 375,525 | (3) |
12.86 | (4) |
10/19/2031 | |||||||||||||||||||||||
Stock Options |
10/19/2021 | — | 110,273 | (3) |
15.00 | 10/19/2031 | ||||||||||||||||||||||||
Restricted Stock Units |
10/19/2021 | — | 100,000 | (5) |
1,088,000 | (9) |
(1) | Vesting occurs in 20% equal installments on each anniversary of November 5, 2018, subject to Mr. Chia’s continued employment through each vesting date. Upon certain qualifying terminations, (a) an additional 10% of unvested profits interests will accelerate and vest in connection with Mr. Chia’s termination and (b) if a sale of Hoya Topco is consummated in the six-month period following Mr. Chia’s termination, all of the unvested units will accelerate and vest. |
(2) | Vesting occurs in 20% equal installments on each anniversary of June 30, 2020, subject to Mr. Chia’s continued employment through each vesting date. Upon certain qualifying terminations, (a) an additional 10% of unvested profits interests will accelerate and vest in connection with Mr. Chia’s termination and (b) if a sale of Hoya Topco is consummated in the six-month period following Mr. Chia’s termination, all of the unvested units will accelerate and vest. |
(3) | The stock options vest in 16 equal quarterly installments beginning on January 19, 2022. |
(4) | The options were awarded with an original exercise price of $13.09 per share on the date of grant. On the grant date, we anticipated that we would pay an extraordinary dividend of $0.23 per share in the near term. When the dividend was paid on November 2, 2021, the exercise price of the options was reduced by $0.23 per share, which resulted in an exercise price of $12.86 per share. |
(5) | The restricted stock units vest in 16 equal quarterly installments beginning on January 19, 2022. |
(6) | Vesting occurs in 20% equal installments on each anniversary of June 30, 2020, subject to the named executive officer’s continued employment through each vesting date. |
(7) | Vesting occurs in 20% equal installments on each anniversary of December 12, 2018, subject to the named executive officer’s continued employment through each vesting date. |
(8) | There is no public market for the profits interests. For purposes of this disclosure, we have valued the profits interests primarily based on the Class A share price as of December 31, 2021. The amount reported above under the heading “Market Value of Shares or Units of Stock That Have Not Vested” reflects the intrinsic value of the profits interests as of December 31, 2021, based upon the terms of each individual’s profits interests. |
(9) | Represents the fair market value per share of our common stock of $10.88, as of December 31, 2021. |
Name |
Fees Earned or Paid in Cash ($) |
Stock Awards ($) (1) (2) |
All Other Compensation ($) |
Total ($) |
||||||||||||
Mark Anderson |
9,680.71 | 320,000 | — | 329,681 | ||||||||||||
Todd Boehly |
9,680.71 | 320,000 | — | 329,681 | ||||||||||||
Jane DeFlorio |
10,190.22 | 320,000 | — | 330,190 | ||||||||||||
Craig Dixon |
10,190.22 | 320,000 | — | 330,190 | ||||||||||||
David Donnini |
10,699.73 | 320,000 | — | 330,700 | ||||||||||||
Tom Ehrhart |
9,171.20 | 320,000 | — | 329,171 | ||||||||||||
Julie Masino |
11,209.24 | 320,000 | — | 331,209 | ||||||||||||
Martin Taylor |
— | — | — | — |
(1) | The amounts shown in this column for 2021 represent awards granted under our 2021 Incentive Award Plan. The amounts listed are equal to the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. For a detailed description of the assumptions used for purposes of determining grant date fair value, see Item 8 “Financial Statements and Supplementary Data–Note 20 to our Consolidated Financial Statements” and Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Critical Accounting Policies and Estimates–Equity-Based Compensation” in our Annual Report on Form 10-K filed with the SEC on March 15, 2022. |
(2) | The restricted stock units vest in five equal annual installments on the first five anniversaries of the date of grant, subject to the non-employee director’s continued service through each vesting date. |
• | Restricted stock units having an aggregate grant date fair value of $320,000 on the date of his or her initial election or appointment to our Board of Directors, which will vest in five equal installments on the first five anniversaries of the date of grant, and |
• | Restricted stock units having an aggregate grant date fair value of $160,000 on an annual basis on the date of our annual meeting of shareholders; provided, however, that the value of this award will be paid pro rata based on the number of days that have elapsed during the Board of Directors term. Each annual award will vest on the earlier of the day before the date of the first annual meeting of shareholders after the date of grant and the first anniversary of the date of grant. |
• | general economic and business conditions; |
• | our strategic plans and prospects; |
• | our business and investment opportunities; |
• | our financial condition and operating results, including our cash position, net income and realizations on investments made by its investment funds; |
• | working capital requirements and anticipated cash needs; |
• | contractual restrictions and obligations, including payment obligations pursuant to the Tax Receivable Agreement and restrictions pursuant to any credit facility; and |
• | legal, tax and regulatory restrictions. |
• | U.S. expatriates and former citizens or long-term residents of the United States; |
• | persons subject to the alternative minimum tax; |
• | persons holding our public warrants or Class A Common Stock as part of a hedge, straddle or other risk reduction strategy or as part of a conversion transaction or other integrated investment; |
• | banks, insurance companies, and other financial institutions; |
• | real estate investment trusts or regulated investment companies; |
• | brokers, dealers or traders in securities; |
• | “controlled foreign corporations,” “passive foreign investment companies,” and corporations that accumulate earnings to avoid U.S. federal income tax; |
• | S corporations, partnerships or other entities or arrangements treated as partnerships for U.S. federal income tax purposes (and investors therein); |
• | tax-exempt organizations or governmental organizations; |
• | persons deemed to sell our public warrants or Class A Common Stock under the constructive sale provisions of the Code; |
• | persons who hold or receive our public warrants or Class A Common Stock pursuant to the exercise of any employee stock option, in connection with the performance of services, or otherwise as compensation; and |
• | persons subject to special tax accounting rules as a result of any item of gross income with respect to the public warrants or Class A Common Stock being taken into account in an applicable financial statement. |
• | an individual who is a citizen or resident of the United States; |
• | a corporation created or organized under the laws of the United States, any state thereof, or the District of Columbia; |
• | an estate, the income of which is subject to U.S. federal income tax regardless of its source; or |
• | a trust that (1) is subject to the primary supervision of a U.S. court and the control of one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code), or (2) has a valid election in effect to be treated as a United States person for U.S. federal income tax purposes. |
• | the holder fails to furnish the holder’s taxpayer identification number, which for an individual is ordinarily his or her social security number; |
• | the holder furnishes an incorrect taxpayer identification number; |
• | the applicable withholding agent is notified by the IRS that the holder previously failed to properly report payments of interest or dividends; or |
• | the holder fails to certify under penalties of perjury that the holder has furnished a correct taxpayer identification number and that the IRS has not notified the holder that the holder is subject to backup withholding. |
• | the Non-U.S. Holder is an individual that was present in the U.S. for 183 days or more during the taxable year of such disposition and certain other requirements are met, in which case any gain realized will generally be subject to a flat 30% U.S. federal income tax; |
• | the gain is effectively connected with a trade or business of such Non-U.S. Holder in the United States (and if required by an applicable income tax treaty, is attributable to a U.S. permanent establishment or fixed base maintained by such Non-U.S. Holder), in which case such gain will be subject to U.S. federal income tax on a net basis at the same graduated individual or corporate rates applicable to U.S. Holders, and, if the Non-U.S. Holder is a corporation, an additional “branch profits tax” may also apply; or |
• | we are or have been a “United States real property holding corporation” (“USRPHC”) for U.S. federal income tax purposes at any time during the shorter of the five-year period preceding such disposition and such Non-U.S. Holder’s holding period. |
• | in whole and not in part; |
• | at a price of $0.01 per 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 shares of Class A Common Stock equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a public warrant as described under the heading “—Vivid Seats Public Warrants—Anti-Dilution Adjustments”) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders. |
• | The Form of New Warrant Agreement excludes references to ownership through The Depository Trust Company; |
• | The Form of New Warrant Agreement reflects the fact that the Vivid Seats $10.00 Exercise Warrants and Vivid Seats $15.00 Exercise Warrants were not issued as part of a unit; |
• | The Form of New Warrant Agreement does not distinguish between “private” and “public” warrants; |
• | The Vivid Seats $10.00 Exercise Warrants and the Vivid Seats $15.00 Exercise Warrants terminate on the date that is ten years after the date of completion of the Business Combination; |
• | The Form of New Warrant Agreement does not provide for the redemption of the Vivid Seats $10.00 Exercise Warrants or the Vivid Seats $15.00 Exercise Warrants; |
• | The underlying value for purposes of warrant exercise makes reference to the last reported sale price; and |
• | The Form of New Warrant Agreement excludes provisions contingent upon the consummation of the Business Combination. |
• | Action by Written Consent; Special Meetings of Stockholders |
• | Advance Notice Procedures |
• | Authorized but Unissued Shares |
• | Business Combinations with Interested Stockholders |
• | Director Designees; Classes of Directors |
• | No Cumulative Voting for Directors |
• | Restriction on Issuance of Class B Common Stock |
• | existing tax basis in certain assets of Hoya Intermediate and certain of its direct or indirect subsidiaries, including assets that will eventually be subject to depreciation or amortization, once placed in service; |
• | tax basis adjustments resulting from taxable exchanges of Intermediate Common Units (including any such adjustments resulting from certain payments made by us under the Tax Receivable Agreement) acquired by us from a TRA Holder pursuant to the terms of the Second A&R LLCA; |
• | certain tax attributes of Blocker Corporations holding Intermediate Common Units that are acquired directly or indirectly by us pursuant to a Reorganization Transaction; |
• | certain tax benefits realized by us as a result of certain U.S. federal income tax allocations of taxable income or gain away from us and to other members of Hoya Intermediate and deductions or losses to us and away from other members of Hoya Intermediate, in each case, as a result of the Business Combination; and |
• | tax deductions in respect of portions of certain payments made under the Tax Receivable Agreement. |
• | any person who is, or at any time during the applicable period was, one of our executive officers or one of our directors; |
• | any person who is known by us to be the beneficial owner of more than 5% of our voting shares; |
• | any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law sister-in-law |
• | any firm, corporation or other entity in which any of the foregoing persons is a partner or principal, or in a similar position, or in which such person has a 10% or greater beneficial ownership interest. |
• | each person who is known to be the beneficial owner of more than 5% of our voting shares; |
• | each of our named executive officers and directors; and |
• | all our executive officers and directors as a group. |
Class A Common Stock |
Class B Common Stock |
Combined Voting Power (%) (1) |
||||||||||||||||||
Name and Address of Beneficial Owner |
Number |
% |
Number |
% |
||||||||||||||||
Five Percent Holders: |
— | — | ||||||||||||||||||
Hoya Topco, LLC (2) |
— | — | 124,200,000 | 100 | 61.07 | |||||||||||||||
Eldridge Industries, LLC (3)(5) |
100,243,630 | 80.29 | — | — | 41.24 | |||||||||||||||
The Vanguard Group (4) |
4,108,645 | 5.19 | — | — | 2.08 | |||||||||||||||
Delaware Life Holdings Parent II, LLC (6) |
5,000,000 | 6.32 | — | — | 2.53 | |||||||||||||||
Named Executive Officers: |
||||||||||||||||||||
Stanley Chia (3) |
183,061 | — | — | * | ||||||||||||||||
Lawrence Fey (3) |
146,449 | * | — | — | * | |||||||||||||||
Jon Wagner (3) |
71,085 | * | — | — | * | |||||||||||||||
Non-Employee Directors: |
||||||||||||||||||||
Todd Boehly (3)(5) |
100,243,630 | 80 | .29 | — | — | 41 | .24 | |||||||||||||
Jane DeFlorio (3) |
— | * | — | — | * | |||||||||||||||
Craig Dixon (3) |
— | * | — | — | * | |||||||||||||||
Julie Masino (3) |
— | * | — | — | * | |||||||||||||||
Martin Taylor (3) |
— | * | — | — | * | |||||||||||||||
Mark Anderson (2)(3) |
— | * | 124,200,000 | 100 | 61 | .07 | ||||||||||||||
David Donnini (2)(3) |
— | * | 124,200,000 | 100 | 61 | .07 | ||||||||||||||
Tom Ehrhart (3) |
— | * | — | — | * | |||||||||||||||
All directors and executive officers, as a group (13 individuals) |
100,705,080 | 80.38 | 124,200,000 | 100 | 90 | .15 |
(1) | Percentage of combined voting power represents voting power with respect to all shares of Class A Common Stock and Class B Common Stock, voting together as a single class. Each holder of Class A Common Stock and Class B Common Stock is entitled to one vote per share. |
(2) | GTCR Fund XI/B LP (“GTCR Fund XI/B”), GTCR Fund XI/C LP (“GTCR Fund XI/C”) and certain other entities affiliated with GTCR LLC (“GTCR”) have the right to appoint a majority of the members of the Board of Managers of Hoya Topco, LLC. GTCR Partners XI/B LP (“GTCR Partners XI/B”) is the general partner of GTCR Fund XI/B. GTCR Partners XI/A&C LP (“GTCR Partners XI/A&C”) is the general partner of GTCR Fund XI/C LP. GTCR Investment XI LLC (“GTCR Investment XI”) is the general partner of each of GTCR Partners XI/B and GTCR Partners XI/A&C. GTCR Investment XI is managed by a Board of Managers which includes Mark M. Anderson and David A. Donnini, and no single person has voting or dispositive authority over the securities reported herein. As such, each of the foregoing entities and individuals may be deemed to share beneficial ownership of the securities reported herein. Each of them disclaims any such beneficial ownership. The address for each of the entities and individuals is 300 North LaSalle Street, Suite 5600, Chicago, Illinois, 60654. This amount includes shares of Class B common stock issuable in connection with 6,000,000 Vivid Seats Class B Warrants. The following table sets forth our directors’ and named executive officers’ direct and indirect beneficial ownership interests in Hoya Topco, LLC excluding, in the case of directors, any shares indirectly owned by such individuals as a result of his or her partnership interest in GTCR or its affiliates. |
Name of Beneficial Owner |
Class B Units |
Class B-l Incentive Units |
Class C Units (a) |
Percentage of Class C Units Beneficially Owned |
Class D Units |
Class E Units |
||||||||||||||||||
Stanley Chia (b) |
— | 450,000 | — | — | — | 500,765 | ||||||||||||||||||
Lawrence Fey (c) |
— | 110,000 | — | — | 440,000 | — | ||||||||||||||||||
Jon Wagner (d) |
— | 77,000 | — | — | 330,000 | — |
(a) | The Class C Units are the voting securities of Hoya Topco, LLC. |
(b) | Includes vested and unvested interests. Excludes 450,000 phantom units of Hoya Topco. The Class E Units are profit interests of Hoya Topco. |
(c) | Includes vested and unvested interests. Excludes 110,000 phantom units of Hoya Topco. The Class D Units are profit interests of Hoya Topco. |
(d) | Includes vested and unvested interests. Excludes 77,000 phantom units of Hoya Topco. The Class D Units are profit interests of Hoya Topco. |
(3) | The following table sets forth our named executive officers’, directors’, and executive officers and directors as a group’s shares of common stock subject to options that are exercisable within 60 days of April 12, 2022. |
Name of Beneficial Owner |
Number of Shares subject to Options |
|||
Executive Officers |
||||
Stanley Chia |
151,811 | |||
Lawrence Fey |
121,449 | |||
Jon Wagner |
60,724 | |||
Non-Employee Directors |
||||
Mark Anderson |
— | |||
Todd Boehly |
— | |||
Jane DeFlorio |
— | |||
Craig Dixon |
— | |||
David Donnini |
— | |||
Tom Ehrhart |
— | |||
Julie Masino |
— | |||
Martin Taylor |
— | |||
All executive officers and directors as a group (13 individuals) |
386,014 |
(4) | The number of shares of Class A common stock held by The Vanguard Group (“Vanguard”) is based on a Schedule 13G filed with the SEC on February 10, 2022 by Vanguard. Vanguard reported that it has sole voting power with respect to 0 shares, shared voting power with respect to 3,710 shares, sole dispositive power with respect to 4,097,467 shares and shared dispositive power with respect to 11,178 shares. The address of Vanguard is 100 Vanguard Blvd. Malvern, PA 19355. |
(5) | Interests shown consist of shares of Class A common stock held by Eldridge Industries, LLC (“Eldridge”), Horizon Sponsor, LLC (“Horizon”) and Post Portfolio Trust, LLC (“PPT”). Interests shown include (i) 52,057,173 shares of Class A common stock and (ii) 45,686,457 shares of Class A common stock subject to warrants that are exercisable within 60 days of February 28, 2022. Eldridge is a private investment firm specializing in providing both equity and debt capital. Todd L. Boehly is the Chairman, Chief Executive Officer and indirect controlling member of Eldridge and in such capacity may be deemed to have voting and dispositive power with respect to the shares held by Horizon and PPT. DraftKings has appointed Mr. Boehly as its true and lawful proxy and attorney-in-fact, |
(6) | Based on a Schedule 13G filed with the SEC on March 4, 2022 on behalf of Vivid Public Holdings, LLC (“VPH”), DLHPII Public Investments, LLC (“Public Investment”), DLHPII Investment Holdings, LLC (“Investment Holdings”), Delaware Life Holdings Parent II, LLC (“Parent”), Delaware Life Holdings Manager, LLC (“Manager”) and Mark R. Walter (“Mr. Walter”) (together, VPH, Public Investment, Investment Holdings, Parent, Manager, and Mr. Walter are the “Reporting Persons”). Consists of 5,000,000 shares of Class A Common Stock (the “Class A Shares”) held directly by VPH. VPH is a wholly-owned subsidiary of Public Investments. Public Investments is a wholly-owned subsidiary of Investment Holdings. Investment Holdings is a wholly-owned subsidiary of Parent. Each of VPH, Public Investments, Investment Holdings and Parent is managed by Manager and each of Parent and Manager is controlled by Mr. Walter. Each of the Reporting Persons have shared voting and dispositive power over the securities reported. Each of Public Investments, Investment Holdings, Parent, Manager and Mr. Walter disclaim beneficial ownership of such securities except to the extent of their respective pecuniary interest therein. The principal business address of each of VPH, Public Investments, Investment Holdings, Parent, Manager and Mr. Walter is 227 West Monroe, Suite 5000 Chicago, IL 60606. |
Page |
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F-2 |
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F-3 |
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F-4 |
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F-5 |
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F-6 |
||||
F-8 |
||||
F-9 |
F-44 |
||||
F-45 |
||||
F-46 |
||||
F-47 |
||||
F-48 |
||||
F-49 |
December 31, 2021 |
December 31, 2020 |
|||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ |
$ |
||||||
Restricted cash |
||||||||
Accounts receivable – net |
||||||||
Inventory – net |
||||||||
Prepaid expenses and other current assets |
||||||||
|
|
|
|
|||||
Total current assets |
||||||||
Property and equipment – net |
||||||||
Intangible assets – net |
||||||||
Goodwill |
||||||||
Other non-current assets |
||||||||
|
|
|
|
|||||
Total assets |
$ |
$ |
||||||
|
|
|
|
|||||
Liabilities and equity (deficit) |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ |
$ |
||||||
Accrued expenses and other current liabilities |
||||||||
Deferred revenue |
||||||||
Current maturities of long-term debt |
||||||||
|
|
|
|
|||||
Total current liabilities |
||||||||
Long-term debt – net |
||||||||
Other liabilities |
||||||||
|
|
|
|
|||||
Total long-term liabilities |
||||||||
Commitments and contingencies (Note 15) |
||||||||
Redeemable Preferred Units and noncontrolling interests |
||||||||
Redeemable Senior Preferred Units —$ units authorized, issued, and outstanding at December 31, 2021 and 2020, respectively (aggregate involuntary liquidation preference of $ and $ at December 31, 2021 and 2020, respectively) |
||||||||
Redeemable Preferred Units —$ units authorized, issued, and outstanding at December 31, 2021 and 2020, respectively |
||||||||
Redeemable noncontrolling interests |
||||||||
Shareholders’ deficit |
||||||||
Class A common stock, $ par value; shares authorized, shares authorized, issued, and outstanding at December 31, 2020 |
||||||||
Class B common stock, $ par value; shares authorized, shares authorized, issued, and outstanding at December 31, 2020 |
||||||||
Additional paid-in capital |
||||||||
Accumulated deficit |
( |
) |
( |
) | ||||
Accumulated other comprehensive loss |
( |
) | ||||||
|
|
|
|
|||||
Total Shareholders’ deficit |
( |
) |
( |
) | ||||
|
|
|
|
|||||
Total liabilities, Redeemable Preferred Units and noncontrolling interests, and Shareholders’ deficit |
$ |
$ |
||||||
|
|
|
|
Years Ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Revenues |
$ | $ | $ | |||||||||
Costs and expenses: |
||||||||||||
Cost of revenues (exclusive of depreciation and amortization shown separately below) |
||||||||||||
Marketing and selling |
||||||||||||
General and administrative |
||||||||||||
Depreciation and amortization |
||||||||||||
Impairment charges |
— | — | ||||||||||
Income (loss) from operations |
( |
) |
( |
) | ||||||||
Other expenses: |
||||||||||||
Interest expense – net |
||||||||||||
Loss on extinguishment of debt |
||||||||||||
Other expenses |
— | — | ||||||||||
Loss before income taxes |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | |||
Income tax expense |
— | — | ||||||||||
Net loss |
( |
) |
( |
) |
( |
) | ||||||
Net loss attributable to Hoya Intermediate, LLC shareholders prior to reverse recapitalization |
( |
) | ( |
) | ( |
) | ||||||
Net loss attributable to redeemable noncontrolling interests |
( |
) | — | — | ||||||||
Net loss attributable to Class A Common Stockholders |
$ |
( |
) |
$ |
— |
$ |
— |
|||||
Loss per Class A Common Stock(1) : |
||||||||||||
Basic |
$ | ( |
) | |||||||||
Diluted |
$ | ( |
) | |||||||||
Weighted average Class A Common Stock outstanding(1) : |
||||||||||||
Basic |
||||||||||||
Diluted |
(1) | Represents loss per common share and weighted-average common shares outstanding for the period following the Merger Transaction and PIPE Financing as defined in Note 1, Background, Description of Business and Basis of Presentation |
Years Ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Other comprehensive income (loss): |
||||||||||||
Unrealized gain (loss) on derivative instruments |
( |
) | ||||||||||
Comprehensive loss, net of taxes |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | |||
Comprehensive loss attributable to Hoya Intermediate, LLC shareholders prior to reverse recapitalization |
( |
) | ( |
) | ( |
) | ||||||
Comprehensive loss attributable to redeemable noncontrolling interests |
( |
) | — | — | ||||||||
Comprehensive loss attributable to Class A Common Stockholders |
$ |
( |
) |
$ |
— |
$ |
— |
|||||
Redeemable senior preferred units |
Redeemable preferred units |
Redeemable noncontrolling interests |
Common units |
Class A Common Shares |
Class B Common Shares |
Additional paid-in capital |
Accumulated deficit |
Accumulated other comprehensive (income) loss |
Total shareholders’ deficit |
|||||||||||||||||||||||||||||||||||||||||||||||||||
Units |
Amount |
Units |
Amount |
Units |
Amount |
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||||||||||||||||||||
Balances at January 1, 2019 |
$ |
$ |
$ |
— |
$ |
— |
— |
$ |
— |
— |
$ |
— |
$ |
$ |
( |
) |
$ |
$ |
||||||||||||||||||||||||||||||||||||||||||
Net loss |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
— |
( |
) | |||||||||||||||||||||||||||||||||||||||||||
Unrealized loss on derivative instruments |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
( |
) | |||||||||||||||||||||||||||||||||||||||||||
Deemed contribution from former parent |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||||||||||||||||
Accretion of senior preferred |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
— |
— |
( |
) | ||||||||||||||||||||||||||||||||||||||||||||
Distributions to former parent |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
— |
— |
( |
) | |||||||||||||||||||||||||||||||||||||||||||
Balances at December 31, 2019 |
$ |
$ |
$ |
— |
$ |
— |
— |
$ |
— |
— |
$ |
— |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
||||||||||||||||||||||||||||||||||||||||
Net loss |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
— |
( |
) | |||||||||||||||||||||||||||||||||||||||||||
Unrealized gain on derivative instruments |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||||||||||||||||
Loss reclassified from accumulated other comprehensive loss to earnings |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||||||||||||||||
Deemed contribution from former parent |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||||||||||||||||
Accretion of senior preferred |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
— |
— |
( |
) | ||||||||||||||||||||||||||||||||||||||||||||
Distributions to former parent |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
— |
— |
( |
) | |||||||||||||||||||||||||||||||||||||||||||
Balances at December 31, 2020 |
$ |
$ |
$ |
— |
$ |
— |
— |
$ |
— |
— |
$ |
— |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | ||||||||||||||||||||||||||||||||||||||
Net loss prior to reverse recapitalization |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
— |
( |
) | |||||||||||||||||||||||||||||||||||||||||||
Loss reclassified from accumulated other comprehensive loss to earnings to reverse recapitalization |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||||||||||||||||
Deemed contribution from former parent prior to reverse recapitalization |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
Redeemable senior preferred units |
Redeemable preferred units |
Redeemable noncontrolling interests |
Common units |
Class A Common Shares |
Class B Common Shares |
Additional paid-in capital |
Accumulated deficit |
Accumulated other comprehensive (income) loss |
Total shareholders’ deficit |
|||||||||||||||||||||||||||||||||||||||||||||||||||
Units |
Amount |
Units |
Amount |
Units |
Amount |
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||||||||||||||||||||
Accretion of senior preferred units prior to reverse recapitalization |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
— |
— |
( |
) | ||||||||||||||||||||||||||||||||||||||||||||
Reverse recapitalization, net |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
— |
— |
||||||||||||||||||||||||||||||||||||||||||||||||
Net loss after reverse recapitalization |
— |
— |
— |
— |
( |
) |
— |
— |
— |
— |
— |
— |
— |
( |
) |
— |
( |
) | ||||||||||||||||||||||||||||||||||||||||||
Deemed contribution from former parent after reverse recapitalization |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation after reverse recapitalization |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||||||||||||||||
Change in fair value of warrants |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares related to Betcha acquisition |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||||||||||||||||||
Dividends paid to Class A Common Shareholders |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
— |
— |
( |
) | |||||||||||||||||||||||||||||||||||||||||||
Subsequent remeasurement of Redeemable noncontrolling interests |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
— |
— |
( |
) | ||||||||||||||||||||||||||||||||||||||||||||
Balances at December 31, 2021 |
— |
$ |
— |
— |
$ |
— |
$ |
— |
$ |
— |
$ |
$ |
$ |
$ |
( |
) |
$ |
— |
$ |
( |
) | |||||||||||||||||||||||||||||||||||||||
Years Ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Cash flows from operating activities |
||||||||||||
Net loss |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | |||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
||||||||||||
Depreciation and amortization |
||||||||||||
Amortization of deferred financing costs and interest rate cap |
||||||||||||
Loss on disposal of long-lived assets |
— |
|||||||||||
Equity-based compensation expense |
||||||||||||
Loss on extinguishment of debt |
||||||||||||
Interest expense paid-in-kind |
— |
|||||||||||
Change in fair value of warrants |
— |
— |
||||||||||
Impairment charges |
— |
— |
||||||||||
Changes in operating assets and liabilities, net of impact of acquisitions: |
||||||||||||
Accounts receivable |
( |
) |
( |
) |
||||||||
Inventory |
( |
) |
( |
) | ||||||||
Prepaid expenses and other current assets |
( |
) |
||||||||||
Accounts payable |
( |
) |
||||||||||
Accrued expenses and other current liabilities |
||||||||||||
Deferred revenue |
||||||||||||
Other assets and liabilities |
( |
) |
( |
) | ||||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used in) operating activities |
( |
) |
||||||||||
Cash flows from investing activities |
||||||||||||
Cash acquired (paid) in acquisition |
— |
( |
) | |||||||||
Purchases of property and equipment |
( |
) |
( |
) |
( |
) | ||||||
Proceeds from the sale of personal seat licenses |
— |
— |
||||||||||
Purchases of personal seat licenses |
( |
) |
— |
— |
||||||||
Investments in developed technology |
( |
) |
( |
) |
( |
) | ||||||
|
|
|
|
|
|
|||||||
Net cash used in investing activities |
( |
) |
( |
) |
( |
) | ||||||
Cash flows from financing activities |
||||||||||||
Proceeds from PIPE Financing |
— |
— |
||||||||||
Proceeds from the Merger Transaction |
— |
— |
||||||||||
Redemption of Redeemable Senior Preferred Units |
( |
) |
— |
— |
||||||||
Payments of May 2020 First Lien Loan |
( |
) |
— |
— |
||||||||
Payments of June 2017 First Lien Loan |
( |
) |
( |
) |
( |
) | ||||||
Payments of June 2017 Second Lien Loan |
— |
— |
( |
) | ||||||||
Prepayment penalty on extinguishment of debt |
( |
) |
— |
— |
||||||||
Proceeds from May 2020 First Lien Loan |
— |
— |
||||||||||
Proceeds from Revolving Facility |
— |
— |
||||||||||
Payments of Revolving Facility |
— |
( |
) |
— |
||||||||
Payments of deferred financing costs and other debt-related costs |
— |
( |
) |
( |
) | |||||||
Distributions |
— |
( |
) |
( |
) | |||||||
Payment of reverse recapitalization costs |
( |
) |
— |
— |
||||||||
Dividends paid to Class A Common Stock Shareholders |
( |
) |
— |
— |
||||||||
|
|
|
|
|
|
|||||||
Net cash (used in) provided by financing activities |
( |
) |
( |
) | ||||||||
|
|
|
|
|
|
|||||||
Net increase (decrease) in cash, cash equivalents, and restricted cash |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Cash and cash equivalents – beginning of period |
||||||||||||
|
|
|
|
|
|
|||||||
Cash, cash equivalents, and restricted cash – end of period |
$ |
$ |
$ |
|||||||||
|
|
|
|
|
|
|||||||
Supplemental disclosure of cash flow information: |
||||||||||||
Paid-in-kind |
$ |
$ |
$ |
— |
||||||||
Cash paid for interest |
$ |
$ |
$ |
|||||||||
Betcha acquisition non-cash consideration |
$ |
$ |
— |
$ |
— |
|||||||
|
|
|
|
|
|
• | Issued We su bs e quentlypaid an additional $ in transaction costs incurred by Horizon using the cash sh eq ui valents tha t became availab le to Vivid Seats Inc.; |
• | Issued |
• | Received $ |
• | Used proceeds from Horizon and the PIPE Financing to pay (i) $ |
• | Issued to Horizon Sponsor, LLC (i) warrants to purchase |
common stock at an exercise of $ |
• | Issued private warrants to purchase |
Asset Class |
Useful Life |
|||
Computer Equipment |
|
| ||
Purchased Software |
|
| ||
Furniture and Fixtures |
|
|
Asset Class |
Useful Life |
|||
Non-competition agreements |
|
| ||
Supplier relationships |
|
| ||
Developed technology |
|
| ||
Customer relationships |
|
|
Cash |
$ | |||
Restricted cash |
||||
Prepaid expenses and other current assets |
||||
Intangible assets |
||||
Goodwill |
||||
Accounts payable |
( |
) | ||
Accrued expenses and other current liabilities |
( |
) | ||
Net assets acquired |
$ |
|||
Fair value of common stock |
$ | |||
Cash consideration |
||||
Fair value of milestone payments |
||||
Fair value of earnouts |
||||
Total purchase consideration |
$ |
|||
Cost |
Estimated Useful Life |
|||||||
Customer relationships |
||||||||
Developed technology |
||||||||
Total acquired intangible assets |
$ |
|||||||
2021 |
2020 |
2019 |
||||||||||
Marketplace revenues: |
||||||||||||
Owned Properties |
$ | $ | $ | |||||||||
Private Label |
( |
) | ||||||||||
Total Marketplace revenues |
$ |
$ |
$ |
|||||||||
2021 |
2020 |
2019 |
||||||||||
Marketplace revenues: |
||||||||||||
Concerts |
$ | $ | $ | |||||||||
Sports |
||||||||||||
Theater |
||||||||||||
Other |
||||||||||||
Total Marketplace revenues |
$ |
$ |
$ |
|||||||||
Goodwill |
$ | |||
Indefinite-lived trademark |
||||
Definite-lived intangible assets |
||||
Property and equipment |
||||
Personal seat licenses |
||||
Total impairment charges |
$ |
|||
2021 |
||||
Computer equipment |
$ | |||
Construction in progress |
||||
Total property and equipment |
||||
Less: accumulated depreciation |
||||
Total property and equipment – net |
$ |
|||
Definite-lived Intangible Assets |
Trademark |
Goodwill |
||||||||||
Balance at January 1, 2020 |
$ |
$ |
$ |
|||||||||
Capitalized development costs |
— | — | ||||||||||
Impairment |
( |
) | ( |
) | ( |
) | ||||||
Disposals |
( |
) | — | — | ||||||||
Amortization |
( |
) | — | — | ||||||||
Balance at December 31, 2020 |
||||||||||||
Acquisition of Betcha |
— | |||||||||||
Capitalized development costs |
— | — | ||||||||||
Amortization |
( |
) | — | — | ||||||||
Balance at December 31, 2021 |
$ |
$ |
$ |
|||||||||
2022 |
$ | |||
2023 |
$ | |||
2024 |
$ | |||
2025 |
$ | |||
2026 |
$ | |||
Total |
$ |
2021 |
2020 |
|||||||
Recovery of future customer compensation |
$ |
$ |
||||||
Insurance recovery asset |
||||||||
Prepaid expenses |
||||||||
Other current assets |
||||||||
Total prepaid expenses and other current assets |
$ |
$ |
||||||
2021 |
2020 |
|||||||
Accrued marketing expense |
$ |
$ |
||||||
Accrued taxes |
||||||||
Accrued customer credits |
||||||||
Accrued future customer compensation |
||||||||
Accrued contingencies |
||||||||
Other current liabilities |
||||||||
Total accrued expenses and other current liabilities |
$ |
$ |
||||||
2021 |
2020 |
|||||||
June 2017 First Lien Loan |
$ |
$ |
||||||
May 2020 First Lien Loan |
||||||||
Total long-term debt, gross |
||||||||
Less: unamortized debt issuance costs |
( |
) | ( |
) | ||||
Total long-term debt, net of issuance costs |
||||||||
Less: current portion |
( |
) | ||||||
Total long-term debt, net |
$ |
$ |
||||||
2022 |
$ | |||
2023 |
||||
2024 |
||||
2025 |
||||
2026 |
||||
|
|
|||
Total |
$ |
|||
|
|
Interest rate cap |
||||
Beginning accumulated derivative loss in AOCL |
$ | ( |
) | |
Amount of gain (loss) recognized in AOCL |
— | |||
Less: Amount of loss reclassified from AOCL to income |
( |
) | ||
|
|
|||
Ending accumulated derivative loss in AOCL |
$ |
|||
|
|
Interest rate swaps |
Interest rate cap |
Total |
||||||||||
Beginning accumulated derivative loss in AOCL |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Amount of gain recognized in AOCL |
— | |||||||||||
Less: Amount of loss reclassified from AOCL to income |
— | ( |
) | ( |
) | |||||||
|
|
|
|
|
|
|||||||
Ending accumulated derivative loss in AOCL |
$ |
$ |
( |
) | $ |
( |
) | |||||
|
|
|
|
|
|
2021 |
2020 |
2019 |
||||||||||
United States |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Foreign |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Total loss before income taxes |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | |||
|
|
|
|
|
|
2021 |
||||
Current |
||||
U.S. Federal |
$ | |||
State & Local |
||||
Foreign |
||||
Total current income tax expense (benefit) |
||||
Deferred |
||||
U.S. Federal |
||||
State & Local |
||||
Foreign |
||||
Total deferred income tax expense (benefit) |
||||
Total income tax expense (benefit) |
$ |
|||
2021 |
||||
At U.S. statutory tax rate |
% | |||
State income taxes |
( |
)% | ||
Foreign rate differential |
% | |||
Pass-through loss / (income) |
( |
)% | ||
Noncontrolling interest |
( |
)% | ||
Change in valuation allowance |
( |
)% | ||
Warrants remeasurement |
( |
)% | ||
Other |
% | |||
Total income tax expense (benefit) |
( |
)% | ||
2021 |
||||
Deferred Tax Assets |
||||
Net operating loss |
$ | |||
Interest carryforward |
||||
Investment in partnerships |
||||
Other |
||||
Total deferred tax assets |
||||
Valuation allowance |
( |
) | ||
Total deferred tax assets net of valuation allowance |
||||
Deferred Tax Liabilities |
||||
Other |
||||
Total Deferred Tax Liabilities |
||||
Net Deferred Tax Asset / Liabilities |
$ |
|||
2021 |
||||
Balance of beginning of period |
$ | |||
Charged to costs and expenses |
||||
(Credited) charged to other accounts |
||||
Deductions |
||||
Ending balance |
$ |
|||
Significant Unobservable Inputs |
Range (Weighted Average) |
|||
Discount rate |
|
| ||
Long-term growth rate |
|
|
Goodwill |
Trademark |
|||||||
50 basis point increase in discount rate |
$ | ( |
) | $ | ( |
) | ||
50 basis point decrease in long-term growth rate |
( |
) | ( |
) |
2022 |
2023 |
2024 |
2025 |
2026 |
Thereafter |
Total |
||||||||||||||||||||||
Operating leases |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Purchase obligations |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketplace |
Resale |
Consolidated |
||||||||||
Revenues |
$ | $ | $ | |||||||||
Cost of revenues (exclusive of depreciation and amortization shown separately below) |
||||||||||||
Marketing and selling |
||||||||||||
|
|
|
|
|
|
|||||||
Contribution margin |
$ |
$ |
||||||||||
General and administrative |
||||||||||||
Depreciation and amortization |
||||||||||||
|
|
|||||||||||
Income from operations |
||||||||||||
Interest expense – net |
||||||||||||
Loss on extinguishment of debt |
||||||||||||
Other expenses |
||||||||||||
|
|
|||||||||||
Loss before income taxes |
$ |
( |
) | |||||||||
|
|
Marketplace |
Resale |
Consolidated |
||||||||||
Revenues |
$ | $ | $ | |||||||||
Cost of revenues (exclusive of depreciation and amortization shown separately below) |
||||||||||||
Marketing and selling |
||||||||||||
|
|
|
|
|
|
|||||||
Contribution margin |
$ |
( |
) |
$ |
( |
) | ||||||
General and administrative |
||||||||||||
Depreciation and amortization |
||||||||||||
Impairment charges |
||||||||||||
|
|
|||||||||||
Loss from operations |
( |
) | ||||||||||
Interest expense – net |
||||||||||||
Loss on extinguishment of debt |
||||||||||||
|
|
|||||||||||
Net loss |
$ |
( |
) | |||||||||
|
|
Marketplace |
Resale |
Consolidated |
||||||||||
Revenues |
$ | $ | $ | |||||||||
Cost of revenues (exclusive of depreciation and amortization shown separately below) |
||||||||||||
Marketing and selling |
||||||||||||
|
|
|
|
|
|
|||||||
Contribution margin |
$ |
$ |
||||||||||
General and administrative |
||||||||||||
Depreciation and amortization |
||||||||||||
|
|
|||||||||||
Loss from operations |
( |
) | ||||||||||
Interest expense—net |
||||||||||||
Loss on extinguishment of debt |
||||||||||||
|
|
|||||||||||
Net loss |
$ |
( |
) | |||||||||
|
|
12/31/2021 |
10/18/2021 |
|||||||
Estimated volatility |
% |
% | ||||||
Expected term (years) |
||||||||
Risk-free rate |
% |
% | ||||||
Expected dividend yield |
% |
% |
Shares |
Weighted-Average Grant Date Fair Value Per Share |
|||||||
Unvested at December 31, 2020 |
$ | |||||||
Granted |
||||||||
Forfeited |
( |
) | ||||||
Vested |
||||||||
|
|
|
|
|||||
Unvested at December 31, 2021 |
$ |
|||||||
|
|
|
|
2021 |
||||
Estimated volatility |
% | |||
Expected term (years) |
||||
Risk-free rate |
% | |||
Expected dividend yield |
% |
Class B-1 Units |
Class D Units |
Class E Units |
||||||||||||||||||||||
Number of Incentive Units |
Weighted Average Grant Date Fair Value |
Number of Incentive Units |
Weighted Average Grant Date Fair Value |
Number of Incentive Units |
Weighted Average Grant Date Fair Value |
|||||||||||||||||||
Balances at January 1, 2019 |
— |
$ |
— |
$ |
$ |
|||||||||||||||||||
Units Granted |
— | — | — | — | ||||||||||||||||||||
Units Repurchased |
— | — | ( |
) | — | — | ||||||||||||||||||
Units Forfeited |
— | — | ( |
) | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balances at December 31, 2019 |
— |
— |
$ |
$ |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Units granted |
— | — | ||||||||||||||||||||||
Units repurchased |
— | — | ( |
) | — | — | ||||||||||||||||||
Units forfeited |
( |
) | ( |
) | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balances at December 31, 2020 |
$ |
$ |
$ |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Units granted |
— | — | — | — | — | — | ||||||||||||||||||
Units repurchased |
— | — | — | — | — | — | ||||||||||||||||||
Units forfeited |
( |
) | ( |
) | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balances at December 31, 2021 |
$ |
$ |
$ |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
2020 |
2019 |
|||||||
Estimated volatility |
% - |
% | % - |
% | ||||
Expected term (years) |
- |
- |
||||||
Risk-free rate |
% - |
% | % - |
% | ||||
Expected dividend yield |
% | % |
October 18, 2021 through December 31, 2021 |
||||
Numerator—basic: |
||||
Net loss |
$ | ( |
) | |
Less: Loss attributable to redeemable noncontrolling interests |
||||
Net loss attributable to Class A Common Stockholders—basic |
( |
) | ||
Denominator—basic: |
||||
Weighted average Class A common stock outstanding—basic |
||||
Net loss per Class A common stock—basic |
$ |
( |
) | |
Numerator—diluted: |
||||
Net loss attributable to Class A Common Stockholders—basic |
$ | ( |
) | |
Net loss effect of dilutive securities: |
||||
Effect of dilutive Hoya Intermediate Warrants |
( |
) | ||
Net loss attributable to Class A Common Stockholders—diluted |
( |
) | ||
Denominator—diluted: |
||||
Weighted average Class A common stock outstanding—basic |
||||
Weighted average effect of dilutive securities: |
||||
Effect of dilutive Hoya Intermediate Warrants |
||||
Weighted average Class A common stock outstanding—diluted |
||||
Net loss per Class A common stock—diluted |
$ |
( |
) | |
For the Year Ended December 31, |
||||
2021 |
||||
RSUs |
||||
Stock options |
||||
Class A Warrants |
||||
Exercise Warrants |
||||
Hoya Intermediate Warrants |
||||
Shares of Class B common stock |
March 31, 2022 |
December 31, 2022 |
|||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Restricted cash |
||||||||
Accounts receivable – net |
||||||||
Inventory – net |
||||||||
Prepaid expenses and other current assets |
||||||||
Total current assets |
||||||||
Property and equipment – net |
||||||||
Right-of-use |
||||||||
Intangible assets – net |
||||||||
Goodwill |
||||||||
Other non-current assets |
||||||||
Total assets |
$ |
$ |
||||||
Liabilities and shareholders’ deficit |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | $ | ||||||
Accrued expenses and other current liabilities |
||||||||
Deferred revenue |
||||||||
Current maturities of long-term debt – net |
||||||||
Total current liabilities |
||||||||
Long-term debt – net |
||||||||
Long-term lease liabilities |
||||||||
Other liabilities |
||||||||
Total long-term liabilities |
||||||||
Commitments and contingencies (Note 11) |
||||||||
Redeemable noncontrolling interests |
||||||||
Shareholders’ deficit |
||||||||
Class A common stock, $ |
||||||||
Class B common stock, $ |
||||||||
Additional paid-in capital |
||||||||
Accumulated deficit |
( |
) | ( |
) | ||||
Total Shareholders’ deficit |
( |
) | ( |
) | ||||
Total liabilities, Redeemable noncontrolling interests, and Shareholders’ deficit |
$ |
$ |
||||||
Three Months Ended March 31, |
||||||||
2022 |
2021 |
|||||||
Revenues |
$ | $ | ||||||
Costs and expenses: |
||||||||
Cost of revenues (exclusive of depreciation and amortization shown separately below) |
||||||||
Marketing and selling |
||||||||
General and administrative |
||||||||
Depreciation and amortization |
||||||||
Income (loss) from operations |
( |
) | ||||||
Other expenses: |
||||||||
Interest expense – net |
||||||||
Loss on extinguishment of debt |
— | |||||||
Other expenses |
— | |||||||
Income (loss) before income taxes |
( |
) | ||||||
Income tax expense |
— | |||||||
Net income (loss) |
( |
) | ||||||
Net loss attributable to Hoya Intermediate, LLC shareholders prior to reverse recapitalization |
— | ( |
) | |||||
Net income (loss) attributable to redeemable noncontrolling interests |
— | |||||||
Net income (loss) attributable to Class A Common Stockholders |
$ |
$ |
— |
|||||
Income per Class A Common Stock (1) : |
||||||||
Basic |
$ | |||||||
Diluted |
$ | |||||||
Weighted average Class A Common Stock outstanding (1) : |
||||||||
Basic |
||||||||
Diluted |
(1) | There were |
Three Months Ended March 31, |
||||||||
2022 |
2021 |
|||||||
Net income (loss) |
$ |
$ |
( |
) | ||||
Other comprehensive income (loss): |
||||||||
Unrealized gain on derivative instruments |
||||||||
Comprehensive income (loss), net of taxes |
$ | $ | ( |
) | ||||
Comprehensive loss attributable to Hoya Intermediate, LLC shareholders prior to reverse recapitalization |
( |
) | ||||||
Comprehensive income (loss) attributable to redeemable noncontrolling interests |
||||||||
Comprehensive income (loss) attributable to Class A Common Stockholders |
$ |
$ |
||||||
Redeemable Senior preferred units |
Redeemable Preferred units |
Common units |
||||||||||||||||||||||||||||||||||||||
Units |
Amount |
Units |
Amount |
Units |
Amount |
Additional paid-in capital |
Accumulated deficit |
Accumulated other comprehensive income (loss) |
Total members’ deficit |
|||||||||||||||||||||||||||||||
Balances at January 1, 2021 |
$ | $ | $ | — | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||||||
Unrealized gain on derivative instruments |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Deemed contribution from former parent |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Accretion of senior preferred units |
— | — | — | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||||||||||||
Balances at March 31, 2021 |
$ |
$ |
$ |
— |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | ||||||||||||||||||||||||||
Class A Common Shares |
Class B Common Shares |
|||||||||||||||||||||||||||||||
Redeemable noncontrolling interests |
Shares |
Amount |
Shares |
Amount |
Additional paid-in capital |
Accumulated deficit |
Total shareholders’ deficit |
|||||||||||||||||||||||||
Balances at January 1, 2022 |
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||||||||||||
Net income |
— | — | — | — | — | |||||||||||||||||||||||||||
Issuance of shares |
— | — | — | — | — | — | — | |||||||||||||||||||||||||
Deemed contribution from former parent |
— | — | — | — | — | |||||||||||||||||||||||||||
Equity-based compensation |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Subsequent remeasurement of Redeemable noncontrolling interests |
— | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||||||
Balances at March 31, 2022 |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | ||||||||||||||||||||||
Three Months Ended March 31, |
||||||||
2022 |
2021 |
|||||||
Cash flows from operating activities |
||||||||
Net income (loss) |
$ | $ | ( |
) | ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
||||||||
Depreciation and amortization |
||||||||
Amortization of deferred financing costs and interest rate cap |
||||||||
Equity-based compensation expense |
||||||||
Loss on extinguishment of debt |
||||||||
Change in fair value of warrants |
||||||||
Interest expense paid-in-kind |
||||||||
Amortization of leases |
||||||||
Change in assets and liabilities: |
||||||||
Accounts receivable |
( |
) | ( |
) | ||||
Inventory |
( |
) | ( |
) | ||||
Prepaid expenses and other current assets |
( |
) | ( |
) | ||||
Accounts payable |
||||||||
Accrued expenses and other current liabilities |
( |
) | ||||||
Deferred revenue |
||||||||
Other assets and liabilities |
( |
) | ||||||
Net cash provided by operating activities |
||||||||
Cash flows from investing activities |
||||||||
Purchases of property and equipment |
( |
) | ||||||
Investments in developed technology |
( |
) | ( |
) | ||||
Net cash used in investing activities |
( |
) |
( |
) | ||||
Cash flows from financing activities |
||||||||
Payments of June 2017 First Lien Loan |
( |
) | ( |
) | ||||
Proceeds from February 2022 First Lien Loan |
||||||||
Payments of deferred financing costs and other debt-related costs |
( |
) | ||||||
Net cash used in financing activities |
( |
) |
( |
) | ||||
Net increase (decrease) in cash, cash equivalents, and restricted cash |
( |
) |
||||||
Cash, cash equivalents, and restricted cash – beginning of period |
||||||||
Cash, cash equivalents, and restricted cash – end of period |
$ |
$ |
||||||
Supplemental disclosure of cash flow information: |
||||||||
Paid-in-kind |
$ | $ | ||||||
Cash paid for interest |
$ | $ | ||||||
Right-of-use |
$ | $ | ||||||
Three Months Ended March 31, |
||||||||
2022 |
2021 |
|||||||
Marketplace revenues: |
||||||||
Owned Properties |
$ | $ | ||||||
Private Label |
||||||||
Total Marketplace revenues |
$ |
$ |
||||||
Three Months Ended March 31, |
||||||||
2022 |
2021 |
|||||||
Marketplace revenues: |
||||||||
Concerts |
$ | $ | ||||||
Sports |
||||||||
Theater |
||||||||
Other |
||||||||
Total Marketplace revenues |
$ |
$ |
||||||
Three Months Ended March 31, 2022 |
||||||||||||
Marketplace |
Resale |
Consolidated |
||||||||||
Revenues |
$ | $ | $ | |||||||||
Cost of revenues (exclusive of depreciation and amortization shown separately below) |
||||||||||||
Marketing and selling |
||||||||||||
Contribution margin |
$ |
$ |
$ |
|||||||||
General and administrative |
||||||||||||
Depreciation and amortization |
||||||||||||
Income from operations |
||||||||||||
Interest expense – net |
||||||||||||
Loss on extinguishment of debt |
||||||||||||
Other expenses |
||||||||||||
Income before income taxes |
$ |
|||||||||||
Three Months Ended March 31, 2021 |
||||||||||||
Marketplace |
Resale |
Consolidated |
||||||||||
Revenues |
$ | $ | $ | |||||||||
Cost of revenues (exclusive of depreciation and amortization shown separately below) |
||||||||||||
Marketing and selling |
||||||||||||
Contribution margin |
$ |
$ |
$ |
|||||||||
General and administrative |
||||||||||||
Depreciation and amortization |
||||||||||||
Loss from operations |
( |
) | ||||||||||
Interest expense – net |
||||||||||||
Loss before income taxes |
$ |
( |
) | |||||||||
Operating Leases |
||||
Remainder of 2022 |
$ | |||
2023 |
||||
2024 |
||||
2025 |
$ | |||
2026 |
||||
2027 |
||||
Thereafter |
||||
Total remaining lease payments |
||||
Less: Imputed interest |
||||
Less: expected tenant improvement allowance |
||||
Present value of lease liabilities |
$ |
|||
Operating Leases |
||||
2022 |
$ | |||
2023 |
||||
2024 |
||||
2025 |
$ | |||
2026 |
||||
Thereafter |
||||
Total remaining lease payments |
||||
Definite-lived Intangible Assets |
Trademark |
Goodwill |
||||||||||
Balance at January 1, 2022 |
$ | $ | $ | |||||||||
Capitalized development costs |
||||||||||||
Amortization |
( |
) | ||||||||||
Balance at March 31, 2022 |
$ |
$ |
$ |
|||||||||
Definite-lived Intangible Assets |
Trademark |
Goodwill |
||||||||||
Balance at January 1, 2021 |
$ | $ | $ | |||||||||
Capitalized development costs |
||||||||||||
Amortization |
( |
) | ||||||||||
Balance at March 31, 2021 |
$ |
$ |
$ |
|||||||||
March 31, 2022 |
December 31, 2021 |
|||||||
Recovery of future customer compensation |
$ | $ | ||||||
Insurance recovery asset |
||||||||
Prepaid expenses |
||||||||
Other current assets |
||||||||
Total prepaid expenses and other current assets |
$ |
$ |
||||||
March 31, 2022 |
December 31, 2021 |
|||||||
Accrued marketing expense |
$ | $ | ||||||
Accrued taxes |
||||||||
Accrued customer credits |
||||||||
Accrued future customer compensation |
||||||||
Accrued contingencies |
||||||||
Other current liabilities |
||||||||
Total accrued expenses and other current liabilities |
$ |
$ |
||||||
March 31, 2022 |
December 31, 2021 |
|||||||
June 2017 First Lien Loan |
$ | — | $ | |||||
February 2022 First Lien Loan |
— | |||||||
Total long-term debt, gross |
March 31, 2022 |
December 31, 2021 |
|||||||
Less: unamortized debt issuance costs |
( |
) | ( |
) | ||||
Total long-term debt, net of issuance costs |
||||||||
Less: current portion |
( |
) | — | |||||
Total long-term debt, net |
$ | $ | ||||||
March 31, 2022 |
December 31, 2021 |
|||||||
Estimated volatility |
% | % | ||||||
Expected term (years) |
||||||||
Risk-free rate |
% | % | ||||||
Expected dividend yield |
% | % |
Volatility |
% | |||
Expected term (years) |
||||
Interest rate |
% | |||
Dividend yield |
% |
Numerator—basic: |
||||
Net income |
$ | |||
Less: Income attributable to redeemable noncontrolling interests |
||||
Net income attributable to Class A Common Stockholders—basic |
||||
Denominator—basic: |
||||
Weighted average Class A common stock outstanding—basic |
||||
Net income per Class A common stock—basic |
$ |
|||
Numerator—diluted: |
||||
Net income attributable to Class A Common Stockholders—basic |
$ | |||
Net income effect of dilutive securities: |
||||
Noncontrolling interests |
||||
Effect of Exercise Warrants |
||||
Effect of RSUs |
— | |||
Net income attributable to Class A Common Stockholders—diluted |
||||
Denominator—diluted: |
||||
Weighted average Class A common stock outstanding—basic |
||||
Weighted average effect of dilutive securities: |
||||
Noncontrolling interests |
||||
Effect of Exercise Warrants |
||||
Effect of RSUs |
||||
Weighted average Class A common stock outstanding—diluted |
||||
Net income per Class A common stock—diluted |
$ |
|||
RSUs |
||||
Stock options |
||||
Class A Warrants |
||||
Exercise Warrants |
||||
Hoya Intermediate Warrants |
(a) | the new Section 6A thereto: |
1 |
This will be the last sale price of the Class A Common Stock on The Nasdaq Global Select Market on the last trading day of the Offer Period (as defined in the Registration Statement on Form S-4 filed with the SEC on May 26, 2022). |
2. | Miscellaneous Provisions . |
VIVID SEATS INC. | ||
By: | | |
Name: | ||
Title: | ||
CONTINENTAL STOCK TRANSFER & TRUST COMPANY | ||
By: | | |
Name: | ||
Title: |
** | Filed herewith. |
† | Certain of the exhibits and schedules to this exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request. |
(1) | To file, during any period during which offers or sales are being made, a post-effective amendment to this registration statement: |
(i) | to include any prospectus required by section 10(a)(3) of the Securities Act; |
(ii) | to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) (§ 230.424(b) of this chapter) if, in the aggregate, the changes in volume and price represent no more than 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. |
(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, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the |
date it is first used after effectiveness; provided, however |
(5) | That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
(i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
(ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
(iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
(iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
(6) | That prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. |
(7) | That every prospectus: (i) that is filed pursuant to paragraph (1) immediately preceding, or (ii) that purports to meet the requirements of Section 10(a)(3) of the Securities Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(8) | Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. |
(9) | To respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of such |
request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. |
(10) | To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. |
VIVID SEATS INC. | ||
By: | /s/ Stanley Chia | |
Name: | Stanley Chia | |
Title: | Chief Executive Officer |
Signature |
Title |
Date | ||
/s/ Stanley Chia |
Chief Executive Officer and Director | May 26, 2022 | ||
Stanley Chia | (principal executive officer) | | ||
/s/ Lawrence Fey |
Chief Financial Officer | May 26, 2022 | ||
Lawrence Fey | (principal financial officer) | | ||
/s/ Edward Pickus |
Chief Accounting Officer | May 26, 2022 | ||
Edward Pickus | (principal accounting officer) | | ||
/s/ Mark Anderson |
Director | May 26, 2022 | ||
Mark Anderson | |
| ||
/s/ Todd Boehly |
Director | May 26, 2022 | ||
Todd Boehly | |
| ||
/s/ Jane DeFlorio |
Director | May 26, 2022 | ||
Jane DeFlorio | |
| ||
/s/ Craig Dixon |
Director | May 26, 2022 | ||
Craig Dixon | |
|
Signature |
Title |
Date | ||
/s/ David Donnini |
Director | May 26, 2022 | ||
David Donnini | |
| ||
/s/ Tom Ehrhart |
Director | May 26, 2022 | ||
Tom Ehrhart | |
| ||
/s/ Julie Masino |
Director | May 26, 2022 | ||
Julie Masino | |
| ||
/s/ Martin Taylor |
Director | May 26, 2022 | ||
Martin Taylor | |
|